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Circular Economy Innovations Transforming Business Sustainability for Climate Action

Circular Economy Innovations: Transforming Business Sustainability for Climate Action

The circular economy is consolidating itself as a highly relevant business strategy in reducing carbon footprint, costs, and boosting competitiveness in the market. Its focus lies in closing the product lifecycle to minimize waste generation and optimize resource utilization. The relationship between the circular economy and climate action is undeniable. By reusing, recycling, and sharing existing resources instead of relying on continuous extraction, there is a significant reduction in emissions.

This transition not only decreases the need for new materials but also alleviates pressure on ecosystems and contributes to reducing emissions associated with resource extraction. Reusing materials or products and extending their lifespan are essential elements in the circular economy. By prolonging the life of materials, the need for constant production decreases, thereby reducing emissions linked to manufacturing. Repairing and upgrading electronic devices, for instance, not only reduce electronic waste generation but also contribute to decreasing greenhouse gas emissions related to the production of new devices.

At Green Initiative, we take satisfaction in introducing circular economy best practices in various companies, thereby contributing to climate change mitigation goals. For example, we have been collaborating with Machu Picchu on several actions to mitigate its environmental impact caused by tourism activities in the area.

Embarking on Circular Sustainability: Transformative Innovations

One of the standout actions in this effort is the ‘Organic Waste Pyrolysis.’ Since 2019, the town of Machu Picchu has initiated a pyrolysis plant designed to convert organic waste into a product called Biochar. This initiative has been achieved through the joint work of Grupo AJE, InkaTerra, and the District Municipality of Machu Picchu.

Biochar not only serves as an effective fertilizer but also significantly

Food Waste into Biochar

improves soil properties while potentially capturing carbon dioxide (CO2) from the atmosphere on its surface. The waste utilized mainly comprises food remnants, diverting them from landfills and consequently reducing methane (CH4) production derived from their decomposition. The generated biochar conspicuously exemplifies circular economy principles by giving waste a new purpose instead of being discarded. Moreover, this product aids in strengthening reforestation in Machu Picchu’s Andean cloud forest, simultaneously promoting agricultural productivity in the region.

Another crucial mitigation action in Machu Picchu is ‘Biodiesel Production.’ Since 2018, in partnership with InkaTerra, a specialized transformation plant has been established to convert oils into biodiesel, representing another noteworthy example of the circular economy. It’s important to note that just one liter of oil can contaminate over 1000 liters of water. This initiative helps avoid inappropriate disposal of large quantities of highly polluting oils while promoting the production of a biofuel with significantly reduced greenhouse gas emissions, decreasing these emissions by over 95% compared to fossil fuels.

In the textile industry, adidas stands out as a company that has integrated the circular economy into its processes, especially in its sustainable fashion line. The brand uses recycled materials obtained from ocean plastic waste and fabrics manufactured from recycled materials. Additionally, they’ve adopted cruelty-free alternatives and eliminated the use of virgin materials. In essence, they have achieved a significant reduction in their carbon footprint by avoiding the manufacture of new materials. Green Initiative has collaborated with adidas Peru in several efforts aimed at raising awareness and promoting the circular economy.

In the gastronomy sector, we’ve collaborated with the SENAC School Restaurant (National Service for Commercial Learning) which recently participated in the 8th World Forum on Gastronomic Tourism by the UNWTO in Donostia-San Sebastián, Spain. At this event, SENAC presented an exemplary case of sustainable practices regarding climate change, showcasing profitable and environmentally responsible strategies within the tourism sector. Their primary focus was on reducing food waste through prevention measures, redistribution, and implementing revaluation processes that transform waste into valuable resources through recycling, composting, or other actions. This not only promotes economic growth through new income sources but also leads to a reduction in greenhouse gas emissions and contributes to a more sustainable food system.

initiatives and practices that exemplify the principles of the circular economy

Product Lifecycle Extension

  • Repair Cafés: These are community spaces where people can bring in broken items like electronics, clothing, or furniture to be repaired by volunteers, promoting the repair and reuse of goods.
  • Modular Design: Companies like Fairphone create smartphones with modular components that can be easily replaced or upgraded, extending the device’s lifespan and reducing electronic waste.

Sharing Platforms

  • Car Sharing Services: Companies like Zipcar and Turo allow users to share vehicles, reducing the number of cars on the road and the resources required for individual car ownership.
  • Tool Libraries: Communities set up tool-sharing libraries where individuals can borrow tools they need infrequently, promoting resource sharing and reducing redundant purchases.

Waste-to-Resource Innovation

  • Upcycling: Businesses like TerraCycle transform waste materials, such as used plastics, into new products like bags or furniture, giving a second life to materials that would otherwise be discarded.
  • Bioenergy Production: Anaerobic digestion facilities convert organic waste into biogas or compost, generating energy and nutrient-rich compost for agricultural use.

Circular Supply Chains

  • Closed-Loop Textile Recycling: Companies like Patagonia and Eileen Fisher collect used clothing, recycle the fibers, and use them to create new garments, reducing the demand for new raw materials.
  • Circular Packaging: Some companies explore reusable or biodegradable packaging materials to minimize waste and encourage a circular approach in their supply chains.

Renewable Energy and Resource Efficiency

  • Renewable Energy Transition: Investments in solar, wind, and hydroelectric power reduce reliance on finite fossil fuels, contributing to a more sustainable energy system.
  • Industrial Symbiosis: Industrial parks where different companies share resources (like energy, water, or by-products) to improve efficiency and reduce waste generation.

Regenerative Agriculture

  • Agroforestry and Permaculture: Practices that integrate trees, crops, and livestock in a symbiotic manner improve soil health, increase biodiversity, and enhance ecosystem services.

These examples illustrate diverse approaches within the circular economy framework, showcasing how businesses, communities, and industries can implement strategies to reduce waste, preserve resources, and create a more sustainable and regenerative economy.

Sustainable Innovation Driving Efficiency and Collaboration

In summary, the circular economy not only represents an environmentally sustainable solution but also positions itself as an innovative strategy that drives efficiency, reduces costs, and carbon emissions. This approach benefits not only businesses but also significantly contributes to sustainability by allowing the connection between different sectors; in other words, one company’s waste can become another’s raw material. It’s expected that these mitigation actions can expand through cooperation with a greater number of companies.

The circular economy becomes a key element in transitioning to a more sustainable future, and it’s important to consider that the decisions we make in the next 50 years will have an impact influencing the next 10,000 years.

This article was writen by Alberto Urteaga and Erika Rumiche, from the Green Initiative Team.


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