The benefits of the circular economy

The economy of the 21st century is digital. In every sector, activities now include digital, computer, systems and other electronic equipment. To accompany this digital, electronic and IT revolution, companies must equip themselves with: computers, telephones, networks, servers, electrical equipment. However, the impact of digital technologies on the environment is far from neutral: the scarcity of raw materials, energy needs and waste production are issues that need to be resolved.  How can we reduce these environmental impacts and limit the waste of our natural resources? The concept of the circular economy is a promising alternative that can meet these challenges.

What is the circular economy ?

Since the industrial revolution, our societies have operated on the model of the linear economy, which consists of “extracting, manufacturing, consuming, throwing away”. However, this model no longer allows us to apprehend a reasonable future. Despite certain efforts, particularly in terms of recycling, the quantity of waste is constantly increasing. Natural resources are being depleted and this economic system has serious consequences for the environment. For example, waste computer hardware represents a major risk to the environment. As electrical components are not biodegradable, they are toxic waste. Once released into nature, they will remain on the ground without being decomposed and absorbed by the ecosystem. The disposal of computer equipment at the end of its life is becoming a worrying societal and environmental issue.  All the more so as technological progress is rapidly rendering this equipment obsolete. Appearing in the 1970s, the circular economy is an economic concept that is part of sustainable development.

The aim is to build economic growth that is not based on the depletion of natural resources, but on the rational use of materials and energy.  The circular economy favours the use of renewable energies and recycling, it is an ecological and economic model that is meant to be virtuous. This model integrates the life cycle of the product and a reasoned management of resources.

Now framed by official regulations throughout the world, the concept of the circular economy represents an essential lever Leaver? in the advent of a more sustainable and responsible economy.

Towards a new emerging economy: the economy of use and functionality

The digital transformation and the speed of technological change require companies to renew their equipment more and more frequently. The impact of the circular economy requires them to adapt to this new economy. This challenge is changing our economy from an economy of ownership to one of use and functionality.

The economy of functionality is an alternative economy model. The objective is to replace the sale of a product with the sale of a service that fulfils the same functions as if the product had been purchased. Companies no longer sell goods but services such as renting. This model makes it possible to detach oneself from the purchasing process, as well as from all related constraints such as maintenance, storage, repair or the end of the product’s life. For example, the use of computer equipment is often accompanied by a maintenance service, which is essential for it to continue to function properly

As part of the circular economy, this business model allows more economic value to be created while consuming far fewer resources. The result is not only environmental, but also societal and financial benefits.

The circular economy encourages new ways of designing, producing and consuming. It encourages reuse, recycling of components, extension of the useful life of products and the use rather than ownership of goods.

Leasing: lever of the circular economy

Today, a new economic and societal reality is emerging that is changing the relationship to property. The economy of use is adapting perfectly to the needs of consumers and businesses. They are no longer looking for a product, but rather a solution. Among these solutions, one of the most effective is undoubtedly financial leasing. It consists of leasing the use of a good for a long period of time.

The advantages of this system are numerous. It allows companies to benefit from the latest technological innovations, to avoid having to manage the purchase and resale of equipment, to control their budget, to optimise their cash flow and sometimes to benefit from tax advantages. This method of financing also makes it possible to acquire equipment that cannot be purchased immediately.

As part of a sustainable development approach and aiming to maximise the reuse of products based on repair and reintroduction to the market, leasing has become a lever in the circular economy.

The objective

The main objective of leasing, in favour of the circular economy, is that the financial partner has an interest in developing the quality, service life and recyclability of its products from a commercial point of view. In the case of leasing, the leased equipment belongs to the financial partner. The financial partner takes back the leased assets at the end of their useful life and ensures optimal use of the equipment by leasing it to one or more other users or by reselling it on the second-hand market. The financial partner will only put the assets out of use if no second life is possible. In this case, the financial partner will ensure environmentally friendly and responsible recycling.

As a flexible financing instrument, leasing therefore encourages business innovation in favour of the circular economy.

Aiming for growth without depleting the planet’s resources is the goal of the circular economy. Successive societal, economic and ecological revolutions have driven the world’s economies to transform themselves. Businesses are now aware of this. They are tending to become more responsible in order to have a real impact on tomorrow’s world. FinGo Solutions presents itself as a player in these economic and societal evolutions by accompanying its customers towards financing solutions that favour usage and therefore, by definition, the circular economy.

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At FinGO Solutions, we take the time to analyze your business needs. We work with you to develop a customized financing program. Let’s get started today! Simply call +41 22 994 77 16  16 to speak to a specialist or request a quote right here !

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