The Circular Economy
The Circular Economy brings together the key aspects of sustainable development by creating solutions for environmental protection and economic gains. The discipline of asset management has until now had limited engagement with circular economic philosophy.
The IAM’s Circular Economy program will be developing guidelines on how to incorporate circular economic value within and across asset lifecycles. In particular, the program will explore what the circular economy is in an asset management context and how to establish and measure circular economic value streams.
These guidelines will include how to compare the value of circular economic interventions and trade-offs in asset management decisions and will explore options for auditing and assuring circular economic activity around multiple asset-life cycles. Importantly, the program will also look to stimulate the demand for circular economic innovation in an asset management context.
The IAM’s position on:
‘Circular Economy’ and Asset Management
Organizations that plan to protect their future should include sustainability aims within their strategic goals.
An Asset Management approach that balances costs, opportunities, and risks against the desired performance of assets is critical to achieving these goals.
The 'Circular Economy’
The Circular Economy is a systems solutions framework that builds upon systems thinking approaches to tackle global substantiality challenges such as climate change, biodiversity loss, waste, pollution, and regeneration. Businesses taking steps to become more viable by moving away from the conventional practice of ‘take-make-waste’ should invest in more circular economic ways of working.
The Institute of Asset Management considers the adoption of circular economic philosophies and practices as a key enabler for organizations to move towards sustainable business practices.
Asset Management is the art and science of making decisions to optimize the delivery of value against established organizational objectives. It is a key enabler and platform to inform business strategy for 'designing in' strategic asset value, reducing whole-life costs, and reducing the whole-life environmental impact of key assets. It is a means to invest in, plan and maintain the value of assets within a circular economic context. By using Asset Management principles to adapt their business models, organizations can move towards closed-loop systems that optimize the performance of assets whilst extending asset life.
Carl Waring, Frazer-Nash Principal Consultant noted
“Adopting a Circular Economic approach to your business and products brings together the key aspects of sustainable development and economic gains. Its adoption is a key partner to any Asset Management Strategic Asset Management Plan (SAMP).
It is effective across multiple asset lifecycles, eliminating waste and pollution while circulating materials and products at their highest value and regenerating nature. To enable this shift in business policy, there is a need for the emergence of new types of strategy, operating models, products and services, all of which will demand a clear dependency on Asset Management capabilities.”
Further action from the IAM
Chaired by Carl Waring from Frazer-Nash Consultancy, The Institute of Asset Management now plan to develop guidance in how to incorporate circular economic value within and across asset lifecycles.
This will include the development of a white paper setting out the principles and a framework so asset managers can think and work in circular economic terms.
If you would like to know more or wish to work with us, please do get in touch. Office@theIAM.org