With Earth Overshoot Day approaching, the UK government has been urged to support circular economy businesses. The landmark date, Wednesday 2 August 2023, marks the time when humanity’s demands on nature exceeded the planet’s biocapacity for that year.
A report by the Green Alliance has found that UK government policy is one of the factors holding back innovative companies from scaling up the circular economy and preventing business models from being more widely adopted.
Steven Taibe, CEO of the Global Footprint Network, said: “The biggest risk, aside from ecological overload itself, is complacency about this crisis. Entities acting now are not only protecting the environment, but ensuring that their economies and Residents’ wellbeing is future-oriented.”
Economy
The Green Alliance spoke to 10 companies that are reducing carbon emissions and reducing waste, and found that a lack of understanding and imagination among policymakers and entrenched consumer behavior are also barriers to growth.
A circular economy aims to preserve the highest use value of materials and products for as long as possible through better design as well as reuse, repair, remanufacture and recycling.
Techbuyer is a company that buys, decommissions, refurbishes, and sells used commercial technology. The tax rules mean businesses and their consumers pay a disproportionate amount of VAT on resold goods, which are taxed multiple times, the company said.
It also said that despite a 24 per cent increase in turnover and diversion of 1 million kilograms of e-waste from landfill in 2022, the market was constrained by attitudes towards refurbished devices, including perceptions of lower quality or reliability poor.
“From an economic point of view, the business case is clear because you’re essentially turning waste into profit,” said group sustainability director Richard Kenny.
convenient
Meanwhile, children’s clothing rental company Little Loop claims to have avoided 120 tonnes of carbon dioxide emissions since 2019, saved five million liters of water and saved parents hundreds of pounds a year.
But the company says its growth has been hampered by entrenched new buying habits and competition from cheap and often lower-quality goods.
The report also said companies that lease goods are often disadvantaged compared with competitors who sell them because they hold too many assets to qualify for certain tax breaks.
“There’s not enough patient capital in the market, not enough people willing to invest in a business that won’t become a unicorn overnight,” said founder Charlotte Morley.
Meanwhile, resale companies such as Bambino Mio, which sells reusable diapers, face problems including poor collection, cleaning and redistribution cycle logistics, high upfront costs and consumer concerns about convenience and cultural inertia.
