Innovative Business Models and Technologies to Create Value in … · Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance

Circular AdvantageInnovative Business Models and Technologies to Create

Value in a World without Limits to Growth

Nobuko Asakai

Copyright © 2012 Accenture All Rights Reserved. Accenture Confidential Information.

Introduction to Accenture

Industry

Relevance

Leadership in

Sustainability

Proven

Business Case

Methodology

Proven

Governance

Structures

High Quality

Team

Industry

Alliances

Accenture serves 92 of the Fortune Global 100

and more than three quarters of the Fortune

Global 500

99 of our top 100 clients in fiscal year 2011, have

been clients for at least five years, and 92 have

been clients for at least 10 years

Establishment: 1989

Employees: Approximately 246,000 in more

than 120 countries

Committed to delivering innovation, Accenture

collaborates with its clients to help them become

high-performance businesses and governments. With

deep industry and business process expertise, broad

global resources and a proven track record,

Accenture can mobilize the right people, skills, and

technologies to help clients improve their

performance

Accenture (Global)

Clients

Copyright © 2014 Accenture All rights reserved. 3

Accenture Sustainability Services Projects – Driving Growth and

Innovation for Business and Smart Cities, Globally

4

“Compact, smart and

green man-made island”

Green field

Brown field

“Urban Community of

Madrid - Energy

Efficiency & Waste

Management ”

Madrid

“A showcase for best

practice sustainability

technologies”

“A global model for

sustainable urban

development”

“Building Energy

Efficiency Programme”

“City initiatives to meet

an ambitious carbon

reduction goal”

“Renewable energy &

Intellectual Property

creation”

“A creative digital city

driving Mexico’s

audiovisual creative

services industry”

“A new international

financial district in the

heart of the city”

“CO2 emissions

reduction through smart

energy systems and

behaviour”

“Champion the Smart

City model by

enhancing a

sustainable project”

“A model project of an

environmentally-minded

city in action”

“Multi-modal fare card

system for the region’s

public transit”

“Redevelopment of

industrial harbour land

for clean energy living”

London MalmoCity in Southeast

ChinaSongdo

Copenhagen

Ontario

Baerum, Norway

City in Mexico Amsterdam

Yokohama

Fujisawa

Kuala Lumpur

City in the Middle East

Sustainability

Incremental change or transformation?

Copyright © 2014 Accenture All rights reserved.


103 COUNTRIES1,000 CEOs 27 INDUSTRIES

UN Global Compact Accenture Study on

Sustainability 2013



Source: UN Global Compact-Accenture CEO Study 2013;

survey data based on 1,000 responses


9Copyright © 2014 Accenture All rights reserved.


Log plot of Resource use and Economic development (2010, 166 countries)1

The link between economic development and

resource use is strong

10

2 OECD Development Centre, Working Paper No. 285, The Emerging Middle Class in Developing Countries

Res

ou

rce

us

e

Economic development

1

10

100

10,000 100,000100 1,000

Tons/

Cap

GDP/Cap

Colombia

China Brazil

Bangladesh

Australia

Germany

Chile

Sweden

Niger India

1 SERI and Dittrich, M. (2014). Global Material Flow Database, World Bank (2014) GDP per capita in current US$ (outliers Mongolia & Bahamas removed)

2.5 billion new consumers to join the

middle class by 2030 (+100% vs. 2013)

!


0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

75

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Billion tonnes

Supply

Demand (business as usual)

Improved material

management

Unfortunately supply seem unlikely to catch

up with our growth aspirationsGlobal supply and demand for constrained resources to 2050

Sources: Accenture analysis, Global Footprint Network


0

10

20

30

40

50

60

70

80

90

100

110

120

130

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Price index, 2010=100

GDPEnergy Non-energy

1975-2000

+1% growth in GDP

-0.5% commodity prices

2000-2014

+1% growth in GDP

+1.5% commodity prices

The supply / demand imbalance is

bad news for businessGDP and commodity price development 1960-2014

Sources: Accenture analysis, The Conference Board, ‘Total Economy Database – Key Findings’,

January 2014, http://www.conference-board.org/data/economydatabase/, The World Bank, ‘World

Bank Commodity Price Data (The Pink Sheet)’, December 2014, indexmundi commodities

http://www.indexmundi.com/commodities


Wasted embedded values

Components, material

and energy not

recovered at disposal

$1.3tnElimination potential 2030

Wasted resources

Material and energy

that cannot be

continually regenerated

$1.7tn

Wasted capacity

Underutilized or unused

products and assets

$0.6tn

Wasted lifecycles

Premature end of

working life of products

$0.9tn

Growth potential to 2030 across four types of linear

economy wasteLet’s take a 4-dimensional view on

waste instead!

Accenture circular advantage program


Circular Economy – the emerging approach

Sell & Resell

Take back

Restore &

Re-process

Use & ReuseManufacture &

Remanufacture

Repurpose

Circular Value

ChainLinear Value

Chain

…to circular

Take

Make

Waste

From linear…

Full lifecycle revenuesReturn & recycling

Monetize waste: material managementReduce waste: waste management

Sell performanceSell volume

Manage resources in marketsManage resources in production

Decoupling – resource productivityResource efficiency

Framework

Key focus areas


Example companies studied

The ‘Circular Advantage’ program

15

5 business

models

10 enabling

technologies

5 capability

shifts

50 executive

interviews

120 case

studies


In our research we found five circular

economy business modelsBusiness models of the circular economy

Circular Supply-Chain

Recovery & Recycling

Product Life-Extension

Sharing Platform

Product as a Service

Source: Circular Economy book project


Success stories are becoming many

17

Impact

Source: Circular Economy book project 1 Estimated from company data

Circular

Supply-chain

Recovery &

Recycling

Product as a

Service

Product

Life-Extension

Sharing

Platform

Examples

Project Liberty plant opened with

$75m annual production value

Sustainable biofuels and

bio-based materials

$250m rev., 100% growth (2013)Leisure rental of unused

properties

$1bn in annual revenue from

byproduct recycling and reuse

Landfill-free manufacturing

facilities

13k lightings upgraded at 0 cost in

WDC, $2m per year value split

Lighting as a Service –

pay for lux

“Pay for power, not panels”

home energy systems$6bn market capitalisation

$3bn turnover1, 4000+ employees,

50% lower price, 60% less CO2

Remanufacturing of

industrial equipment

Circular Economy success stories

18Copyright © 2014 Accenture All rights reserved.


Three types of technologies are key

21

Digital

Enabling entirely new ways

to access and understand

product use-phase and aid

customers in use efficiency

Hybrid

Enabling moving physical

objects back and forth from

value chains with digital

services to drive down cost

Engineering

Enabling production and

supply of new types of

resources as well as new

product designs to use

them

Social

Mobile

M2M Communication

Cloud

Analytics

3D Printing

Advanced recycling tech

Trace and return systems

Modular design technology

Life & Material sciences

Circular economy enabling technologies

380m supporters for

$50 modular handset to

be released in 2015

$300m refurbished

equipment take back

and remarketing

$40bn taxi company

in 45 countries with

zero cars

Launching a share

anything platform

starting with cars


https://www.spotify.com/

https://www.spotify.com/

http://www.car2go.com/

http://www.car2go.com/

http://www.ecouterre.com/puma-unveils-incycle-line-of-cradle-to-cradle-certified-apparel-footwear/

http://www.ecouterre.com/puma-unveils-incycle-line-of-cradle-to-cradle-certified-apparel-footwear/


Three types of technologies are key

22

Digital

Enabling entirely new ways

to access and understand

product use-phase and aid

customers in use efficiency

Hybrid

Enabling moving physical

objects back and forth from

value chains with digital

services to drive down cost

Engineering

Enabling production and

supply of new types of

resources as well as new

product designs to use

them

Social

Mobile

M2M Communication

Cloud

Analytics

3D Printing

Advanced recycling tech

Trace and return systems

Modular design technology

Life & Material sciences

Circular economy enabling technologies


10-30% cheaper

material vs.

conventional

when scaled

+1m members, 20k

brands and 30% month

over month growth

$60m revenue 2013,

‘style genome’ sales,

1m shares per day

Processes

700t of used items

every day in more than

90 countries.


Leading adopters experiment with 5 new

business capabilities

23

2. Innovation &

product development

Design for many

lifecycles and users

4. Sales & product use

Excel in lifecycle customer

engagement

3. Sourcing and

manufacturing

Cascade resources

5. Return chains

Do opportunity driven

take-back

1. Strategy

Engage in circular

ecosystems


Circular economy capability shifts


Resource ‘cascades' can be used to get

started on identifying opportunities

ExtractionMaterial

processingProduction Assembly Sales Use DisposalCollection

Recycle & Upcycle

Remanufacture

Refurbish

Resell / Remarket

Repair

Reuse

Recover

Service

Upgrade

Co-use

Exchange

Repurpose

Circular

Supply-

Chain

Recovery &

RecyclingProduct Life-

Extension

Sharing

Platform

Product as a

Service

Thank you!

Questions?

Circular economy success cases

Circular economy success is broad and varied: Across all circular

business models, across industries, from start-ups to big

business


Circular

Supplies

Resource

Recovery

Product as a

Service

Product Life

Extension

Sharing

Platform

Enablers

Remanufacturing of

industrial equipment

Floow2-community for

the sharing of industrial

equipment

Engages people globally

to collect waste for up-

cycling and new products

Leasing of Jeans and

other fashion items,

including free repair

World leading tire

company offering “pay by

the mile” service

Automated machine

buying used electronics

for repair and resell

Packaging material from

agricultural waste and

mycelium

Sustainable biofuels and

bio-based materials

Start-ups Established companies

New carpets from old

carpets through DESSO

Refinity®.

Global rental of private

homes for travelers to

utilize unused space

Smart phone enabled

heating optimization of

homes to save energy

The C2C Institute offers

trainings, certifications and

licensing of C2C productsSource: Circular Economy book project

Documents

Innovative Business Models and Technologies to Create Value in … · Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance