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September 6, 2019

An analysis of the circular economy platform

The circular economy platform is seen as an alternative to the traditional linear economy of taking, making and disposing.

By Christopher Marchant

The circular economy platform is seen as an alternative to the traditional linear economy of taking, making and disposing, and offers business leaders and government opportunities of long-term growth.

The goal of a circular economy platform is to minimise waste and to extract the maximum value out of the recovered resources after the end of their service life.

According to the Ellen MacArther Foundation, transitioning into a circular economy requires a cross industry, and multi-disciplinary approach that would ultimately bring new opportunities for innovation, growth and resilience.

Analysis of circular economy platform: benefits

In a 2015 report by Growth Within, transitioning to a circular economy in Europe could add €900 billion to GDP by 2030, increase household income by €3,000 a year, and halve carbon dioxide emissions compared with current levels.

The EU Commission employed the proposition of a circular economy package in July 2014, with hopes of reconciling economic growth along with environmental benefits.

Analysis of circular economy platform: issues

Despite the many pros of this systemic change, the circular model does involve risks.

Shiva Dustdar, head of the innovation finance advisory at the European Investment Bank (EIB), said: “In the transition, there will be winners and losers. If you [as a bank] have loan exposure to a number of companies, and the companies start switching their business model, that in itself requires you to be vigilant. If a company has [so far] sold products, has had revenues [upfront], and all of a sudden starts to lease them out, it has an impact.”

Analysis of circular economy platform: industry assessment

Pascal Layan, deputy chief executive officer of BNP Paribas Leasing Solutions, has appeared on French television show Green Reflex to discuss the circular economy and remarketing of equipment.

Speaking to presenter Erwan Morice, Layan detailed an overview of the leasing process, explaining how ownership is retained by the lessor and how remarketing is integral to many sectors.

Of an example sector with a circular economy platform BNP Paribas Leasing Solutions worked in, Layan said: “BNP Paribas Leasing solutions works with technological equipment including smartphones, laptops, and photocopiers. For remarketing this equipment we will go through a logistics system, where we will do the repairs needed, such as destroying customer data [on the remarketed device].

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