Monday, December 11, 2023

The circular economy requires large investments but can be profitable in the long term

The financial and consumer sectors agree on the need to adopt circularity measures in their companies and that one of the main challenges they face is the creation of sustainable products at affordable prices.

The circular economy is the focus of most of EXPANSIÓN GreenWorld, the major sustainability event, where companies detail what steps they are taking to reduce their environmental footprint. The speakers at the circularity table agreed on the importance of moving towards a new economic model based on reduction, reuse and recycling.

The consumer challenge

In this regard, Ruth Sergi, head of Shopper Marketing & Sustainability Consumer Brands de Henkel Iberica recognized the important challenge his company faced as a manufacturer large consumption (detergents, adhesives and cosmetics). Since 75% of footprints in nature that it produces as a company focuses on the stage of use, that is, on the good or bad use made by consumers of the product at the end of its useful life.

To strive to improve customer behaviors, rod is betting on an ambitious strategy of packing. “We want 100% of all plastic packaging to be recyclable, 30% of our plastic to be recycled and a zero waste policy for the environment,” he commented. Sergi recognized that this required a powerful investment today to achieve future results. “In the short term it is not profitable but we have to value it as a long term investment because there is interest in consumer to continue, especially for young people.” However, he acknowledged, “it requires more costs.”

Circularity and efficiency

with Jaime de Jaraíz, president and CEO of LG Electronics Iberia, Circularity is very useful, “but to make it very useful you need to invest first.” In this case, LG is committed to making products that last a long time, in fact, it assures that “the most durable product is the one that lasts forever.”

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The president and CEO of LG Electronics Iberia equates circularity with efficiency, since the same raw materials are used over and over again. In the case of LG, 100% of the products the company puts on the market are recycled. “It’s not a cost, but an opportunity.”

Jaraíz explains how a efficient equipment This can allow significant energy savings and, therefore, economic savings for the user. For example, he said, the current washing machines allow you to dose the exact amount of detergent needed to wash, which reduces the amount of products wasted; and, in addition, thanks to technology the washing machine is able to recognize the fabric it is washing and suggests what type of program is needed to wash it, “so that it uses less energy to do it.”

Paradigm shift

In the same line, Cesare Trippella, Head of Leaf UE de Philip Morris International, emphasizes the strategic nature of sustainability. The manager highlighted the paradigm shift the company faced a decade ago, betting on innovation, with the aim of making more environmentally friendly products available to consumers.

Within this commitment to sustainability, the manager emphasizes the importance of investments that accelerate the green transition. In the case of Philip Morris, the company is dedicated to this goal more than 11,000 million euros in recent years, with a focus on all sides of the action, from the grower to the consumer.

“We are facing a change in general vision. We are going to a smoke-free world,” said Trippella.

The manager also agreed to emphasize the need for investments to address climate change in order to make a profit. “Economic logic is an important element. “Theory must be put into practice,” described. It also influenced the challenges caused by the scenario opened in recent years by the pandemic and the war in Ukraine.

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In this regard, the head of Philip Morris emphasizes the importance of companies that are able to present consumers with a sustainable commercial catalog at competitive prices. “We need to have products that scale so that more sustainable products are available to everyone,” he emphasized.

Trippella points to the important role of the consumer, who is especially aware of the commitment to sensitivity. “We do not sell an easy ​​product. In 10 minutes, it is possible to know where and how it is made,” he described.

The important role of financing

In the financial sector, banks and insurers have also included sustainability as a strategic element for many years.

Elena Carrera, Director of Sustainability at Sabadell, highlights the significant progress made by the entity in reducing its direct carbon footprint, although the determining factor for the bank is the emissions generated by all its activities.

“For banking, what is relevant is scope 3. In our case, it represents 2,500 times our carbon footprint” specified.

In this sense, the board of directors of Sabadell stated that the major challenge for banking is “changing our business model and the introduction of ESG factors in the activity of granting credit.”

Carrera shows that the transition to a green economy requires a change in product systems on a global level, a scenario in which the financial sector is key due to its role as a channel of economic credit.

“Our role is to finance companies with innovation processes.

The executive insists that sustainability will be configured as an ecosystem where all actors must move in the same direction. Consumers – he explained – continue to demand products and services at “very competitive” prices. To do this, companies need to make investments and regulators need to establish policies that facilitate this. Banks, ultimately, will have to finance this transition.

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Second life of wrecked cars

One of the initiatives through which Mapfre has channeled its commitment to sustainability is CESVIrecambios, integrated with CESVIMAP, the Mapfre Road Safety and Experimentation Center, the insurer’s R&D center.

The company is dedicated to offering scrap and second-hand parts. The aim is to give a second life to broken down vehicles.

“The car business is very relevant for Mapfre. In this sense, for more than 20 years we have considered how to take advantage of the share of vehicles affected by a general accident,” he explained. José María Cancer, general director of CESVIMAP.

Through the activity of this company, the insurer was able to use more than 50,000 cars back. “1.2 million pieces were returned to the market, which represents a significant reduction in emissions,” explained Cancer.

The manager also highlighted the progress given by places like Europe to the circular economy, with the establishment, for example, of certain percentages of second-hand parts.

Taking advantage of this opportunity, as well as the guarantee and tracking of products, 40% of the business of CESVIrecambios It is done via the internet to countries other than Spain.

Cancer explained that the company puts a magnifying glass on the electric batteries. The goal is to show that “electric cars can have a second life cycle.”

The manager assessed that the group’s commitment to the circular economy and the investment in CESVIrecambios are very relevant, not only considering productivity, but also “profit for society as a whole.”

The company provides training courses in countries such as Spain or Brazil. For example, crane service companies are mandated to collect all parts dislodged in accidents for reuse.

Nation World News Desk
Nation World News Desk
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