Supporting a circular economy is key to being a corporate citizen


circular economy

As we continue to feel the increasing impacts of climate change, a fundamental conversation about mitigation and resolution needs to be had. Currently, 45 percent of global greenhouse gas emissions come from the manufacture of cars, clothing, food and other everyday products – with waste and pollution playing a significant role in this worrying statistic.

If business continues as usual, we will emit 65 billion tons of greenhouse gases in 2030 and reach a temperature increase of 3 to 6⁰C by 2044. This would pose an even greater challenge to the living conditions of billions of people. To prevent this, we need to take more responsibility, reduce our environmental impact, pay attention to the carbon footprint and, most importantly, adopt a circular economy.

A circular economy is moving away from a degenerative linear model where we take, make, use and discard, and towards a regenerative approach where we rethink the way we design, produce the things we need and use.

In a circular model, consumption and production are cyclical but sustainable – seeking the optimal use of a material or product throughout its lifecycle before finally being disposed of in an environmentally sound manner. In a circular economy, the focus isn’t just on maximizing efficiency and reducing waste in the here and now – it’s forward-thinking, considering the impact on the livelihoods of our children and generations to come.

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Why is the circular economy good for businesses in the UAE?
While companies are certainly being held accountable, “going circular” also represents a business opportunity to unlock efficiencies by extracting more value from the materials and resources used to manufacture products and deliver services. It can help create new, efficient consumption patterns that reduce new purchases and encourage the reuse of existing materials.

While many of the economic benefits and opportunities are long-term, indirect and require significant investment, government action can help provide more immediate financial incentives. The transition to a circular economy is becoming increasingly cost-effective in the UAE as the Dubai government plans to significantly increase the cost of sending non-recyclable waste to landfill and using single-use plastics, in line with the emirate’s target of zero waste by 2030. prescribes.

This, alongside the UAE’s own Circular Economy Council and policies, allows for a transition away from a linear economy with a focus on four main sectors: manufacturing, food, infrastructure and transport. Policy is essential to level the playing field during this transition, not only by setting a long-term vision for circularity, but also by building capacity, infrastructure and support systems for research and development efforts.

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How can data enable us to introduce a new system?
Intelligent data-driven insights have always been key to enabling both business transformation and building a sustainable business model. Data-driven processes are more important than ever to make the circular economy a reality, primarily by extending the lifespan of the raw materials used in production.

Dispersed data alone would not provide decision makers with the necessary knowledge. It should be allowed to travel down the value chain and be shared within the organization – so traceability is key. It is also imperative that data and knowledge drive action, fueled by a culture of innovation, sustainability and a willingness to rethink business models.

Any company looking to integrate sustainability into its core business needs to ensure future data quality and availability by scaling dedicated circularity measurement tools and incorporating circularity metrics into reporting and disclosure frameworks. These, in turn, can support intelligent decision-making at the financial investment level.

As a leading example of the transition to a circular economy, the European Union has set out seven principles to guide this process: from defining key indicators, using a variety of data and information sources, to measuring progress against targets. All of this contributes to a broader plan of action that strengthens the relationship between circularity, carbon neutrality and the pursuit of zero pollution.

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Where do we start?
Circular economy strategies that reduce our resource use can reduce global greenhouse gas emissions by 39 percent and play a crucial role in mitigating the impacts of climate change. This requires action at a holistic level, with businesses playing a key role in this conversation for meaningful change to take place.

The first major step companies in the UAE can take is to start adopting sustainability-focused solutions and actively building them into existing portfolios. With a concerted, comprehensive effort and the right metrics and processes, it is more than plausible to generate significant revenue shares solely from sustainable product lines.

Overall, companies need to rethink existing, inherent linearity business models and build more sustainable, regenerative models that require the use of technology and a changed approach to dream, design and implement a better, more livable future for all.

dr Arturo Lujan is Chief Executive Officer of Al Ghurair Investment Ventures



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