In addition, increasing social and environmental awareness is driving investments in innovations to help increase consumer confidence. For example, SAP is working with startup Clothparency, which helps consumers get information about the impact on people and the environment of clothing they like and the overall level of eco-responsibility of those brands.
Leveraging an algorithm that collects data from a wide variety of sources, Clothparency’s solution “scores” clothing and brands against criteria including carbon impact, water pollution, recycling, wage conditions, origin and know-how, toxicity, animal welfare and organic farming.
Finally, Circular Economy initiatives are enabling new business models. For example, Coca-Cola’s World Without Waste initiative has led the company to “innovate beyond the bottle” by patenting a formula for packaging made from materials that are more than 30% plant-based; the ultimate goal is 100% plant-based packaging.
This initiative has already saved the company the equivalent of 700,000 barrels of oil and reduced its carbon emissions by 315,000 metric tons. What’s more, it’s become a new revenue source. Now, through a consortium formed with Kraft Heinz, Procter & Gamble, Nike and others, Coca-Cola is licensing the technology to other companies in consumer products, automotive, entertainment and elsewhere.
The bottom line? The Circular Economy will be the new driver of the bottom line. Initiatives like these are not about avoiding negative consumer perception or punitive regulation. They are about identifying new opportunities and organizing to accelerate growth, build consumer trust, increase consumer confidence and drive new opportunities for a sustainable, and profitable, future.