Interview with CIRCULAR IQ, Green Alley Award Finalist 2018
The digitalization is a huge opportunity for circular economy businesses – a fact that led to the foundation of a startup based in the Netherlands that is now a finalist of this year’s Green Alley Award, Europe’s first startup prize for the circular economy. Anyone who wants to make sustainable purchasing decisions must have detailed information on the circularity of products. This is ensured by the software “Circular IQ”. It collects and aggregates data across the entire supply chain, from the source of the materials to the supplier contracts. This enables companies to monitor and optimize the circularity of their products and creates transparency for customers and buyers. Read here, how exactly the technology works and what kind of benefits companies can get out of it.
# The digital circular economy is a complex subject. Could you please describe your technology and how it works in simple words for someone outside the world of IT?
We at Circular IQ believe that in a circular economy reliable information about the composition and reuse-potential for products and all the materials in them is crucial. Only if we have this information, we can optimize what we already have, cycle more and better and stop wasting resources.
We also believe that digitization and leveraging purchasing power for good are key levers for creating a circular economy. Our startup has developed an accounting and collaboration software for collecting, enriching and unlocking actual and real time sustainability data. This data is collected from multiple sources including algorithms to interpret results. Using our software helps to pinpoint where value is lost, thus helps locate, avoid and mitigate waste. Reliable and supplier specific data on products and their composition is needed to optimize what is already there and improve recycling rates and efficiencies. Therefore, we provide transparency on what’s extracted and provide an infrastructure to use purchasing power to steer away from extraction and promote recycled and rapidly renewable materials.
# Your software offers a measure to assess the circularity of products, from raw material origins to overall environmental impacts. Where and how do you get all the data on the products?
I wouldn’t say that we offer a measure necessarily. We support our customers in embedding their Circular Economy Goals in their criteria for procurement, supplier selection and monitoring by making it transparent to what extent suppliers, products and materials contribute to these goals. We offer software for accounting and collaboration that helps our customers and their partners in the value chain work together to collect relevant data and enrich this data and make it possible to objectively compare and monitor circularity aspects.
We only use criteria from existing standards and programs that are widely recognized and accepted in the market-place and provide each supplier with their own individual account, so they can collaborate safely and without compromising their competitive advantage or disclosing their supply chain with their customer. At the same time, they own the data they upload, and they are in control of who they share this data with, while they make themselves familiar with the benefits of digitizing their sustainability data-management in terms of time-savings and are incentivized to also invite their suppliers to collaborate, creating a network effect and unlocking potential for collaborative advantages. Apart from the fact that the procurement decision depends on delivering the information asked for, these are very powerful incentives that are embedded in our software.
# Your main target group are procurement managers. In public administrations they might have regulations that oblige them to buy sustainably. But how can you ensure that all other purchasers also decide for the most circular and most sustainable product?
The good thing here is that circular procurement – when executed well – saves over 10% in direct costs. Moreover, there are some added benefits of avoiding waste (which saves additional costs) and preferring furniture that is designed for disassembly and preferably in a modular way, making it easier to increase the lifetime and save costs on maintenance as well. More benefits include lower carbon emissions and the guarantee of safe materials in these products which are even designed for reuse, so that they remain available for future generations.
It all becomes even more interesting when upgrading and extending the life of existing furniture is included in the scope of the circular procurement project. Apart from even bigger savings and positive impact on the environment, this combination helps increase awareness on the circular economy topic within the organization and provides excellent case for story-telling and engaging with customers and suppliers on the sustainability topic using tangible and concrete examples.
# What are the biggest challenges for your go-to-market strategy?
The fact that digitization in general is not high on the agenda of most governments and businesses is challenging. This, combined with the fact that most procurement officials have yet to discover that they can save costs, extend the life of products and achieve their sustainability goals by collecting reliable information about the composition and materials inside the products’ they buy, are our biggest challenges I guess.
Right now, we work for frontrunners, but it’s our ambition to serve partners in every value chain, but we are starting with Office Furniture. In this market our MVP is used a lot by local, regional and even the national government, when tendering circular office furniture. Because of the growing demand 2 of the European Top-5 furniture manufacturers are now using our software. A roll-out in their supply chains will help us uncover a new group of users further upstream in the value chain. This will create opportunities for further improvements and accelerate growth throughout the furniture industries’ value chains.
# In one sentence: What does circular economy mean to you?
Circular Economy means focussing on being a better company instead of spinning a better story. It’s about continuous improvement, prioritizing impact over growth and continuous collaboration with your value chain.
Find the interviews with the other finalists of the Green Alley Award 2018 here: