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Delivering on circularity

24 March 2022

The logistics process has a crucial role to play in driving sustainability, says DHL in its Delivering on circularity, Pathways for fashion and consumer electronics white paper.

ENSURING THAT global production and consumption is compatible with environmental goals lies at the core of sustainability. It requires a move away from the predominant produce-sell-use-waste model and toward one that significantly extends the “use” phase, adds new models to the “sell” phase, and turns waste into valuable inputs going back into the “produce” phase. This is circularity.

The report highlights the circularity opportunity in consumer goods, particularly as it relates to fashion and consumer electronics. Our analyses yield the following key insights:

The fashion and consumer electronics industries drive a large share of GHG emissions and other environmental impacts (including resource, land and water use, as well as waste). Together, their carbon footprint makes up approximately 6% of global emissions. Currently, around 20% of garments produced are never used, and smartphones are often exchanged after just 2–3 years. Therefore, the positive impact that circularity in these two industries could have is pronounced, and industry front-runners are actively participating in the paradigm shift toward circularity.

“Novel circular business models diversify product and service portfolios and expected positive customer engagement also serves as a clear brand booster. While circularity makes products more sustainable, solutions that also deliver business benefits make circularity sustainable.”

Up to 80% of emissions of an average fashion or consumer electronics item accrue during production. Hence, extending the product lifetime as much as possible is essential. The 5 Rs provide the critical dimensions to achieve circularity, by: Reducing use of virgin materials in production, Repairing products to extend their first lives, Refurbishing older products to go back on the market Reselling products to new owners, and Recycling products at end of life into materials for new production. Especially giving products a second life can curb emissions by 55 to 75% per device compared with producing a new device from virgin materials.

The transformation will come with the use of 10 + 3 building blocks and enablers to go from supply chain to supply loop. 10 building blocks and 3 core enablers guide the successful transition toward circularity. Materials, products, and packaging must be innovated, agile production and novel use concepts launched, and smart product return and recycling developed. To bring these elements to life, supply chains need to be designed in a circular way, while ensuring visibility and close orchestration throughout and establishing circular consumer behaviours.

Call for action

The transition must be a concerted effort from 4 stakeholder groups: brands will create circularity opportunities via new products and use models, customers will actively participate in circular behaviours, governments will create an environment that encourages these behaviours, and logistics players will enable the new circular flow of goods. Above all, only if all stakeholders take on their responsibility and act now – thereby accelerating a mutually reinforcing loop – can circularity become a reality.

While the successful transition toward circularity is certainly a shared responsibility and effort, logistics players are the natural backbone. Circularity changes the way materials and products move – from a straight line to a regenerative circle – and efficiently managing the flow of goods is what logistics is all about. We at DHL are looking forward to partnering with circularity’s stakeholders by serving as an enabler for the new physical and data flows within the supply loop.

Deutsche Post DHL Group CEO Frank Appel says: “The journey toward circularity is one that many industries must take, but the opportunity in consumer goods – particularly fashion and consumer electronics – merits a closer look. The presence of these industries in our lives is nearly universal, the measures that the industries’ stakeholders can take are clear and manageable, and the potential positive impact is huge.

“Novel circular business models not only diversify product and service portfolios; expected positive customer engagement also serves as a clear brand booster. In other words, while circularity makes products more sustainable, solutions that also deliver business benefits make circularity sustainable.

“Logistics players can be the ideal facilitator of this new relationship and its many new moving parts, doing what they do best: orchestrating the intricate flow of goods.”

You can download the report here - https://bit.ly/3wsIJqc