Three Key Aspects for Sustainable Business

Today, Saudi government presents a positive initiative in shifting to sustainable development and it aims to decouple GDP from relying on oil production. This required to shift also in individual mindset and organisations culture to be more sustainability oriented. For businesses, promoting innovation, optimising processes and creating sustaible business models are critical aspects towards sustainable business.

Circular economy (CE) and Sustainable development have become prominent topics. Sustainability is defined as a development that delivers the needs for the present generation without any negative influence on the demands of future generations. CE is an approach that drives sustainability goals to fulfil social, environmental, and economic benefits through reduced global reliance on the planet resources. CE aims to change the way that we use resources from linear to circular system by returning them back to the economy to generate more value. In a linear economy, materials are used for make-take-use-dispose, however, in CE products are designed for 6R.

6R for Sustainable Products

1- Eco-innovation (EI) refers to the participation and contribution of businesses in the sustainability process in minimising ecological issues and preventing environmental harms by developing new ideas, products, and processes. Sustainability is a key driver of innovation and a source of competitive advantage. EI is the key part of CE where achieving the sustainability without it is impossible.

2- Operation and process management play a crucial part in CE and sustainability fulfilment. Sustainable operation management is the set of skills and concepts that allow an organisation to acquire and achieve sustainable performance to develop a green product design and omit waste in order to reduce operation cost and pollution. For example, Xerox generate $400 million annual saving due to implementing a recycle management programme. In other words, sustainable operation is the operation under green processes to deliver green products. Operation management includes product design, production planning & control, and supply chain management, and, according to the World Business Council for Sustainable Development, adaptation of CE requires a fundamental reshaping of a company’s operation management.

3- Circular economy business models (CEBMs) are strategic approaches that define business development and drive change by reconstructing an organisation’s purpose and values which require value chain scanning, market analysis, vision, and stakeholder perspectives. CEBMs benefit organisations to transform from a linear economic system to a circular system that boosts performance, growth, and innovation with an eye to gaining a circular advantage. However, it is important to consider:

• CEBMs have to guarantee that positive sustainable actions do not lead to negative ecological results.
•  Design for reuse could benefit the recovery company more than the manufacturer and lead to a mispricing risk.
• Design-for-long-life items should not lead to greater maintenance cost and environmental damage.

Finally, Due to global population growth and resources depletion, CE and sustainable development are essential to ensure a decent life for all. Apart from its social and environmental advantages, CE has a justifiable value for businesses such as enhanced quality, sales, reputation, and stakeholders’ trust. Today, sustainability has become a business strategy due to its potential to create a competitive advantage for companies by leading cost reduction, enhancing quality or producing differentiating products. Even in the linear economic model, companies are also concerned about energy and waste consumption. However, in CE, reengineering business processes such as human resource practices, eco-design products and effective production processes from upstream to downstream will help the company to be a leader in sustainable development.