Welcome to Part 4 of our Sustainability Glossary Series! In this edition, we focus on the essential terms driving the circular economy. Whether you’re exploring eco-friendly product design, rethinking waste, or shifting to service-based models, this glossary can help you navigate the foundational concepts.
1. Circular Economy
Definition: A framework that eliminates waste by keeping materials, components, and products in continuous use through reuse, recycling, and regeneration.
Why It Matters: Circularity reduces dependency on finite resources, lowers negative environmental impact, and supports long-term sustainability. For SMEs, it opens doors to cost savings and customer loyalty.
Learn More:
- Explore frameworks and insights on circular systems from the Ellen MacArthur Foundation.
- Visit the European Parliament´s resources on the topic of circular economy.
2. Take-Back Programs
Definition: Initiatives where businesses encourage customers to return used products for repair, refurbishment, recycling, or proper disposal.
Why It Matters: Take-back programs close the loop in product lifecycles, reducing waste and recovering valuable materials. They also foster customer engagement and sustainability credibility.
Learn More:
- Patagonia’s Worn Wear program is a leading example of a take-back scheme that extends product life.
- Read more in this article by Project Cece, discussing the benefits and potential pitfalls of take-back schemes in fashion.
3. Resource Efficiency
Definition: The practice of using materials, energy, and water efficiently to minimize waste and environmental impact while maximizing productivity.
Why It Matters: Resource efficiency helps SMEs save costs, meet environmental standards, and align with growing regulatory and market demands for sustainability.
Learn More:
- The United Nations Environment Programme (UNEP) provides tools for improving resource efficiency in businesses.
- Read more about resource efficiency on the website of the German VDI Center for Resource Efficiency.
4. Modular Design
Definition: A design approach where products are created with replaceable or upgradeable components, making repair and recycling easier.
Why It Matters: Modular design extends product life, reduces waste, and enables businesses to cater to growing consumer demand for sustainable and repairable goods.
Learn More:
- Companies like IKEA and Fairphone champion modular design, integrating it into furniture and electronics respectively.
- Read interesting insights on the webpage of Modular Management.
5. Eco-Design
Definition: A process where environmental impact is considered at every stage of a product’s lifecycle, from material selection to end-of-life disposal.
Why It Matters: Eco-design promotes sustainability by creating products that are durable, repairable, and recyclable, meeting the expectations of eco-conscious consumers.
Learn More:
- Cradle to Cradle Certified® offers a globally recognized framework for eco-design innovation.
- The new European Ecodesign for Sustainable Products Regulation(ESPR) is aimed at fostering the transition to a circular and sustainable economy.
6. Industrial Symbiosis
Definition: A collaborative approach where businesses exchange materials, energy, or by-products to create mutual benefits and reduce waste.
Why It Matters: Industrial symbiosis drives cost savings, reduces waste, and fosters innovation by transforming one company’s by-products into another’s resources.
Learn More:
- The Kalundborg Symbiosis in Denmark is a globally recognized example of this practice.
- The Sfridoo website provides several other examples of industrial symbiosis.
7. Reverse Logistics
Definition and how it is different from take-back programs: Reverse logistics is a process where products are returned from customers to the producer for repair, refurbishment, recycling, or safe disposal. Take-back schemes are consumer-facing programs designed to collect used products, often serving as the first step in a company’s broader reverse logistics process. While take-back schemes engage customers, reverse logistics manages the operational processes that follow, such as sorting, transportation, and recycling.
Why It Matters: Reverse logistics closes the loop in supply chains, reducing waste and recovering value from used products.
Learn More:
- The Lush black pot recycling program exemplifies reverse logistics in action.
- Reverse logistics explained on the NetSuite webpage.
8. Product-as-a-Service (PaaS)
Definition: A business model where customers pay for access to a product or service rather than owning it, incentivizing durable and reusable product designs.
Why It Matters: PaaS aligns with circular principles, reducing waste and providing recurring revenue streams for businesses.
Learn More:
- HURR Collective is a UK-based fashion rental platform that allows customers to rent designer clothing, reducing textile waste and promoting sustainable fashion through reuse.
- Product as a service explained on the Circularity Platform website.
Conclusion: Building a Circular Future
As we have already explored in one of our previous articles about the Circular Economy Strategies SMEs Can Use to Increase Sustainability, circular economy concepts are essential for businesses aiming to balance sustainability with growth. By exploring terms like eco-design, reverse logistics, and modular design, SMEs can gain practical tools to reduce waste, conserve resources, and meet customer expectations for sustainability.
As we continue our Sustainability Glossary Series, we’ll explore more key concepts driving SME sustainability practices. Did you find this helpful? Subscribe, share your thoughts and let us know which sustainability topics you’d like us to cover next!
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