The environmental and economic benefits of recycling in a business model

Dorte Vigsø
Dorte Vigsø
August 22, 2019

Learn about the benefits of recycling for businesses, from saving money to improving your business image.

Recycling has become more than a business philosophy—it is a necessary way of life for companies that wish to survive and even thrive in a competitive global market today. As more consumers consider the “green” factor when choosing which businesses to buy from, companies are under pressure to find more efficient ways to leave a smaller footprint. The benefits of recycling are more far-reaching than ever before, and companies are learning that the more environmentally friendly they can be, the better it is for the business overall. 

Environmental benefits of recycling 

When companies consider increasing their share of recycling material, environmental benefits are usually the first to come to mind. Construction companies that reduce their use of virgin materials can also have a significant impact on their carbon footprint. Use of new materials requires extraction, which requires energy use while depleting our natural resources. 

When unsustainable extraction activities are performed, the environment becomes unsafe for habitation over time. Also, the lack of recycling means that waste becomes a significant concern, as materials that are not re-used are often sent to landfills, where they may create additional problems. As this pattern repeats itself with more cycles of waste and more companies contributing to the damage, the impact on the environment grows.

For recycling to be effective, it must be considered already when designing the products and their way of production. For instance, stone wool can be manufactured using recycled material such as e.g. old stone wool, or even secondary materials from other industries, resulting in less waste going into landfills. At the same time, the new products see no loss in quality or performance and can be recycled again and again.

The benefits of recycling on the environment include less strain on the natural resources and reduced impact on the surrounding environment. Moreover, the possibility to use resources over and over again decreases the creation of waste in the long run. 

Economic benefits of recycling 

Companies may not realise the many economic benefits of recycling they can enjoy if their business goes greener. Some of the money-saving steps can include: 

1. Lower costs involved  

As a general rule, recycling waste from the market can either have a positive or neutral cost impact. In Europe, waste prevention and reuse, with better eco-design, is seen to bring net savings in businesses of up to 600 billion euros and boost the GDP by 1%. With recycling, the production process will use less energy while keeping more resources available for further use. 

2. Job creation  

Recycling projects tend to be a job generator, putting more people in the local community to work. When employment rates go up, businesses within the community benefit from the stronger economy as well. 

3. Government incentives 

Financial incentives are available for companies that go green, from emission reduction credits to business grants for companies that have recycling programs in the US. In the UK, increases in landfill taxes discourage waste dumping, while cities are encouraged to provide incentives offered by the central government to encourage individuals and businesses to do more recycling.

Why recycling is good business 

While businesses usually begin their recycling efforts to improve their environmental footprint, benefits can be more far-reaching than many companies realise. Businesses known for their environmentally friendly policies tend to have a better reputation with prospective customers. 

In a 2018 Nielsen study, 81% of global respondents feel strongly that businesses should help improve the environment. As awareness about the dangers of global warming continues to expand, concerns on environmental issues including waste are not going to diminish.

What is a circular economy and why do we care?

While it is the decision of individual businesses to go green, the benefits of recycling by single companies benefit society. A circular economy is one in which economic activity moves from the consumption of finite sources to a model where “waste” is designed out of the system. Instead of discarding materials, those elements are reused and repurposed. 

Some companies have embraced the circular economy model already. For example, Alaska Airlines now converts discarded airline seats into purses, while Southwest Airlines recycles used seat leather to use for duffle bags, soccer balls, and other items. HP now recovers ocean-plastic and uses it to create new ink cartridges. 

Recyclable materials go beyond plastic and leather. Stone wool, a material used for building sustainable infrastructures, is 100% recyclable. It can be produced by using up to 50% upcycled waste thereby reducing landfills and making for a natural fit for the “circular economy”.

Even so, our world today is only nine percent circular, a trend known as the Circularity Gap. The rest is based on a linear design progression that includes four basic steps; design, build, use, and disposal. A circular model changes the progression, according to the Ellen McArthur Foundation. Circular steps include designing with the intent to reduce waste and pollution, keeping materials in use instead of disposing them, and regenerating natural systems. 

Embrace what’s best for the environment

The benefits of recycling have an extensive reach, from creating a healthier environment to helping businesses find more efficient ways to operate. With both environmental and economic benefits for businesses, as well as the ability to create a positive reputation among customers, the circular economy is one that businesses can strive for today. 

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