Our Masterplan : Making Circularity Pay Off
OUR GOAL
The Circular Value Institute was founded to eliminate waste, recover value from materials that are now trashed, and generate economic value though reuse. These few lines aim to state what we want to achieve, why we think it is important, and why we can’t do it alone.
We want to accelerate the transition to circularity and debunk a common thought: profit is the enemy of the environment (and/or the climate), and the environment (and/or the climate) is the enemy of profit. The evidence of climate change and resource depletion on people, the planet, and businesses make it crystal-clear that sustainability is a perfectly reasonable (or the perfectly reasonable) compass to drive business decisions.
Our guiding principles are: be data- and science-driven; make the greatest impact; address concrete challenges; be transparent; listen to your needs.
We have one goal: help you build, market, and sell products that are designed for re-use, that are actually re-used, and that create value for shareholders, the environment, and society. This will bring CO2 emissions down, limit resource use, and future-proof your business.
Not last, we believe that circular products can contribute to quality jobs creation, community well-being, and more equitable value chains. We seek to promote a concept of circularity that not only creates shareholder value, but also contributes to the prosperity of society as a whole, notably in disadvantaged areas and low- and middle-income countries. By empowering people to keep value within the economy, we aim to unlock new economic opportunities globally, especially in places that need them the most.
THE CIRCULAR VALUE INDEX
Our methodology – the Circular Value Index – measures the feasibility of integrating a product into a circular business model that is based on reuse.
In its simplest form, circular value is the result of three components:
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Residual value: what's the value of the item after a use cycle?
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Cost of reuse: how much does it cost to reuse the product or material?
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Risk: what are the environmental, health-related, regulatory and financial risk involved?
The Circular Value Index is product- and scenario-specific. It depends on who reuses the product, where they do so, and for what time span one calculates circular value. For example, circular value of an item that is re-used in Belgium after a 10-year period will be different from circular value of the same item re-used in New York after 5 years. This comes with no surprise as labour cost (which is an important part of the cost of reuse) is different in New York than Belgium; risk may be different (regulations banning certain products may exist in one legislation and not/not yet in another); how much time a building is used (on average) before works are done (use change, expansion, etc.) also differs.
A (SIMPLE) DIVE INTO THE METHODOLOGY
All this sounds very high-level, but can I apply it to my products? Let us dig a bit deeper with some examples to make things concrete.
Residual value takes into account the highest value among the emotional price, the second-hand price, the buyback price, and the resource price of an item. For an original Le Corbusier chaise longue, residual value will be its emotional and second-hand price, respectively the value that you attach to having a piece of art in your living room, and how much your friend is ready to pay you to have that chair in his house. For a modular wall, residual value is the buyback price of the metal frames, the insultation, and the plinths that make the wall.
Cost of reuse considers demounting, repairing, selling, transporting, storing, checking quality, disposing of materials that can’t be reused, etc. Let’s take a refurbished smartphone. Cost of reuse will be the sum of the labour cost needed for inspection, hardware repair, software reset, etc. plus the costs of disposing the components that were replaced, plus the cost for transport, if any. For a wall, the same logic applies. Workers will have to disassemble (but not destroy!) the wall. A fraction of the materials may not be recovered and accounted for as disposal costs, but most of the value will stay.
Risk encompasses regulatory changes, toxicity, evolving trends, obsolescence, and the financial stability of both producers and customers. The more technological components in a wall, the greater the risk of obsolescence will be. The more components of a smartphone are glued together on a circuit board, the greater the risk will be that, for example, that product will not comply with right-to-repair regulations.
That brings another consideration. When it comes to circularity, it all starts with design [1]. Unfortunately, lazy design was not an issue worth-considering in a linear economy. In a make-use-waste economy, a wall is built, then hammered down, and the rubble disposed of. In a circular economy, it’s important to keep the cost of reuse low. Let’s take LEGO®’s[2]. They are assembled, used, disassembled, and reused again. LEGO’s are simple, easy to use, long-lasting by-design: they have a Circular Value Index > 24. Why shouldn’t all products be more LEGO®-like?
[1] To be precise, the European Commission’s Joint Research centre estimates that over 80% of all product-related environmental impacts are determined during the design phase of a product.
[2] We are not sponsored by LEGO’s, but we are great fans of what you can do with them.
THE CIRCULAR VALUE NETWORK
A formula alone can’t change things. This is why we provide our members with a network centred on circular value.
We want our members to make the most out of our address book of professionals working on circular economy in businesses, academia, consulting agencies, governments.
We will continue to go to key events on circularity worldwide and we will bring your cases, success stories and challenges on the stage whenever possible. You will have the opportunity to be featured in our podcasts, newsletters, and events.
We don’t want you to be just a logo on our website. We want you to meet project partners, get industry recognition and help your products make a concrete impact.
HOW WE CAN HELP YOU
We work on a membership base: for a yearly fee, we provide you with what you need to use our methodology: a toolkit, data, a network of professionals and experts. You will be able to use the index for your clients or in-house.
While our focus is the built environment, we are not limiting ourselves to the construction sector. We want electronic items, packaging, textiles – you name it – be designed for circularity, re-used, and generators of value. We believe that circular economy is the way to go and circular value is the way to make it happen.
Do you want to spark a discussion on circular value in your company, with your members, during an event, a workshop, a lunch & learn? Do you want to organise a training on circular economy?
Send us a message and we’ll make it happen!
