The View

Businesses must see their products as a service to fuel a more sustainable, circular economy

Name: In Malaysia, ocean-bound plastic waste is transformed into furniture
Uploaded: 2021-07-22T06:30:26.000Z
Duration: 2 min 12 s
Description: In Malaysia, ocean-bound plastic waste is transformed into furniture

The shift can make economies more circular by breaking patterns of mismatched supply and demand while generating growth opportunities for any industry

Building a circular economy requires gold-standard systems for taking back products and preparing them for their next life, as well as shifting revenue streams

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A man photographs ‘Mount Recyclemore’, an artwork made from electronic waste by Joe Rush and Alex Wreckage, ahead of the Group of 7 summit in Cornwall, England, on June 8. Photo: Reuters

Michele Madonini

Michele Madonini is vice-president and managing director of Hewlett Packard Enterprise (HPE) Financial Services, Asia-Pacific & Japan.

Published: 2:30pm, 22 Jul 2021Updated: 2:30pm, 22 Jul 2021

The concept of a circular economy is not new. Retailers, especially fast fashion brands, have been at the forefront, driving new initiatives to change the paradigm through concrete programmes to reinvent the manufacturing and recycling process while making fashion a sustainable industry.

But one industry is not enough. According to the Circularity Gap Report 2021, the global economy was only 8.6 per cent “circular” in 2020, down from 9.1 per cent two years earlier.

Building a circular economy requires businesses across all industries to lean in. There is an opportunity to profoundly change how products are designed, manufactured, supplied and consumed. The “product-as-a-service” business model must be our end goal.

This is a radical departure from a commoditised model whereby companies sell a product and consider their job done. Instead, the producer retains ownership of – and responsibility for – the product throughout its entire life cycle.

The customer has full use of the product for as long as is needed, paying only for outcomes instead of the product itself or its upkeep. The producer, in turn, is responsible for building a quality product that lasts and is energy- and material-efficient. It is also their role to take the product back and prepare it or its components for reuse.

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In Malaysia, ocean-bound plastic waste is transformed into furniture

The “as-a-service” notion is an iteration of the “cradle-to-cradle” design concept developed at the end of the 20th century. The essence of its design remains true in our modern world when building a circular economy.