ING Group has just outed a report that suggests American companies could add $4.5 trillion into the country's economy within 11 years through the help of a "circular" model.
The circular economic model recommended by ING effectively reduces the use of raw materials and instead leverages on recycled materials that will allow U.S. businesses to lessen overall waste.
According to Yahoo Finance, Head of ING's Sustainable Finance Americas, Anne van Riel said of the model, "Traditional business models are typically geared towards a 'take, make, dispose' mentality. A circular business model looks to retain value from products parts and materials."
Riel added that a lot of sectors, including telecoms, automotive companies, food and agriculture, consumer electronics, and healthcare providers, are considering a more sustainable operations strategy that point to circular thinking.
One of the companies ING recognized for using the circular method is Heineken. According to the "Opportunity and Disruption: How Circular Thinking Could Change US Business Models" report, some of Heineken breweries achieved zero waste. Instead of disposing bottles, the company was able to reuse metal, glass, and plastic.
Furthermore, Heineken sold organic waste to animal feed processing companies. These organic wastes include barley husks and spent grains.
Another company mentioned in ING's report is Johnson Controls. The Wisconsin-based company is known to be the world's largest recycler and manufacturer of batteries. Company Director of Public Policy and Global Sustainability, Liz Tate said recycled lead and plastic are the main components of 80 percent of lead acid batteries produced by Johnson.
300 U.S. executives were surveyed for the report. 62 percent of the American chiefs said they are planning to use the circular economic method in their operations. 16 percent have already started utilizing the strategy.
The report also discovered that sustainability largely improved in the United States in 2018. According to CISION PR Newswire, American brands are further looking to capitalize on sustainability this year to increase their companies' value.
Despite optimism about the circular economic model, the ING report found that most U.S. firms have their eyes fixed on waste reduction instead of revamping their business models.
According to Riel, the purpose of the circular thinking model is to first create then retain value in business processes. This is, in a way, different from common waste reduction strategies.
ING's report indicated that circular models seek to improve production efficiency. American firms considering this system are encouraged to revamp the way they offer products or services.
