Paper Example on Circular Economy

Description of Organization

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Atos is a European IT services corporation. The main headquarters of the company are located in France. However, it has several branches throughout the whole world. It has a total of 100,000 workers (Atos, 2013). Atos mostly deals with hi-tech transactional services, offers cyber security services, large data sets analyzed computationally to show trends and interactions, cloud data, the integration of real-time enterprise communication services, computer security and IT security. Other than the IT department, Atos also has several brands such as Atos World grid, Atos Consulting and Canopy among others (Atos, 2013).

The Company was established in 1997 when 2 French IT companies merged together. The company later merged with Origin B.V and became Atos Origin. In July 2011, the Company had acquired Siemens IT solutions and Services and KPMG Consulting firm (Atos, 2012). Atos activities in UAE are categorized into 4 major divisions (Atos, 2013). The first one is Infrastructure and Data Management (this mostly entails unified communications and the management of data centres). The second one is global connection through e-commerce payment systems and point of sale services. Thirdly, it specializes in big data and cyber security and the protection of computer systems from hackers, malware attacks, destruction of hardware and any other computer related incidences. The fourth category is business applications and platform solutions (Atos, 2012).

Atos has a wide client base comprised of International blue chips. These are distributed across all industry sectors. It provides services for all companies that need business and platform solutions, big data, enforcement of their computer systems, e-payments services, cloud services and management of data (Atos, 2012).

Theoretical Aspects

Concepts of the circular economy

The design of a circular economy is that it is regenerative and restorative by nature. The main aim of circular economy is to ensure that manufactured products, together with the components and materials that have been used in the production process are maintained at their highest utility and value throughout the production period (Vanner et al. 2014). The basis of circular economy is that it differentiates between the biological and technical phases. In short, a circular economy is a positive unending development cycle which ensures that natural capital is maintained and its preservation optimal. It increases the yields from the resources used and at the same time, reduces the risks associated with the system through the management of finite stocks and flows that are renewable in nature (Van Weelden et al. 2016). A circular economy works irrespective of whether the system is small scale or large scale. Circular economy aims at ensuring that the level of waste is little and the adverse repercussions of the waste products are little. The circular economy model develops economic, social and natural capital through building on a transition to sources of energy that are clean and renewable. The guiding principles of a circular economy are (Accenture, 2014):

The preservation and enhancement of natural capital through the control of finite stocks and creating a balance between the flows of renewable sources of energy.

The optimization of the yields generated by resources through the circulation of goods, materials and proponents being used at their greatest utility in their technical and biological cycles.

Creation of system effectiveness through phasing out and eliminating all the adverse externalities.

Characteristics of the circular economy

There are several characteristics of a circular economy. Some of these characteristics are discussed below:

Design out waste: Waste is virtually eliminated when the technical and biological proponents of goods are designed in such a manner that they fit aptly within the biological and technical phases of the material (Hepbum, 2012). When talking about the biological components of a product, these are not poisonous in nature and as such, they are composted. The design of technical components, such as alloys, is in such a way that they can be used again while applying little energy and still retaining the high quality of these materials (Byrne, 2007).

Diversity: In the world we are currently living in, aspects such as versatility and modularity are important. Diverse systems which contain many connections and several scales can withstand external shocks compared to systems which have been designed for efficiency (Collis & Montgomery, 2008). This is achieved through maximization of utility.

Working towards energy from renewable sources: It is imperative that the main aim for all systems be to adopt renewable sources of energy, achieved through the lowered threshold levels of energy made possible by a circular economy which is restorative and regenerative in nature (Corbett & Klassen, 2006). A circular economy uses more of solar, wind, hydro-electric power and geothermal sources of energy which are renewable and clean-rather than using fossil fuels and other pollutant sources of energy (Soler et al. 2015).

Think in systems: It is important to comprehend the manner through which parts of a system influence one another and the relationship that exists among all these different parts forming the entire system. All the components are considered with respect to their environmental and social contexts (Subbaby, 2006). Even though a machine is a system as well, it has several limitations. For one, it is not widely bounded. It is impossible to manage these systems in a conventional sense and additionally, they also require flexibility and are not easily adaptable to the change in circumstances (Ellen, 2015a).

Think in cascades: When it comes to biological components, value creation is achieved through the extraction of additional value in components and proponents by cascading them in other applications (Ellen, 2015c).

Drivers of the circular economy

Drivers of circular economy can be categorized into 4 main categories. These are: saving of costs, compliance with the set regulations, creation and development of robust models of businesses and new market opportunities. There are several changes if a robust business model. Companies will be able to deal with fluctuating prices and any other market shocks. Through the use of untouched raw materials and tapping into new companies, it becomes easier to create long term resilience (Vanner et al. 2014). The companies can therefore withstand any market supply and demand shocks or the constant changes in the prices of raw materials. In addition to that, companies are able to save on expenses and costs through the use of resources in a more efficient and effective way. In a circular economy, secondary materials are used more and this results in lower prices of feedstock (WRAP, 2012). A circular economy also enables firms to have access into diverse consumer segments and thus increase the streams of cash. Profits and revenues are increased through getting into untapped markets and the sale of innovative commodities. The last key driver, as mentioned before, is compliance and adherence to regulatory changes (Ellen, 2015c). There are now stricter laws and companies are being forced to adopt green approaches which are environmentally friendly and low pollution levels.

Importance of circular economy

A circular economy has several advantages and benefits. A circular economy ensures that the management of resources is in an effective and efficient manner. The optimum use of resources helps in reducing costs and expenses, as such, the operational expenditure of a firm are reduced (Ghisellini et al. 2016). A circular economy makes it possible to hedge and protect the company against costly and fluctuating products and goods in the market place, this, therefore, reduces risks. In addition to that, a circular economy promotes the efficient disposal of materials while making businesses pay more attention to the needs and wants of their customers at an enhanced granular level. The main advantage of this is that it generates a better understanding of the customers, the producers and manufactures are in a better position when it comes to shaping value propositions (Ellen, 2013b).

A circular economy results in waste reduction, reduces the dependence on the importation of raw materials, lowers environment degradation, saving of costs, creation of new job opportunities, advocates for the use of clean and renewable sources of energy, lowers the use of raw materials and the consumption of energy, reduction in emissions and promotes the maintenance of the use of goods and their respective materials while retaining their value (Business, 2001).

Economic, social and environmental benefits

A circular economy has economic, social and environmental benefits. Some of the economic benefits of circular economy include;

Enhances the growth of economy: This is achieved through efficient use of resources. In addition to that, because of new circular activities, the companies create other sources of revenue for the business (DEFRA, 2015). A circular economy makes it possible to produce products cheaply, derives more functionality from the raw materials used in production process, increases labor valuation and increases the income and expenditure of individuals and the society at large. Consequently, this leads to a greater gross domestic product.

Saving of resources: It is possible to save lot of resources through a circular economy approach. The global population is increasing daily and the birth rates are on the rise. Resources are becoming scarce and it is, therefore, important to conserve them or use them optimally (EMF, 2015). A circular economy results in less wastage of resources. A lot of material is saved and as such, costs are saved as well.

Increases employment opportunities: A circular economy creates more job opportunities because of the following factors; there will be a rise in spending because of reduced prices of products, the rise of labor-intensive and high quality recycling services and the rise and growth of new businesses due to inventions and innovations and the creation of newer business models (Wijkman & Skanberg, 2015).

Promotes and enhances innovation: Innovation is enhanced since a circular economy promotes the seeking of innovative solutions to deal with problems that are being faced (Picard, 2010). Through the use of circular chains instead of linear value chains, the efficiency of the whole system is increased thus leading to better insights and more sustainable developments.

Some of the environmental benefits of a circular economy include; Improves the ecosystem and reduces the over exploitation of land and environment that is being experienced now. A circular economy also reduces the emissions of gases, lowers negative and adverse externalities, optimum use of raw materials and increases land productivity (Fischer et al. 2011).

Reduced emissions: Through the adoption of a circular economy, greenhouse gas emissions are significantly reduced. Through the recycling of products and dematerialization, the amounts of substances which pollute the environment are significantly reduced. A circular economy also promotes the use of materials which are not poisonous or toxic in nature and consume less energy (Corbett & Klassen, 2006). Rather than using fossil fuels which cause pollution, a circular economy advocates for the use of sources of energy which are renewable. All residual products, be they in form of gasses or liquid forms, are they are incorporated and integrated into the reuse.

Reduced adverse side effects: Through the adoption of a circular economy, wastage is minimized, emission of toxic gases is lowered, negative externalities are dealt with, and environmental conser...