Circular logic

THEME: Circular Economy, Sustainability

Get in the loop to cut out business waste, boost supply-chain efficiency

Circular supply chains are the way of the future — and a source of confusion and struggle for many Manitoba businesses, according to a new report.

“(Circularity is) critical for long-term success for… businesses,” said Rick Reid, executive director of Supply Chain Manitoba.

However, 54 per cent of respondents to a Supply Chain Manitoba study indicated a low level of awareness and understanding of circular economies.

The 47-page report, which the province funded, highlights a lack of provincial legislation referencing circular economies and a lack of formal education on the concept in post-secondary schools.

“Circular economy is… about a change in philosophy,” Reid said.

A typical supply chain is linear: raw materials are processed, used and then often tossed in a landfill.

Circular economies see materials being reused, either within a closed loop or elsewhere.

“It’s about eliminating waste and pollution,” Reid said. “It’s about keeping products in use as long as possible.”

Businesses seemingly have intentions to change: more than 70 per cent of the 180 companies polled during Supply Chain Manitoba’s project said they planned to adopt practices in line with circular economy values in the near future.

A gap in information — about what a circular economy is and how to create one — is one of the major barriers businesses face, Reid said.

“When… you’re vague about what it is, it’s very hard for people to make plans or develop strategies to move forward,” he said.

Thirty-one per cent of survey respondents said they lacked the skills to move to a circular economy. Twenty-six per cent indicated uncertainty on how to begin.

“Right now, the focus for so many companies is just to make sure they have a reliable supply chain,” said Loren Remillard, president of the Winnipeg Chamber of Commerce.

Circular economies were progressing pre-pandemic, Remillard said. Many plans took a backseat as companies fought supply-chain snarls and shipment backlogs on regular orders.

“Eventually we’re going to move past that, and I think you will see increasing importance being placed on sustainable supply-chain management,” Remillard said.

Keeping expenses low is top of mind for many businesses, both he and Reid noted.

“There’s a perceived cost premium that you’re paying to source sustainable supply-chain products and services,” Remillard said.

Most managers are familiar and comfortable with their supply chains, he added.

“There’s inherently a perceived risk of, ‘I’m going from what I know,’ to an area that maybe I don’t know as much,” Remillard said.

Supply Chain Manitoba’s report outlined a lack of Manitoban legislation referencing circular economies and circularity.

However, a number of regulations touch on similar principles, according to the document.

A lack of regulatory requirements and government incentive programs is one of the barriers identified in the new report.

A provincial spokesperson for Economic Development Minister Cliff Cullen did not answer when asked if there are plans for new legislation or incentives tackling circularity.

“Through our Sector Council program, Manitoba will continue to work with industry to ensure our workforce have the skills necessary to advance a more sustainable economy,” the spokesperson wrote in a statement.

They pointed to Manitoba’s Waste Reduction and Recycling Support Program, which helps fund composting facilities selling products made from waste.

More regulation is not needed, Remillard said — businesses are pressured to be more sustainable through their customers and employees.

“There’s no shortage of demands on companies to move in a more sustainable fashion,” he said.

More than half of Supply Chain Manitoba’s survey respondents said high costs prevent them from pursuing circular economies. Thirty-eight per cent cited a lack of financial support, and 31 per cent noted a shortage of capacity.

Supply Chain Manitoba offered 14 recommendations to promote circularity, including reviewing government regulations periodically, promoting awareness in all sectors of Manitoba’s economy and developing new assessment tools and resources.

The non-profit will create its own resources for businesses, Reid said.

“Businesses that embrace this will be much better positioned to weather whatever the new regulatory environment (internationally) looks like,” he said. “It’ll make them more competitive.”

Circularity is not a fad, said Dale Overton, CEO of Overton Environmental Enterprises.

His business processes potato scraps and starches, among other things, into compost sold to farmers and landscaping companies.

The scraps come roughly 400 metres from his West St. Paul facility, from Simplot and Roquette plants.

“I think that a lot of industries are embracing these kinds of changes,” Overton said. “It’s something that every single food-processing company should be looking at, pulling out materials that could have more value elsewhere than throwing them into the landfill.”

He estimates the compost program saves between 200 and 300 tonnes from entering the trash weekly.

The province contributed $250,000 to Supply Chain Manitoba’s study, Reid said. The project included a survey Probe Research conducted, policy scans and interviews.

By: Gabrielle Piché | [email protected]
Posted: Winnipeg Free Press | Tuesday, Oct. 11, 2022