Circular architecture photograph with title text overlay

Circular architecture photograph with title text overlay

The ‘circular economy’ is a phrase we’re hearing more and more in the commercial sector.

It’s broadly defined as a model of production and consumption which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible, so that the life cycle of products is extended.

It’s an idea that runs counter to the tide of consumerism that’s prevalent in our most of the world’s large and dominant economies, but that’s not to say it’s not gathering its own momentum.

In practice, it involves reducing waste to a minimum and when a product reaches the end of its life, its materials are kept within the economy wherever possible. These can be productively used again and again, thereby creating further value.

This is a departure from the traditional, linear economic model, which is based on a take-make-consume-throw away pattern and relies on large quantities of cheap, disposable materials and energy.

In a circular economy, a closed loop is created which minimises use of resources, creation of waste, pollution and emissions and therefore contributes positively to global challenges like climate change, biodiversity loss, excessive waste and pollution.

Circular economy case study – Techbuyer

Techbuyer is a highly successful operator in the circular economy. They help businesses maximise their IT budgets by supplying cost-effective new and refurbished servers, storage, memory and networking equipment from over 150 brands. They have seen significant success over the last 15 months as they have helped businesses adapt to IT hardware shortages as a result of the pandemic.

Sustainability Lead, Astrid Wynne explains: “Classed as an essential industry, we continued to work at full capacity during what was one of the busiest periods since the company began. The number of new customers between March and July 2020 increased by 85% compared to the previous four months, with nearly 15% of those sales resulting in repeat business.”

Founded in 2005, they have grown from a company run by just two people to a global organisation with multiple warehouse facilities located worldwide. Their skills lie in understanding supply and demand into the secondary IT market, a sector in which success requires a highly flexible approach to business.

Explaining Techbuyer’s business model, Rich Kenny, Group IT Director, comments: “We don’t ever know if we’re going to get the same product twice. We might have 50,000 of something one month and then none of it the next. This means we need to make the most of every sale.

“So, strong business relationships are hugely important and we pride ourselves on being results-focused with clients. For example, instead of the conversation centring on which piece of hardware they want, whether we can get it and how much it costs, instead, we ask them what they are seeking to achieve.

“We look at the problem or challenge they’re trying address and we work backwards from there. There might be any number of different solutions to the problem so with a strong, trusted customer relationship and our in-house expertise and problem-solving we can invite them to try a new approach that could be more cost-effective and get them better results.”

Passionate advocates of the power of the circular economy they regularly produce research on this topic. They also conducted a survey last year on attitudes to using refurbished IT equipment in the pandemic climate. There were global logistical challenges and a chip shortage to contend with, as well as a closer eye on cost as many companies increased their IT capacity. The survey found that 92% of customers who had bought refurbished products had very high confidence in buying refurbished in the future and that they are buying based on availability, reliability and quick delivery.

On the survey findings, Astrid Wynne said: “I find this really positive. It proves that there is a sound business case for making best use of resources, meaning it is all the more likely to become mainstream practice going forward. There is growing appreciation that refurbishment may be the highest appropriate level of remanufacturing for electronic products. Recycling technologies that can usefully extract all materials are some way off, so refurbishment and reuse are seen as the best option.”

Speaking about the broader benefits of the Techbuyer approach to IT recycling and sustainability, she added: “A lot of the criticism of taking a sustainable approach is that if you make choices that are environmentally or ecologically conscious you have to make an economic sacrifice, but it doesn’t have to be this way. It’s a case of thinking about things the right way round, looking at alternatives to solving the problem and being open to new approaches.  

“I like to think of it as a triple bottom line. We help businesses meet their commitments to people, profit and planet.”

 

Alistair Scott Somers

Alistair Scott-Somers

Executive Director, General Counsel and Director of Progeny Law & Tax

Alistair joined Progeny Law in October 2016 and heads up the Corporate team.

Learn more about Alistair Scott-Somers