From jewelry to food waste, companies focus on the circular economy

From jewelry and clothing to food waste, a growing number of sectors focus on operating as part of a “circular economy”, with the aim of waste less and harvest the financial benefits in the process.

The increase in the cost of raw materials and a movement to reduce carbon emissions could mean that working in this way becomes “critical”, according to Goldman Sachs, which said $ 4.5 billion for 2030.

In simple terms, the circular economy refers to the process of reuse, repair or recycling of products while keeping the waste to a minimum. Represents a removal of the “Take-Make-Waste” linear model, according to the Ellen MacArthur FoundationA beneficial organization that investigates and promotes the circular economy.

“The circular economy is not about making small incremental changes in our current system: it is about completely transforming the way the entire system works,” said the executive protagonist of the Foundation, Reniera O’Donnell, in an email to CNBC.

“A circular economy follows three principles driven by design: eliminate waste and pollution; it circulates products and materials with its greater value and regenerate nature,” he added.

For example, the Chinese company DeArtree buys and restores used office furniture and then sells it or rents it to companies such as Microsoft, Tencent and Starbucks. The Dutch clique company, meanwhile, collects food waste as coffee and sells them to companies that turn them into new products.

Even cities are aimed at becoming “totally circular”, with Glasgow Commit to do so by 2045 and Amsterdam by 2050.

Working in this way can mean a change in mentality. US Jewelry Company. Sonalore says It is “shaking” the industry when operating an unusual business model: it will buy its pieces from customers when they no longer want them, guaranteeing to pay the market price for gold less a rate of 15%.

For Nidhi Singhvi, co -founder and CEO of the company, this type of model works best for high value products: think of luxury watches or cars. “Successful commercial models in a circular economy depend on three components: valuable underlying assets, transparent prices or (a) fair prices established by demand and supply forces, and efficient mechanisms for resale,” he told CNBC by email.

Singhvi, who lives in California, said that young people “care deeply about sustainability.” “Deep and ask questions about supply and supply chain, and weigh the environmental impact of what they buy,” he said.

Added to this, millennials are less rich than their parents and, therefore, think “more as investors” when buying, considering the resale value of clothing and accessories, said Singhvi. In fact, the second -hand clothing market will reach $ 350 billion worldwide by 2028, compared to $ 264 billion this year and growing three times faster than the clothing market in general, According to a Thredup fashion resale website report.

Singapore -based manufacturer SMC CorporationIt manufactures industrial equipment and focuses on products that reduce emissions and raw materials, is in the list of “high quality” circular economy companies of Goldman. Also on the list is the Chinese company Lenovowhile their “general circular enablers of higher score” included the signing of the USA. Waste management and French company Veolia.

“A circular economy is essential to solve a low carbon economy and loss of biodiversity, which is increasingly recognized by investors, companies and politicians,” said Goldman analysts.

In fact, several regulations of the European Union demand that circularity be included in the design of the product and the EU has Action plans Going things like plastics, textiles and food waste.

Food waste is a “market failure” and an “environmental failure”, according to 2024 of the UN Environment Program, 2024 Food waste index reportWith one billion wasting meals worldwide. Meanwhile, more than 700 million people were affected by hunger every day, according to the UN report.

The Big Food Foodsign Challenge of the Ellen MacArthur Foundation aims to address this problem. The group will announce the details of the food products that have been made in line with the principles of the circular economy, taking into account things such as biodiversity and the use of water in its production.

“Currently, the way in which our food is designed means that we bend nature to produce food, but we can make different design decisions so that food can be designed so that nature thrives,” said O’Donnell.

It is a topic that has been close to the heart of the Matthew food security specialist for more than two decades. “If you have seen what the poor of the earth have suffered, it is fine, in the last 100 years, you will agree with me that if we do not begin to investigate that circularity of the economy and the way we do agriculture, it does not go To look very, very brilliant, “he told CNBC by video calls.

So participate in several Singapore -based agricultural technology companies that aim to produce food in a sustainable way, including KosModehealth, which extracts worn grain proteins spent to make noodles.

In Singapore, the government is expanding its requirements for sustainability revelations, with the Singapore Stock Exchange that requires That financial, agricultural and energy industries report on their climate policies and objectives since 2024. This year, construction and transport sectors are also included.

He said investors are asking more questions about climatic revelations, adding that he expects a “change” in the money market towards sustainability.

“The value of ties, especially those related to sustainability, will take the front stage. It will become increasingly important,” said so.

For Singhvi jewelry businessman, circular models can be applied to multiple industries. “This is what excites me as a founder: we already know that these models work. The real challenge and the opportunity is to bring this thought to the traditionally opaque industries through technology and transparency,” he said.