Collaborate with supply chain partners to achieve a circular transition

4–6 minutes

Romeo Kaptijn

15 June 2023

“That’s how you come full circle”

In this article, Romeo Kaptijn explains why working toward circularity is just as important as working toward your climate goals and how you can shape the circular transition together with supply chain partners.

Circularity hero

You say that circularity is really a supply chain issue: explain!

Circularity works both ways: the products or materials you purchase, and the products you sell. This means that circularity requires collaboration beyond your own organization. You can start small with the parties closest to you, such as a supplier and a waste processor. With just the three of you, you can already create a closed loop and focus on reuse and recycling. You can then gradually expand the circle: the ripple effect. This happens, for example, when you want to make a certain type of material in a product more sustainable and look deeper into the supply chain to achieve this.

Why is it so urgent to start working on circularity?

The use of raw materials significantly contributes to climate change through greenhouse gas emissions, so working toward a circular economy helps achieve climate goals. In addition, the energy transition is also putting pressure on the availability of large quantities of raw materials. You must therefore view the climate issue through a circular lens in order to achieve these goals. Furthermore, circularity is closely linked to issues such as biodiversity and health — consider, for example, the negative impact of e-waste and microplastics. Unfortunately, in the absence of circular solutions, this will remain a reality. But the urgency lies primarily in the fact that there is still a significant gap in knowledge and solutions regarding circularity. Although we know that a circular economy is necessary, we do not yet fully understand how to achieve it.

"It would be great if you could address circularity across the industry and with your suppliers and come to a common position."

What does (European) legislation say about circularity?

A great deal of European legislation is currently being developed as part of the Circular Economy Action Plan (CEAP), such as legislation banning single-use plastics, legislation to reduce packaging and make it more sustainable, and legislation aimed at increasing opportunities for repair and extending the lifespan of products. These laws still need to be further developed and implemented at the national level.

Circularity also plays an important role in the reporting legislation (CSRD) that will apply to many companies starting in 2026. For example, companies must report, by weight, how much renewable and non-renewable material they purchase, what types and how much waste they generate, and indicate what portion of their product range adheres to circular principles. This presents a major data challenge, as these insights are often still lacking.

It is clear that circularity is going to become an increasingly important topic. What challenges can companies expect?

Circularity can conflict with climate goals. For example, trading in your old product for an energy-efficient one is a good choice in terms of your energy consumption, but from a circular perspective, it is better to extend the lifespan of products as long as possible. In addition, recycling materials also results in CO₂ emissions. That is why it is necessary to take a comprehensive look at the environmental impact of products, for example through a life cycle analysis (LCA).

Another challenge is that there are many interdependencies surrounding circularity. This leads to companies pointing to customers, consumers pointing to the government, and the government, in turn, pointing back to companies. It is therefore necessary to take the first steps together, maintain open communication, and ultimately have the government standardize new circular initiatives once they are sufficiently available. In the meantime, the government can already encourage these initiatives through measures such as subsidies.

"You have to look at the climate issue through a circular lens in order to achieve the goals."

I’d like to start implementing circularity practices in my business. What should I do first?

First, define your own vision and ambition; then share this vision with your partners and find common ground. It would be great if you could address circularity on an industry-wide basis and with your suppliers, and arrive at a unified position. The topic of packaging, for example, is a good starting point for seeking collaboration because it’s often not the core business.

We’ve found that it’s important to start with what’s already in place and build on that. You have to start small, step by step. So don’t let a lack of available data hold you back. You can be honest and transparent about your ambition to become more sustainable and work toward a circular product, but acknowledge that you’re not there yet. A transition doesn’t happen overnight.

How does 2BHonest help its customers integrate circularity?

We develop business strategies centered on circularity, and we also help organizations gain insight into their circularity impact, such as through the Swinkels Circularity Index (SCI). In the installation sector, we help with the Brancheplan Verpakkingen. For example, we’ve created a template with purchasing terms that buyers can use in their discussions with suppliers. An organization can decide for itself how to integrate this: as a basis for discussion or as part of a contract. And we play a catalytic role: we hope to use our expertise to get sectors moving forward.

Want to learn more about integrating circularity into your business? Romeo is here to help!

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