We’ve been hearing a lot about the circular economy lately and its efforts to reduce waste. But to really get a feel for it, consider the story of a company called Optoro. It is trying to solve the problem of retail returns. What happens to all those holiday sweaters, music systems, and power tools that get returned to stores every year? They don’t get put back on the shelf—it’s too much of a hassle for the retailer—so the stuff usually gets thrown away, donated, or sold to a liquidator. Most retailers, in fact, end up throwing out about 30% of their returns. It’s an inefficient process that costs the industry an estimated $260 billion annually in handling costs and lost revenue, not to mention causing a lot of stress on the environment.
That’s where Optoro comes in. At its Maryland warehouse, it tracks, tests, and sorts returns, and then finds ways to resell the merchandise at a fair price. The company, which is working with 20 of the largest retailers in the U.S., says it will process 25 million items this year—more than double the number from last year. And the result? The software is reducing waste and emissions in the reverse supply chain. For one of its customers, Optoro estimates a 60% reduction in waste and a 20% reduction in carbon.
For that kind of performance, Optoro won an award at The Circulars, announced to today at the World Economic Forum Annual Meeting in Davos. It is one of eight awards announced to businesses, organizations, and government officials who have shown outstanding leadership in the promotion of circular economy principles.
It is important to celebrate winners like Optoro because if the world is to meet the climate targets agreed to last month in Paris, we will need great examples of how to reduce waste, energy, and carbon. That’s the thinking behind the second annual Circulars, which are run by The World Economic Forum, in collaboration with Accenture. “The circular economy,” said Peter Lacy, Global Managing Director, Accenture Strategy, Sustainability “could unlock $4.5 trillion of growth by 2030, and these important awards demonstrate that digital disruption and the break from today’s ‘take, make, waste’ business models create a swift path to innovation, growth and competitiveness.”
The Circulars awards program attracted over 200 entries from 36 countries. The judging panel was drawn from the Young Global Leader community of the World Economic Forum and leading experts across business and civil society. In addition to Accenture, The Circulars are sponsored by BT, Ecolab, Alliance Trust and SABMiller. The media partner is Fortune Magazine.
The eight Circulars were awarded as follows:
- The Fortune Award for Circular Economy Leadership (joint winner): Feike Sijbesma, CEO, Royal DSM, who has led DSM’s circular economy strategy. DSM has spearheaded research into fossil fuel substitutes. Also awarded to Professor Dajian Zhu, Director of Institute Governance for Sustainable Development, Tongji University, Shanghai, for shifting the attitudes of business and policy leaders on circular economy eco-design models throughout China.
- The Accenture Award for Circular Economy Multinational (joint winner): Royal Philips, for pursuit of circular economy models in healthcare and lighting and for developing a circular sales criteria that is due to start in 2020. Also awarded to Veolia: for using circular strategies for re-manufacturing, prolonging product lifecycles, waste water recycling and energy efficiency.
- The Ecolab Award for Circular Economy Enterprise: Optoro, for designing high quality reverse logistics solution which changes the way retailers view their distressed inventory; rather than seeing it as waste or a liability, the company’s circular-focused software helps present it as a source of value.
- The Young Global Leaders Award for Circular Economy Entrepreneur: LanzaTech, the clean tech solutions provider produces commercially successful durable materials from low-carbon fuels and chemical recycling.
- The Award for Circular Economy Government, Cities and Regions: Flanders’ Materials Program, describing itself as a ‘network of networks’, has conducted intensive research and created circular economy packages to help public and private organizations adopt circular procurement models.
- The BT Award for Digital Disruptor: Materials Marketplace, a collaboration led by the US Business Council for Sustainable Development (USBCSD) and Corporate Eco Forum, created a cloud-based collaborative platform with global partners to track and exchange undervalued materials among multinationals and large SMEs.
- The Alliance Trust Award for Circular Economy Investor: DLL Financial Solutions provides equipment financing and leasing to extend the lifecycle of technical assets.
- The People’s Choice Circular Economy Award: Canon. The first company to implement a closed loop recycling system for printer cartridges in 1992. Canon has extended its global toner recycling program to 24 countries.