World Environment Day: Scaling a circular economy

Make, use and dispose. Traditionally, this has been the standard approach to consumption and production. We always think of our next big purchase, but also forget our previous ones. Have you ever wondered where they go? What if every material could be used to make a new product?According to a recently published World Economic Forum report, the world produces over two billion tonnes of solid waste, and that’s expected to grow to 3.4 billion tonnes by2050 and about one-third of that waste is not managed properly. By volume, global waste includes 44 per cent food and organics, 17 per cent paper and 12 per cent plastic – all valuable commodities. With increasing awareness of the importance of waste, the circular economy has gained ground. Sustainable production and consumption practices are rapidly becoming a driving force.

Essentially, it eliminates waste by applying three basic principles: reduce, reuse and recycle.In 2021, the UAE cabinet approved the UAE Circular Economy Policy – a comprehensive framework to ensure quality of life for current and future generations. This includes supporting the private sector in adopting clean methods that spur green development. By adopting these strategies, the UAE is looking forward to having both imported and locally manufactured products that are efficiently designed, manufactured, repaired, reused, remanufactured and recycled. Selling all used products on the second-hand market is another good solution. In turn, this will help create a circular economy by increasing sustainability and reducing the carbon footprint. There are a number of local companies across different sectors that are addressing the issue with this vision.

Pre-owned fashion market

At this juncture, consumers, investors and other stakeholders of fashion retail seem to be at the forefront of increased consumption. Industry practices that are detrimental to sustainability, purpose, ethics and overall operations are being questioned. A number of alternative business models are taking shape in the wake of this movement towards conscious consumerism, among which is the pre-owned fashion market. Now estimated to be a multi-billion-dollar arm of the fashion industry, the second-hand luxury market witnessed a huge surge of 18 per cent from $36.1bn in 2020 to $37.3bn last year, according to Statista.

It’s expected to increase twofold by 2026 to an estimated global value of $77bn. This market continues to champion sustainable shopping by offering dedicated pre-loved goods sites. Kunal Kapoor founded The Luxury Closet in Dubai in 2012 as an online store for pre-owned luxury fashion items. Kapoor was born into an entrepreneurial family and worked for luxury brand Louis Vuitton before founding his own business. “All disruptive ideas come from sparkling trends. Circular economy is a transition where resources are not ‘used up’ but are used again and again. The core idea was to solve the sustainability issue and the democratising of luxury,” says Kapoor.

Consumer patterns are shifting towards a more conscious and sustainable approach to fashion. Pre-owned items are driving the fashion movement while offering buyers access to real luxury, which was previously unreachable for certain customers due to price or availability constraints. “Resale is the future of shopping. We expect one in six transactions to be pre-owned by the end of the decade. This marks a paradigm shift in consumer choice and the value chain of the fashion and retail industry. What we are excited about most is leading the industry to a more sustainable and environmentally friendly future,” states Kapoor.

“I really think it is the right thing to do for consumers to not buy new products continuously but buy pre-owned ones. People can exchange things, they can re-sell them, but not discard them. The next organic step is that the share of the pre-owned market will go up, but it will all become circular and the brands will become part of this. Look at the car industry – they manufacture a car knowing it will have multiple owners. The brands design the car around that, knowing that the warranty will need to be transferred and people will buy and resell it. In fashion, the brands will become the major contributors and enable the pre-owned and circular economy,” elaborates Kapoor.

As announced in the Circular Economy Action Plan, the EU Commission recently proposed new rules to make almost all physical goods on the EU market friendlier to the environment, circular, and energy efficient throughout their whole lifecycle from the design phase through to daily use, repurposing and end of life. The Commission also presented a new strategy to make textiles more durable, repairable, reusable and recyclable, to tackle the demons of fast fashion, textile waste and the destruction of unsold textiles, and to ensure production takes place with full respect given to social rights. “It just so happened that we stumbled upon something that has really become something of a trend now. With early signs of regulation coming in, industry players are going to be forced to become a lot more sustainable. There is also an adoption curve of green energy in resale of luxury items. Japan has been leading for the last 20 years, followed by the US. I would say it will take another five to seven years for the Middle East to catch up,” concludes Kapoor.

 

Tackling food wastage
According to the Dubai Carbon Centre of Excellence, food wastage in the UAE is estimated to be 3.2 million tonnes, with around 38 per cent of the food prepared daily being wasted, most of which comes directly from home. This number rises to 60 per cent during Ramadan. Leading supermarket chain Spinneys has become the first retailer to partner with the ‘Food for Life’ programme, a UAE initiative to drive nationwide trans-formation towards healthier diets from sustainable food systems. “We have joined a global coalition of food producers, manufacturers, and retailers to work together to halve food waste across the value chain by 2030. Through this, we are working with local suppliers to identify opportunities to reduce waste, whether through donations, knowledge-sharing or innovating new products and ways of extracting value from wasted food,” says Sophie Corcut, Spinneys brand and sustainability manager.

Through such partnerships, Spinneys aims to raise awareness of the issue of household food waste in the UAE with its customers, to provide practical tips on how to store food and make the most of food waste at homes. “We see waste as a flaw in the system. Our long-term goal is to design out waste in our food system, for the benefit of society, and the environment and for the long-term economic success of Spinneys and our partners,” adds Corcut. “Taking packaging, for example, we want to transition packaging design for a circular economy, applying the 4Rs of circular design (remove, reduce, reuse, recycle) and ensuring we choose materials based on the entire lifecycle of product and considering local behaviours and waste management infrastructure,” reiterates Corcut.

To start the circular journey, Spinneys has also tied up with PepsiCo and DGrad to introduce a reverse vending machine at its first sustainable concept store in Dubai’s Layan community, which enables customers to recycle their PET bottles in return for prizes and rewards. For single-use plastic bottles collected from the Layan store, DGrade will create sustainable clothing from its Greenspun yarn.“We want to offer our customers choice, whilst knowing we have a responsibility to take a more active role in educating and encouraging behaviour change,” states Corcut. In their sustainable concept store, Spinneys has implemented ‘The Refill Stop’. “This holds our largest range of refillable food and household products to date, including a retail first-in-the-region free filtered water refill station. To incentivise reuse behaviour, we’ve been rewarding customers who bring their own containers to store by giving them a dirham off their total bill as a ‘thank you’ from Spinneys for helping to reduce waste,” concludes Corcut.

Pre-owned electronics market

NorthLadder, a UAE-based digital platform connects customers looking to sell pre-owned electronics to a global network of buyers.

Electronic waste or e-waste is currently the world’s fastest-growing waste stream and projected to increase by 30 per cent by 2030, according to a report by Statista. All of us own multiple gadgets, most of which are unused, gathering dust at the back of our drawers. Our dependency on these devices has contributed to a global consumer electronics market worth an estimated $1tn, with that figure rapidly increasing. Applying the basic principles of a circular economy to the electronics industry is NorthLadder, a UAE-based digital platform that connects customers looking to sell pre-owned electronics to a global network of buyers. The company trades second-hand electronics such as smartphones, laptops and tablets, guaranteeing the most competitive price with no hidden charges.

“Our unique tech platform has enabled sellers to be connected directly to buyers, thus disintermediating the supply chain and giving customers the highest price in the market for their used devices. We have partnerships with the region’s electronics retailers, telcos, and distributors to enable the trade-in of devices. The devices we procure are bought by our dealer network who sell them to end customers, effectively increasing the lifespan of the device and promoting the circular economy model,” says Sandeep Shetty, co-founder and CEO of NorthLadder.

NorthLadder’s platform is auction-driven, on average offering the end consumer with up to 60 per cent more value for their second-hand device. “Circular economy ensures sustainable growth over time. With this, we can drive the optimisation of resources, reduce the consumption of raw materials, and recover waste by recycling or giving it a second life as a new product,” adds Shetty.

Since its launch, NorthLadder has served over 30,000 customers. It has more than 200 trade-in locations and over 500 dealers across three countries. Like any transformation, the shift from a linear to a circular economy is a highly complex task. “Every device that is traded in, is a device that ends up in another customer’s hands and not a land-fill, thus promoting both sustainability and circular economy. To that extent, our core business model promotes sustainability and a circular economy, while creating tremendous value for all stake-holders,” concludes Shetty.

Circular climate goals
On a broader scale, circular economy models offer a clear pathway to achieving our collective climate goals, tackling emissions tied to extraction, processing, manufacturing and landfilling of goods. In doing so, these business models create economic value, building local resilience and spurring innovation. Companies championing circular business models are gaining traction rapidly. A systematic change to a circular economy requires collaboration and partnership. It’s about time, we made a collective decision to enhance sustain-ability and shift the economy towards adopting greener practices.