Data-driven processes are more essential than ever to make the circular economy a reality, mainly by increasing the lifespan of raw materials
By Dr Arturo Lujan
As we continue to feel the increasing effects of climate change, there is a fundamental conversation to be had around mitigation and resolution. At present, 45 per cent of global greenhouse gas emissions result from the manufacturing of cars, clothes, food and other products that are used daily – with waste and pollution playing a significant part in this worrying statistic.
If business continues as usual, we are on track to emit 65 billion tonnes of greenhouse gases in 2030, and reach a 3-to-6⁰C temperature increase by 2044. This would create an even greater challenge for the living conditions of billions of people. To prevent this, we must take greater responsibility, to reduce environmental impact, be mindful of carbon footprint and, above all, adopt a circular economy.
A circular economy moves away from a degenerative linear model where we take, make, use and dispose, and inches towards a regenerative approach where we rethink the way we design, produce, and use the things we need.
In a circular model, consumption and production are cyclical but sustainable – eking out the optimal use of a material or product for its entire lifecycle before it is ultimately disposed of, in an environmentally responsible manner. In a circular economy, the focus is not only on maximising efficiency and reducing waste in the here and now – it is future-focused, and considers the impact on our children’s livelihoods and generations to come.
Why circular economy is good for businesses in the UAE?
Whilst certainly a responsibility for businesses, ‘going circular’ also presents a business opportunity to unlock efficiencies by capturing more value from the materials and resources used to make products and deliver services. It can help create new, efficient consumption patterns that reduce new purchases and encourage the repurposing of existing materials.
While many of the economic benefits and opportunities are long-term, indirect, and require significant investment, government policies can help create more immediate financial incentives. Transitioning towards a circular economy is becoming more cost-effective in the UAE, with Dubai’s government mandating a major rise in the cost of depositing non-recyclable waste and utilising single-use plastics in line with the emirate’s target of zero waste by 2030.
This, in addition to the UAE’s own Circular Economy Council and policy, enables a transition away from a linear economy, with a focus on four main sectors: manufacturing, food, infrastructure, and transport. Policy is essential for levelling the playing field during this transition, not only setting a long-term vision around circularity, but also building capacity, infrastructure, and support systems for research and development efforts.
How data can enable us to adopt a new system?
Intelligent data-driven insights have always been the key to enabling both business transformation and building a sustainable business model. Data-driven processes are more essential than ever to make the circular economy a reality, mainly by increasing the lifespan of raw materials used for production.
Scattered data on its own would not give decision-makers the knowledge they need. It should be enabled to travel across the value chain and exchanged within the organisation – so traceability is key. It is also imperative that data and knowledge leads to action, encouraged by a culture of innovation, sustainability and a willingness to re-imagine business models.
Any organisation looking to build sustainability into its core business needs to ensure future data quality and availability by scaling dedicated circularity measurement tools and integrating circularity metrics into reporting and disclosure frameworks. These, in turn, can support smart decision-making at the financial investment level.
As a leading example in the transition towards a circular economy, the European Union established seven principles to guide this process: from defining key indicators, to leveraging a wide range of data and information sources, to measuring progress against targets. All of this contributes to a wider action plan that strengthens the relationship between circularity, climate neutrality and a zero-pollution ambition.
Where do we start?
Circular economy strategies that reduce our use of resources can cut global greenhouse gas emissions by 39 per cent, playing a crucial role in mitigating the impact of climate change. This requires action on a holistic level, with businesses playing a key role in this conversation for any meaningful change to occur.
The first major step that businesses in the UAE can take is to start adopting sustainability-led solutions and actively build them into existing portfolios. With a concerted, top-to-bottom effort and the right metrics and processes in place, it is more than plausible to start generating significant portions of revenue exclusively through sustainable product lines.
Overall, organisations need to rethink existing, inherent business models of linearity and build for a more sustainable, regenerative models that will require the use of technology, and a change in approach to help dream, design and execute a brighter, more livable tomorrow for all.