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2016

XLRI,JAMSEDHPUR
Introduction to
Sustainable Development
& Corporate
Sustainability

DERIVING STRATEGIC
ADVANTAGE THROUGH
CIRCULAR ECONOMY AND
INDUSTRIAL ECOLOGY

Anshuman Parida

(G16013)

Anuj Poonia

(G16014)

Arijit Pal

(G16015)

Ashish Singhania

(G16017)

Azhar Jalal Haider

(G16018)

Bimala Nandan Mishra(G16019)

Industrial ecology aims to equip the industries in increasing their resource utilization and thereby
enhance the value proposition of their products at reduced costs of production. The concepts of
design for the environment, material cycling and closed loop production emphasising on flow of
material and energy among various industries forms the crux of industrial ecology. Adopting design
for the environment increases the environmental performance of the product as design changes
allows for efficient recycling of the product. Identifying reuse of raw materials saves the production
costs as well as leads o minimum waste generation. Product design changes driven by innovation
contributes significantly is reducing the waste of energy and even in the expenditure for disposing
hazardous by products. Simple actions such as reducing electricity consumption by use of efficient
lighting and heating can have significant impact on cost of production. Innovation combined with
drive for business benefits reduces cost even where things might seem possible to reduce.
Effective and innovative use of waste products can be used to produce new products or used to add
value to the existing product. When a firm reuses every possible waste product, costs are bound to
drop down it will also help it increase its loyal customer population. The cost of the waste produced
may be borne either by the producer or consumer .Even if it is borne by the consumer the producer
must strive to decrease these cost as it will lead to easy use of the product in less costs and more
integrated relationship.
Business need not necessarily be the source of solution but can definitely be a part of the solution by
having commerce without degrading the environment by use of resource efficient transportation
and renewable energy. Industrial Ecology advocates moving away from linear model towards closed
loop model. It provides us with a path to achieve sustainable industrial system. Lost in the number
crunching of GDP the organizations have forgotten the long term effect of environmental
degradation and natural resource exploitation. The design of ecosystems urges the redesign of
industrial system to perform better within the limitations of the biosphere. More integration
amongst companies which will facilitate the waste products of one company to be used as raw
material for another company. Networks of companies should be formed and continuous usage of
by-products of one process should be used for another company. The management of material and
energy plays a great role in this process. This will not only generate additional revenue but also cost
savings.
The Kalundborg eco industrial park situated in Denmark is one of the best examples of
implementation of industrial ecology and resource optimization between various industries. There
material and energy in form of by products is exchanged between various industries inside the park
such that net wastage is minimized. The entire network consists of a thermal power plant, one oil
refinery a pharmaceutical company, wallboard manufacturer and soil remediation company.
The wastewater and cooling water from the refinery is supplied to the power plant where it is
utilized by the boilers resulting in production of steam and electricity. The gypsum produced in the
power plant is used a raw material of the wallboard manufacturer. The extra heat from the plant is
also used for heating of nearby residential complexes. The pharmaceutical company as well as a fish
farm also make use of the heated water produced by the power plant. Along with resource sharing
other some of the by products such as the flyash from the power plan is used as a road construction
material. The by-products of the pharmaceutical company i.e. the biomass from the biogenetic

fermentation processes is used by the famers in farming. The efficient water sharing strategy
adopted ensures availability for all even though Kalundborg faces ground water deficit.

Industrial Symbiosis in Kalundborg, Denmark A Quantitative Assessment of Economic and Environmental Aspects-Noel
brings Jacobsen

The creation of eco parks provides great strategic competitiveness to the firms as they increase their
efficiency, reduce production cost and also reduce their contribution to the degradation of the
natural resources
Xerox has emerged as a pioneer in implementation of design for the environment. Encouraging
practice of Industrial ecology is successfully implemented and being practiced in Xerox. They give lot
of importance in recycling of waste, reducing waste generation and reusing waste products.
Interesting part is that they even have taken special attention in whether vendors also abide by
standard environmental regulations. Apart from that, for reducing waste, they have started lesser
use of cartridges and using newer ink technology. Till date they have reduced carbon footprint by
42% and energy consumption by 31%.
Products manufactured by Xerox contain at least a few percentage of recycled material. From the
beginning of a product manufacturing to the delivery Xerox endeavours to contribute to the
environment .Rational use of packaging, reuse of packages, and reuse of toner bottles contribute tpo
the preservation of the natural resources in various measures.
The circular economy concept has its origins in EID, which is based on the idea that a healthy
economy and environmental health can coexist. The Chinese people have chosen to use the term
circular economy as the working language of EID. The Chinese circular economy concept comes
originally from Germany and Japan, where there was a desire to form a more closed loop society

Areas of R & D application include fuel cells, clean and renewable energy, water and energy saving
technologies, eco-industrial park planning, process integration, green building, reverse logistics,
waste minimization, eco-design and others resource use. It should also be noted that Chinas
industrial parks have dual functions as both production and residential areas. A typical Chinese
industrial park has an industrial production area, a scientific research area, a residential area and a
business and service area, which is different from the North
American model where industrial parks are predominantly manufacturing. The first circle of circular
economy is called the micro-level that covers the micro level industries which form the lowest most
level of the pyramid, the second level is called meso-level ,where it consists of small scale industries
forming the middle segment of the pyramid. The third circle of the circular economy concept is at
the social level (macro-level). Typical activities include the development of eco-cities and ecoprovinces. City governments, including Shanghai, Hangzhou, Yangzhou and Guiyang, and the
provincial governments of Liaoning, Hainan, Jiangsu and Jilin have established their plans for
constructing an eco-city or an eco-province Different from the first two levels, this level attends to
both production and consumption concerns. From a production point of view, the circular economy
concept encourages the establishment of regional eco-industrial networks, and seeks to create a
circular society by optimising material use eco-efficiency. Scavenger companies, which perform
waste recovery, reuse, repair and remanufacturing functions, and decomposer companies, which
enable recycling by breaking down complex wastes into reusable organic, metal, plastic and other
components, are being promoted by local governments. Preferential industrial recruitment and
financial policies (such as low rents for land and low interest loans) are being drafted in order to
facilitate the operations of such companies. From a consumption viewpoint, the circular economy
concept encourages the creation of a conservation-oriented society, seeking to reduce both total
consumption and waste production.
Now let us look the implementation of Circular Economy at specific problems in three different
countries and their approaches towards achieving sustainable development.

China
China is the worlds second largest Economy in terms nominal GDP. Chinas socialist market
economy structure is dominated by the state-owned sectors and support an open-market economy.
Its economy is export driven where both manufacturing and service sector contribute a major
portion (45% each). Over the past few decades, Chinas focused extensively on industrial and
infrastructural development that resulted in wastage of energy and inappropriate allocation of
resources. Also the focus shift of Chinese government from labour and commodity intensive
industries to hi tech industries resulted in rural depopulation and unsustainable agricultural
practices.
China implemented the Circular Economy (CE) 3R measures (Recover, Reuse, and Recycle) to tackle
these specific problems. The concepts such as eco design, clean production, eco industrial park in
the production area, green purchase and consumption in the consumption area and product recycle,
waste trade market and Venous industrial park are being implemented. Also the township building
concepts, where we group 7-10 villages with different waste management systems, are being
implemented so as to improve cooperation and resource management between the villages.

Germany
Germany is the worlds fourth largest Economy in terms nominal GDP and the driving force behind
resource efficiency in Europe. It has a social market economic structure which supports a free
market system alongside social policies. It is an export driven economy with machinery, household
equipment, vehicles and chemicals being the major exports. In the 1970s Germany was facing a
major waste management issue. In 1972, each village and city in the country had its own waste
dump. The county faced the humongous task of reducing the total number of dump sites form initial
number of 50000. By 2000, Germany has reduced the waste dump count to 2000 which was further
bought down to 160 in 2014. In the process of achieving this Germany was able to create 250000
employment opportunities by establishing the in Germanys CE and waste economy industry.
Germanys yearly business volume through CE exceeded 50 billion EUR in 2010.

Switzerland
Switzerland is the worlds 19th largest Economy in terms nominal GDP. Switzerlands economy is
based on international trade and banking. It is an export driven economy with machinery,
household equipment, vehicles and chemicals being the major exports. It is an export driven
economy with chemicals and electrical and mechanical engineering products. The problem faced by
the Switzerland was the pollution caused by disposed waste. It adopted the Circular Economy (CE)
method of avoidance, reduction and environmentally responsible Disposal and the Polluter Pays
principle. Polluter Pays resulted in widespread separate collection of waste, including glass,
aluminium and paper. Overall the Recycling rate increased 12 times since 1970, the volume of
municipal waste has not decreased since 1990.
Though all these methods these counties have been able to significantly reduce their wastages. But
looking from a wider perspective CE requires looking at the life cycle of each product produced by
these economies. It means that when looking at the larger perspective, these countries need to
develop strategies to apply CE to the exported products as well.

Conclusion
The concept of circular economy has already been implemented in some of the worlds largest
economies since a long time. These countries have started framing policies, which support the basic
ideas of circular economy and this has helped them in building a sustainable industrial ecology,
where the interdependence among the industries results in minimum wastage of products, and
thereby boost the countrys growth. But, other developing nations like India, South Africa, brazil etc
need to implement ideas based on these concepts, where the maximum utilization of resources can
take place. The developing nations are growing at a rapid pace, using the resources much faster,
than they can be regenerated, that puts excessive strain on the natural resources. The answer lies in
rethinking and redesigning our products and their packaging so that once their lifetime is over, they
can safely return to the soil and easily degrade, without causing any damage to the environment,
while promoting further growth. So we need to put in more effort in capacity building, so that our
our growth can be sustained by the natural resources, we are gifted with.