1、RACES:RESOURCES AWARENESS AND CIRCULAR ECONOMY STRATEGYRACES:Resources Awareness and Circular Economy Strategy2January 2023.AuthorsThis English publication was written by:Alain Chardon,Elsa Ota,Agathe Hellich,Charlotte LemaitreSpecial thanks to Stanislas Ancel,Clment Chenut,Julia Mller,Tejas Shinde

2、and his team,Andr Sammarcelli,Ethinos team.Citation of this publication:Alain Chardon,December 2022,RACES:Resources Awareness and Circular Economy Strategy CAPGEMINI INVENT,60 pagesDownload(English):https:/ of the content of this publication is based on a previous report published in French:Emmanuel

3、le LEDOUX,Alain CHARDON,Avril 2022.SNBC sous contrainte de ressources Une approche intgre de la transition bas carbone circulaire-INEC,CAPGEMINI INVENT-Rapport complet et Annexe 1(144 pages),Annexe 2 Fiches domaines et ressources(62 pages),Annexe 3 lments quantitatifs(76 pages).Download(French):http

4、s:/ Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 43EDITORIALBy Alain CHARDONCapgemini Sustainability PlatformsCompanies must transition from a paradigm of performance to a paradigm of resilience.Recent world events have forced companies to be radical

5、ly agile,have put procurement and crisis management departments to the test,and have stretched supply chains to the breaking point-pushing CxOs to change their take on corporate management.The starting point for such a transformation is resources.World-wide industrial activities are bound together b

6、y their dependence on the availability of natural resources.The demand is growing,driven by the advent of resource-intensive industries,like tech and digital.Low-carbon trajectories,involving the electrification of transport and the rise of renewables,are generating further pressure on resources.Fro

7、m the decadal assumption that resources are widely available,industrial stakeholders inherited a mindset whereby one is not properly vigilant regarding the availability of resources.Carelessness does not only cause damage to the environment it also endangers a companys capacity to bounce back in tim

8、es of trouble.Companies are on the verge of a resource crisis which threatens their core-business.In the near future,all business units from all companies not only procurement teams will bear the consequences of the 6 risks related to resources availability:geological and geopolitical availability o

9、f raw materials,competition between industrial sectors and countries,lack of substitution alternatives and recycling potential,and social and environmental impact.These risks will materialize through sky-rocketing commodity prices,severe supply chain disruptions and pressure from NGOs,customers and

10、analysts to the point where the core-business is in jeopardy.CxOs must make circularity their main objective to make their company resilient.This pushes companies to rethink their resource management,and beyond that,to transform their business model and purpose.The solution is to fully embrace circu

11、lar models.This fundamentally changes our approach to the circular economy as circular initiatives which were mostly motivated by sustainability efforts,are now driven to the center stage in business-driven strategies by risk-management.CxOs need a resource-aware vision and robust methods to achieve

12、 it.Integrating resource criticality awareness to your vision will bring exhaustivity&coherence to your initiatives.Circularity will soon become a key strategic element in every industrial activity,unleashing a myriad of business opportunities.CxOs have so far been missing two vital elements to prop

13、erly assess resource-related risks and protect themselves:1/a resource-aware vision,2/a robust approach and tools to achieve it.The purpose of this report is to provide CxOs with these elements.RACES:Resource Awareness and Circular Economy StrategyAt Capgemini,we have developed a brand-new methodolo

14、gy built around two tangible tools,to evaluate your exposure to resource-related risks and assist you in building the best strategic response while improving business resilience:The 16 Circularity Business Segments(CBS)matrix to identify strategic levers of actions to achieve circularity,and busines

15、s opportunities nestled in a circular model,each with a business case of their own.A new metric and Resource Criticality Factors(RCF)to quantify technologies,opportunities,business scenarios.Combining both will lead to a prioritization of CBS in a robust corporate strategy,No matter your starting po

16、int,RACES can help you turn resource criticality into business opportunities.In this report,you will find four different steps to build a robust corporate strategy leading to a successful,de-risked transformation and implementation phases on the field:Resource-awareness&vision to pre-assess vulnerab

17、ility areas in your current AS IS business and start building a vision Circular Economy Strategy to identify opportunities using the 16 CBS and prepare robust TO BE scenarios Quantification of criticality and business case to make decisions,but also measure progress overtime Transformation plan with

18、 tangible action items and implementation examples.We hope the report helps you adapt your strategy to implement circularity at each step of your value chain and gain resilience.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 44F I G U R

19、 E 1The RACES approach and its 2 tools for an actionable global corporate strategy Company business,Territory activityRACESResource Awareness&Circular Economy Strategy16 CBS MATRIXCircular Business SegmentsUnique metric.CRITICALITYfor Resource Criticality Factors(RCF)Box INEC Capgemini studyThe exam

20、ples displayed in this publication and the Resource Criticality Factor(RCF)have been created for the study“Circular low carbon economy an integrated approach”,co-published in April 2022 by Capgemini and the French National Institute for Circular Economy(INEC).In the study,the RCF quantification was

21、derived for 15 product domains and 11 resources.Two strategic scenarios were scrutinized:low and high circularity.The 16 CBS matrix is an additional creation for the present English publication.The methodology is fully applicable by private companies for their products,branches,and geographies,wheth

22、er their products are low carbon or not,as well as by public authorities for their territories.RACES:Resources Awareness and Circular Economy Strategy5Table of contents EDITORIAL 3Introduction:Reduce resource-risks at scale with a quantified circular strategy 8Chapter 1.Resource-awareness&vision 13

23、1.1 From carbon challenge to resource constraint 14 1.2 The resource constraint is exacerbated by the low carbon transition 15 1.3 All industries are affected by resource stress in their core activity 17 1.4 Six drivers of criticality convert resources in a challenge for CPOs,CTOs,and CSR leads.18 a

24、.Geological reserves 18 b.Concentration of suppliers in a decoupling and multipolar world 18 c.Competition of usages:19 d.Substitutability 19 e.Recyclability 19 f.Social and environmental impacts&risks 19Chapter 2.Circular Business Strategy 24 2.1 Capgeminis 16 Circular Business Segments(CBS)25 2.2

25、Our practical approach to conduct As-is and To-be opportunity identification 31Chapter 3.Criticality quantification 32 3.1 How to build and unlock triple-metrics analytics 33 3.2 Key examples of utilization and findings 37 a.Merit orders in Energy,Automotive,Construction:does my technology portfolio

26、 make my company future proof?37 b.Triple metrics:how do scenarios compare?40 c.Product lines and resources:what is the exposure to risk in my Business As Usual scenario?41 d.Product lines and resources:what is the detailed breakdown of criticality in both scenarios?43 e.What new balance sheet to me

27、asure the progress of my business?Circular flows,gross and net needs,and waste.44 f.How will the CBS opportunities reduce my exposure?46 3.3 Taylor the methodology to your own scope,priorities and objectivesChapter 4.Implementation and transformation 47 4.1 Major strategic stakes&tangible implementa

28、tion examples for a few handpicked industries 48 a.Transports:resource-criticality is heightened by the massive move for electrification 48 b.Construction:accelerating the penetration of circularity drivers requires large-scale design projects at all stages of the value chain 49 c.Equipment&High-Tec

29、h:hardware producers and retailers (tech,appliances,machines,)players are facing a paradigm shift from mass-market and single-use to component circularity 50RACES:Resources Awareness and Circular Economy Strategy6 d.Mines and Waste:extraction and first transformation industries and waste managers se

30、em about to be left on the sideline by the advent of large-scale circularity but have in fact a lot to gain in it.51 4.2 All CXOs and their departments have a role to play in circular business.52 e.Eco-design,a transformative approach of products,services,as well as corporate strategy.52 f.Operation

31、s:Onward and reverse circular operations in the field requires the COO to plan and run coordinated central,local and onsite activities.52 g.Procurement is deeply impacted as materials flows and services change in nature.53 h.Digital:CDOs shall catalyze traceability,insurability and cost competitiven

32、ess in complexified circular operations 54Capgeminis value proposition and assets 56RACES:Resources Awareness and Circular Economy Strategy7INTRODUCTION:REDUCE RESOURCE RISKS AT SCALE WITH A QUANTIFIED CIRCULAR STRATEGYRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPT

33、ER 1CHAPTER 3CHAPTER 2CHAPTER 48Introduction:Reduce resource-risks at scale with a quantified circular strategyMany industries are exposed to serious resource-related issues that will materialize as severe exposure to pricesurges,supply chain disruptions in a decoupling worldexposed to sanitary and

34、geopolitical crisis,and negative social and environmental impacts.Meanwhile,regulations evolve and gradually impose stricter rules onresource-management,by penalizing players trailing behind,but also by rewarding proactive actions resulting in reduced use and impact.The Value Hill model1 Industry ad

35、ds value to the economy when products are transformed from raw materials to finished goods sold to consumers.In the linear economy Value Hill model,after consumer use,value is destroyed each time a product is thrown away with all its included resources.Though material resources are as precious as en

36、ergy to fuel the modern economies,they are spoiled.In the circular Value Hill model,since a products resources are only gradually destroyed when the product is damaged,each downhill stage is an opportunity to retain value and re-inject materials to the uphill path back to their respective stages of

37、production.1 Source:circle-LINEAR VALUE HILLADD VALUEADD VALUEUSEUSEDESTROY VALUE RETAIN VALUE RepairShared EconomyResellRepurposeRemanufactureRecycleMineExtractionPRE USEPRE USEUSEUSEPOST USEPOST USEFirstTransformationManufacturingAssemblyRetailCIRCULAR VALUE HILLF I G U R E 2The value hill resourc

38、e management modelSource:circle-,Sustainable Finance Lab,Circle Economy,Nuovalente,TUDelft,Het Groene Brein,Capgemini analysisRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 49Multiple co-benefits but a double challengePrivate companies

39、need to build a resource-aware vision of their business and actionable circular economy plans to gain resilience,ensure the viability of their business plans,and create new opportunities encompassing a broader view of their supply chain,stakeholders,and clients.Moreover,as shown in Figure 3.a strate

40、gy taking into account resources and circular business cascades multiple co-benefits with high impact on nature and people,that would cost higher efforts to solve separately.Nevertheless and beyond economic maturity,circular economy resists to C-level executives for at least two reasons,lack of holi

41、stic view and lack of single metric,This document proposes two innovative tools.The 16 CBS matrix to build a holistic corporate strategyBuilding a global strategy remains a challenge as circular activities are currently scattered in a multiplication of local heterogeneous initiatives:per branch,per

42、product,per stage of the value chain,per circular lever,per resource.The available frameworks(3Rs,5Rs,10Rs)remain quite theoretical,disconnected from the company departments,and keep more attached to resources than to businesses.That is why Capgemini has developed an actionable set of 16 Circularity

43、 Business Segments(CBSs).They will help industrial players to engage in solution-oriented actions to achieve circularity.Each segment can come with standalone business cases,which also bring along many benefits for companies&territories.A single metric for resources,in the same way tCO2 are the sing

44、le metric for climateThere is currently no official single indicator covering the diversity of resources and challenges.Turning to a resource aware strategy entails that criticality be as relevant andhelpful as key indicators for business performance or carbon footprint2.CxOs need criticality measur

45、e to build and monitor a holistic resource vision and a circular strategy2 Financial KPIs,starting with margin levels,are required of all company boards to evaluate a companys performance.The tCO2eq is used to report on a companys GHGs emissions and monitor the implementation of low-carbon strategie

46、s.There is no such indicator for criticality.at the scale of their company.For that,Capgemini has built the ultimate Resource Criticality Factor(RCF),expressed in.criticality,resulting from the multiplication of volumes,price and impact.Resource Criticality Factors(RCF)can be used as prices and carb

47、on emissions factors(CEF).These two tools are embedded in a structured approach named RACES:Resource Awareness and Circular Economy Strategy.With RACES and its two tools,companies can now build potent holistic resource and circular economy strategy.RACESResource Awareness,Circular Economy Strategy&Q

48、uantificationRESILIENT&FUTURE PROOFREDUCED COSTSREDUCED RISKS ON ACCESS TO RESOURCESWASTEPOLLUTANTS,HEALTHReduced IMPACTSIncreasedCIRCULAR ACTIVITIESReduced need forEXTRACTIVERESOURCESWATER,SOILSBIODIVERSITYBENEFITS FOR COMPANIESBENEFITS FOR TERRITORIESBENEFITS FOR NATURE&PEOPLEINDEPENDENCY&REINDUST

49、RIALI-SATIONRESILIENT&FUTURE PROOFCO2 EMISSIONSSCOPES 1,2,3 NATURAL SPACE ARTIFICIALISATIONF I G U R E 3The value hill resource management modelRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 410RACES:Resources Awareness and Circular Eco

50、nomy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4111.RESOURCE AWARENESS2.CIRCULAR ECONOMY STRATEGY4.IMPLEMENTATION,TRANSFORMATION3.QUANTIFICATIONTCO2EUROSCRITICALITY SCORESRESOURCE CRITICALITY FACTORS(RCF)Build awareness on risks exposure through discussion of 6 criticality crit

51、eria,related potential disruptions,weight importance for company Define the scope(resources,products,business units)Set up first vision through scorings by resource and mapping of selected products and business units Implement projects:quick win opportunities,pilot initiatives,implementation at scal

52、e Transform functions such as operations&logis-tics,procurement,digital and ecodesign.KPI monitoring of resources and circular business in light of defined objectives and busi-nesses(.Criticality,TCO2eq,Euros)Scorings 1-5 per criteria and resource Translated in criticality impacts 1-100 Resources-re

53、lated risks exposure CEF Carbon Emissions Factors(TCO2)Top line business revenues,savings,ROI,investments(k)AS IS situation,Baseline scenario TO BE opportunities Merit orders 3-5 company scenarios for decision making Resources tonnages(t)and prices(/t)RCF Resource Criticality Factors(.Criticality/t)

54、Normative or per supplier Before/after circularity Use Capgeminis 16 Circular Business Segments(CBS)Analyse AS IS situation Identify TO BE opportunities Qualify the TO BE circular business opportunities Build 3-5 scenarios steered towards business resilience,performance,robust resource management an

55、d positive impact Decision making Roadmap Action plan1 month1 to 3 months6 to 18 monthsTHE METHODOLOGY CORNERRACES approach:Resource Awareness&Circular Economy StrategyF I G U R E 4RACES approach,4 tasks from vision to implementationRACES:Resources Awareness and Circular Economy StrategyEDITORIALINT

56、RODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4THE METHODOLOGY CORNERRACES approach:Resource Awareness&Circular Economy StrategyFour steps from vision to implementationCapgeminis comprehensive approach boils down to 2+1 streams mirroring each other before implementation.Each relies on one new tool tha

57、t Capgemini brings to the table.The two first streams aim to assess corporate vulnerability to resource-criticality and to uncover the potential of circular business opportunities;the associated tool is the 16 Circular Business Segments(CBS)strategic matrix.The third stream aims to quantify this vul

58、nerability,potential and business opportunity taking into account criticality;the associated tool is the resource-criticality factor(RCF).1.The Resource Awareness(RA)phase is intended to determine your companys maturity and vision regarding resource-criticality.These preliminary assessments include

59、a first criticality-scoring to pinpoint factors contributing most to your risk exposure in terms of resource criticality,e.g.operational pain-points(key resources&products).This preliminary phase should conjure a big picture&outline strategic priorities to be considered in the next steps.2.Circular

60、Economy Strategy(CES)comes in to enhance the traditional business approach with resource-criticality considerations.The 16 Circular Business Segments(CBS)will be key to assess your current circularity maturity and identify most relevant opportunities for the future.These opportunities will be levera

61、ged into qualified business,resource-criticality wise.The opportunities will be rearranged in a few scenarios for decision-making and translated in a robust action plan down the line.3.The quantification stream provides the right decision-making metrics and enhances the opportunity qualification&sce

62、nario analysis.CxOs will be able to compare the opportunities and scenarios in terms of volume,cost,and.criticality;and infer business implications()in conjunction with operations and procurement departments.A circular and resource-aware strategy also comes with a co-benefits case,such as reduced ca

63、rbon emissions,improved biodiversity footprint and lower social impact.4.Tangible implementation and transformation follow a robust strategy.Quick wins and pilot initiatives need to go hand in hand with long-term scaling initiatives and will provide first feedback with KPI monitoring including criti

64、cality in light of defined objectives.12RACES:Resources Awareness and Circular Economy Strategy1301RESOURCE-AWARENESS&VISIONA corporate strategy not tackling resource constraints jeopardizes the companyRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAP

65、TER 2CHAPTER 41.1 From carbon challenge to resource constraintThe carbon challenge is now on top of many CxOs agendas.Resources and circular economy are the next and soon-to-come frontier in their agendas for three reasons.The first reason is that reducing GHG emissions to low levels requires necess

66、arily reducing the impact of resources,both in terms of quantities extracted and in terms of transformation needed.Out of the 40 GtCO2e emitted yearly by human activities,the transformation of the mineral resources into goods and equipment by businesses account for 55%,i.e.more than the use of energ

67、y by final customers to run these goods,their homes and to travel,which only account for 45%3.3 10 GtCO2e/yr can be added for land,forest and related agro-industry emissions,summing up to 50 GTCO2e yearly.Emissions from Energy usage of goods and equipment by final customers 45%Emissions from Mineral

68、 resource transformation into goods and equipment(energy and process)55%40 GtCOe/yrSource:World Resource Institute,2019 figures,Capgemini analysis F I G U R E 5Weight of transformation of mineral resources in global emissions:No Net-Zero without Circular economy14RACES:Resources Awareness and Circul

69、ar Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4151.2 The resource constraint is exacerbated by the low carbon transitionThe second reason why we are moving from carbon challenge to resource constraint is that decarbonization plans highly count on resource-intensive techn

70、ologies.Turning away from fossil-fuels means shifting the demand to other resources,inducing a major concern with the feasibility of many decarbonization strategies resource-wise.Capgeminis research led for INEC at the warns that if Frances economy remains predominantly linear,implementing its low c

71、arbon strategy will increase the cumulated.criticality4 of metals and minerals by a factor of 16 at the countrys scale by 2050(cf Figure 8).Green technologies,deemed from a low carbon transition point of view,are in fact a high risk regarding resources,electric cars being the most blatant example.El

72、ectric mobility will be responsible for the 65%increase in criticality deriving from the expansion of low carbon technologies as per the French low carbon strategy(cf Chapter 3,Figure 18).A high circularity scenario would limit this multiplication to a factor of 4.4 Cf explanation of the.criticality

73、 new holistic metric in Chapter 3.Criticality quantificationF I G U R E 6Low carbon high tech economy is not feasible without circular business(INEC Capgemini study)Scenario ABAU Business As Usual.Criticality.criticality in 2050.criticality todayfor 15 low carbon businesses in France.Criticalityx16x

74、4Scenario BHigh circularityRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 416F I G U R E 6Low carbon high tech economy is not feasible without circular business(INEC Capgemini study)ELECTRIFICATION,HYDROGENHEAT AND BIOMASSCONSTRUCTION3

75、branches15 business domainsElectrification,H2 Electric vehicles Hydrogen vehicles H2 electrolysis Heat pumps Nuclear Onshore wind Offshore wind Solar PV Power gridsHeat and Biomass District heating Deep geothermal energy Gaseous biomass Solid biomassConstruction Buildings New build Buildings-Retrofi

76、tElectrification,H2 Lithium Cobalt Platinoids Rare earths Copper Graphite Silicon Aluminium Nickel Steel ConcreteHeat and Biomass Wood Agriculture Urban and industrial waste Steel ConcreteConstruction Steel Aluminium Concrete14 critical resourcesRACES:Resources Awareness and Circular Economy Strateg

77、yEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4171.3 All industries are affected by resource stress in their core activityThe third reason why resource constraints join up carbon challenge in the CxO priorities is that all the industries are impacted directly,intensifying in turn the need

78、 for resources and the impact on environment.From high price volatility to geopolitical disruptions,access to natural resources gets more and more precarious.Technology possibilities do not always prevent from being dependent on specific resources.Sustainability impacts not only include climate,but

79、also other social and environmental risks generated by the intensive extraction and transformation of minerals.The service industry is exposed too:any weakness in the physical industry will pass on to the service industry,including financial services.Quantification shows that a circular strategy opt

80、imising the use of resource is absolutely necessary to ensure the resilience of the overall economy,the feasibility of the low-carbon transition,and the conservation of people and ecosystems.FINAL CUSTOMERSTHIRDTRANSFORMATIONSECONDTRANSFORMATIONPRIMARYTRANSFORMATIONEXTRACTIONINDUSTRYAUTOMOTIVERAIL,M

81、ARINEAERO&DEFENCECONSUMER GOODSMECHANICAL,ELECTRIC&PLASTIC COMPONENTS PACKAGINGSTEEL&METALSGLASSMINERALSINFRASTRUCTURESELECTRONICCOMPONENTSWIND,SOLAR,BATTERIES,H2BUILDINGSTELECOMDIGITALELECTRONICSPAPERDirect threatIndirect threatOIL&GASBIOMASSCHEMICALSPLASTICSLIFE SCIENCESUTILITIESFOODRETAIL&DISTRIB

82、UTIONTRANSPORTS&LOGISTICSREAL ESTATE&HOSPITALITYHEALTHENTERTAINMENTCONSTRUCTIONDIGITALFOOD,ENERGY&CHEMICALSSERVICESMINESF I G U R E 8Most industries will be affected at different levels by mineral resource stress even indirectly services as they need equipment to operate.RACES:Resources Awareness an

83、d Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4181.4 Six drivers of criticality convert resources in a challenge for CPOs,CTOs,and CSR leads.Resources raise six challenges not only to public authorities,but also to private business CEOs and their departments:Chie

84、f Procurement officers(CPOs)must solve the challenge of accessibility to resource(reserves,concentration of suppliers,competition of usages)Chief Operations and Technology Officers(COOs,CTOs)are concerned with replaceability and recyclability.CSR leads face social and environmental proven impacts an

85、d future risks.a.Geological reservesCPOs should assess if a resource is geologically scarce or if it will remain abundant and accessible for a long time.For instance,at current growth rate,the reserves for hafnium,antimony,strontium will be depleted in the 2020s and the reserves for lead,gold,tin,ch

86、romium,zinc,silver in the 2030s5.Possible investments in exploration and extraction might extend the access to certain resources,but overall reserves are declining.b.Concentration of suppliers in a decoupling and multipolar worldWhen extraction and first transformation markets are concentrated or ev

87、en monopolistic(Figure 8),CPOs need to consider the supply risk across the whole value chain.Depending on the industry,geopolitical trends can pose difficulties in terms of dependency and price stability.5 USGS(2011 data),Barclays ResearchAUSCHLIDNAUSCHNCODCHNZAFCHNGINCHNPHLCHLUSARUSBRARUSBRACHNPERR

88、USCHNBMRAUSNORZWECAN0%20%40%60%80%100%AluminiumCopperNickelLithiumRare EarthsCobaltSiliconPlatinoidsGraphiteExtractionCHNCHNCHNCHNCHNCHNAUSCHLIDNCHLMYSFINBRAJPNJPNARGESTBEL0%20%40%60%80%100%AluminiumCopperNickelLithiumRareEarthsCobaltSiliconPlatinoidsGraphiteFirst TransformationGraphiteSiliconRare E

89、arthsPlatinoidsCobaltLithiumNickelCopperAluminiumGraphiteSiliconRare EarthsPlatinoidsCobaltLithiumNickelCopperAluminiumF I G U R E 9Concentration of suppliersRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 419c.Competition of usages:Reso

90、urces are coveted by many industries(low carbon industries,aerospace,defense,IT,digital equipment,telco,etc.)and countries,which CPOs need to monitor closely.Intense competition can inflate the demand and therefore criticality as well as questioning the willingness to pay in most exposed industries.

91、d.SubstitutabilityEarly on the value chain,engineering&design functions must acquaint themselves with how much their business relies on a single kind of resource and look for available or soon available alternatives to reduce their exposure to criticality.e.RecyclabilityProduct development departmen

92、ts need to have in mind the recyclability of each critical resource in light of their own technological maturity regarding the latter.Relying on easily recyclable materials and existing recycling processes can help alleviate resource criticality.For instance,lithium is not recyclable and alloyed met

93、als are not massively separable.Integrating recyclability considerations in the process requires innovation and simpler component design.f.Social and environmental impacts&risksCSRs tackle a growing number of risks that arise in relation to the extraction and exploitation of natural resources.They s

94、pan from minor to major impacts and can render specific supply channels unacceptable to end customers.Major environmental impacts on ecosystems include water and land contamination,soils degradation,wildlife space fragmentation,deforestation,biodiversity losses,while social risks can go as far as su

95、bjugation of local population,threats on livelihood and culture,forced displacements,migrations,modern slavery,child-labor and other violation of human rights.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 420THE METHODOLOGY CORNERChoos

96、e the scope&raise awareness by pondering the criticality criteriaThe scoring methodology developed in this paper can be applied at various levels,giving CxOs the possibility to choose a criticality-analysis perimeter(market,company,business unit,)6.It provides a standard weighting grid to enable com

97、panies to compare to their peers(imagine an SBTi equivalent for resource-criticality),even though the analysis should be tailored to meet the companys assessment objectives.The scoring approach to criticality scoring follows 5 steps:Discuss&raise awareness on risks exposureGather a transversal task

98、force including strategy,operations,technology procurement,CSR.For each resource,discuss the underlying criticality factors to raise awareness regarding the six resource-related business risk and weight.In Figure 10,allocated coefficients are 1 1 1 1 1 1 in the example,but could be for instance 2 2

99、2 3 3 6 if company wishes to balance the three criticality families,ie access,dependency,sustainability.Define the perimeterChoose the branches,products,geographies,operations,value chain to be included the analytical scope,based on the awareness sessions and the business objectives.6 An industry as

100、sessment on a global scale,based on international publications such as those from the International Energy Agency(IEA),the US SGDS agency and the European Commission,provides high-level resource-related stakes and macro-economic trends.More specific assessments by geography or by company will help a

101、ssess how a better selection of supplier and procurement strategy can improve the rating,thus the resource-criticality exposure.F I G U R E 1 01-5 scores as weighted average of six criticality criteriaSCORES 1-5ACCESS TO RESOURCEChallenge for CPO Procurement,StrategyGEOLOGICAL RESERVES111111CONCENTR

102、ATION OF SUPPLYING COUNTRIESSUBSTITUTABILITYRECYCLABILITYCOMPETITION WITH OTHER STRATEGIC USAGESChallenge for COO CTOOperations,TechnologyChallenge for CSOCorporate SustainabilityRESOURCEDEPENDENCYSUSTAINABLE IMPACTSSOCIAL AND ENVIRONMENTALRISKS AND IMPACTSRACES:Resources Awareness and Circular Econ

103、omy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 421F I G U R E 1 1Scores 1-5 per resourceCPO:Geological reservesCPO:Concentration of supplying countriesCPO:Competition with other strategic usagesCTO:SubstitutabilityCPO average(Access to resource)CTO:RecyclabilityCTO average(Depen

104、dency to resource)CSR:Social and envivironmental risks and impactsCSR average(Social and environmental)Global Resource Score 1-5LITHIUMCOBALTPLATINOIDSSILICONRARE EARTHSALUMINIUMCOPPERNICKELGRAPHITESTEELCONCRETEWOOD BIOMASSAGRICULTURE BIOMASSWASTE BIOMASS4444444444444444443LICOCUGRSIALNISTPTDRARESco

105、res 1-5ResourcesCONCAGRWASWOOD33333332222222222.02.02.02.02.01.32.53.03.03.03.05.05.05.05.03.53.83.74.04.23.03.03.03.04.34.34.32.53.73.73.73.53.33.53.03.52.02.02.02.02.32.03.02.51.81.72.72.72.72.72.82.82.82.02.04.0222333333333333333355555555RACES:Resources Awareness and Circula

106、r Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 422Assess and aggregate the 1-5 scores per resource.For each resource,proceed with the 6 multi-criteria scoring on a 1 to 5 scale.The 6 criteria are then averaged in a single score with the chosen weights(Figure 12).For the mo

107、st mature companies,the scores may be differentiated per supplier.F I G U R E 1 2Rating grid for 1-5 scores12345MajorSCORECRITICALITYEXTRACTIONGEOLOGICAL RESERVESCOMPETITIONFOR RESOURCESSOCIAL ANDENVIRONMENTAL CONCENTRATION OF SUPPLYING COUNTRIESFIRSTTRANSFORMATIONR/PRESERVES VS PRODUCTION60%TOP 1TO

108、P 3TOP 1TOP 360%80%Strong40%60%40%60%Medium20%40%20%40%Minor10%20%10%20%Not Critical200 yearsNoneNone10%20%10%20%RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 423Expose first hotpoints with the heatmap of the company Build the heatmap(

109、Figure 13)by crossing the branches or product lines with the resource scores.Get an overview of your overall risk exposure and highlight the hot points of criticality for your business.F I G U R E 1 3Qualitative heatmap per business domainsLITHIUMCOBALTPLATINOIDSSILICONRARE EARTHSALUMINIUMCOPPERNICK

110、ELGRAPHITESTEELCONCRETEWOOD BIOMASSAGRICULTURE BIOMASSWASTE BIOMASSLICOCUGRSIALNISTPTDRARECONCAGRWASWOODElectric VehiclesHeat PumpsOffshore WindDistrict HeatingGaseous BiomassHydrogen VehiclesNuclearSolar PVDeep Geothermal EnergyBuildings-New BuildHydrogen ElectrolysisOnshore WindElectric GridsSolid

111、 BiomassBuildings-Retrofit3.24.24.03.73.73.83.83.83.53.33.53.53.53.53.53.32.82.82.82.02.02.02.02.02.02.02.02.02.02.02.02.02.02.02.02.02.02.32.51.81.82.02.02.02.02.02.02.32.02.02.82.82.82.82.82.82.82.82.82.82.82.82.82.82.82.83.53.33.53.53.82.82.83.12.62.63.12.82.62.02.02.12.32.32.3Resource Heatmap(1-

112、5)per business domainDerive first elements of visionDerive a first version of the learnings and vision for the future in terms of techs,business,suppliers,risks.Be aware that this phase is only qualitative.The full quantification described in Chapter 2 will deliver a more detailed picture,other lear

113、nings and food for action.Prepare in consequence the strategic and quantification phases(see chapters 2&3).RACES:Resources Awareness and Circular Economy Strategy2402CIRCULAR BUSINESS STRATEGYCapgeminis 16 circular business segments to steer your company towards a circular modelRACES:Resources Aware

114、ness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 425Capgemini has devised a strategic matrix featuring 16“Circular Business Segments”(CBS).Each can bear a specific business plan and business case.The 16 CBS matrix enables you to roll-out a strategic process,f

115、rom assessing your current maturity to generating opportunities and envision scenarios to build a resilient corporate business strategy.2.1 Capgeminis 16 Circular Business Segments(CBS)The 16 CBS provide an exhaustive approach to all opportunities in circular economyThe 16 CBS matrix outlines action

116、s to undertake to transition from a linear to a circular model.It holistically covers all aspects to be examined yet avoids redundancy and echoes the value hill framework.It also contains the central-local-onsite breakdown-for easier appropriation by operational decision makers(CSO,CMO,COO,CTO,CPO,C

117、SR).This matrix will enable you to conduct a holistic assessment of what the state of art is in your firm in terms of circularity(“AS IS”),flag what is left to improve,and how.For each CBS,typical“To be”positioning decisions at short,medium and long term are No Go(let others try)Go(outsource),Go(ins

118、ource)The vertical axis indicates where the CBSs encompass the conventional value chainThe vertical axis follows the conventional value chain of linear extractive economy,from mining activities(bottom)to manufacturing and retail activities(top).It sets up the reference for where the circular economy

119、 loops in and comes out.The Horizontal axis(1)reflects the direct and reverse operationsThe horizontal axis distinguishes two parts:the direct manufacturing and service process to clients(left part)and the reverse process dealing with end-of-life equipment and recovering value from goods or parts(ri

120、ght part).The combination of both parts creates the circular opportunities.The Horizontal axis(2)reflects the location and type of operations generated by the CBSs Onsite:in clients premises,as a part of the end-consumers journey Local:close to the end-consumers location(less than one hour or 100 km

121、 away)Centralized:the operations are carried out in large size sites serving a whole area,country or even region.The shift towards circular economy can be compared to the transition in the energy sector.Business and operating models become complementary between centralized large facilities(nuclear o

122、r gas plants in energy,large manufacturing and remanufacturing plants in circular economy),in between local or regional operations(wind farms in energy,service centers for repairing and repurposing in circular economy)and local on-site operations(solar roofs in energy,equipment in clients premises i

123、n circular economy).Intermingled yet well differentiated CBSSome CBSs echo each other,such as“recycle”vs“use recycled materials”or“repurpose”vs“use repurposed components”.We have split the usual ambiguous word“Repurpose”into several CBSs,as it involves a completevalue chain7 on which the company mus

124、t make strategic choices Collecting and sorting Repurposing end of life products,which entails operations that are usually the role of waste companies but may have in the future to be strategically incorporated in the activities of the company Sourcing internally or externally the repurposed parts U

125、se them in the industrial activities of the company:repair,retrofit,remanufacture Use them in the commercial activities of the company:resell,marketplaces.Conversely,the retrofit of a given equipment(left part)can use spare parts and materials from different origins(right part):repurposed second-lif

126、e components,recycled materials,but also biomaterials and of course spare parts from conventional linear newbuilt origin.Procurement becomes key,as repurposed components or recycled materials may come from internal activities or purchased from external suppliers.Vice-versa,end-of-life products that

127、have been collected,disassembled,and sorted may be sold rather than used internally.7 For the same reasons“Recycle”has been split in several CBS.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 426F I G U R E 1 4Mapping value chain,locati

128、on and direct/reverse flows of circular activitiesCENTRAL PLANTSANTICIPATERETAIN VALUERECOVER VALUEMAINTAIN VALUECENTRAL PLANTSLOCAL OPERATIONSLOCAL OPERATIONSNEW REVERSE CIRCULARRetaining value(downhill)NEW ONWARD CIRCULARBuilding up&sustaining value(uphill)ONSITE CLIENTS RETAIL&TRADEASSEMBLY MANUF

129、ACTURINGFIRSTTRANSFORMATIONMINESEXTRACTIONANTICIPATEMAINTAINRETAINRECOVERThe role of CxOs8 in the Value Hill triangleThe 16 CBS are divided into 4 categories regarding the ways of sustaining value,echoing the value hill framework(sym-bolized by the background triangle and shapes in Figure 18)Anticip

130、ate:Limit gross resource requirements,through avoiding(CSO)and reducing(CTO),are strategic steps to work with minimized efforts towards a circular model boosting resilience,decarbonization and conservation of ecosystems.Maintain:Create new profitable value propositions(CMO)based on products in good

131、state seeing their lifes-pan and usage extended.Retain:Manage onward production steps to yield new products(COO)that integrate looped components or materials procured internally and externally(CPO).Recover:Manage reverse operations to recover value form discarded objects,parts and materials and prep

132、are them to re-integrate the production and the commercial cycles(COO).The circularity shift provides industrial players with the op-portunity to selectively diversify activities and expand their presence on value chains.8 CSO Chief Strategy Officer,CMO Chief Marketing officer in charge of products,

133、clients,and experience marketing,COO Chief Operations Officer,CTO Chief Technology Officer,CPO Chief Procurement Officer,CSR Corporate Social Responsibility leadRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 427F I G U R E 1 5The 16 CBS

134、 matrix(Circular Business Segments)RETAIL&TRADEASSEMBLY 2-REDUCEEco-design&OptimizationFromproducts and servicesTo processesand operations1-AVOID(Decisions leading to lower gross need regarding portfolio,products,client usage,business models)6 MARKET PLACEfor any of the above or below flows,onward o

135、r reverse 3-SHARED ECONOMYCENTRAL PLANTSCENTRAL PLANTSLOCAL OPERATIONSANTICIPATEMAINTAINRETAINRECOVERLOCAL OPERATIONSNEW REVERSE CIRCULARRetaining value(downhill)NEW ONWARD CIRCULARBuilding up&sustaining value(uphill)ONSITE CLIENTS4-SECOND LIFE/RESELL 5-MAINTAIN/REPAIR13-DISASSEMBLE SORT products,co

136、mponents12-COLLECT-SORTproducts,components7 REFURBISH/RETROFIT8-REMANUFACTURE9-Use&source REPURPOSED COMPONENTS14-REPURPOSE COMPONENTS 10-Use&source RECYCLED MATERIALS15-RECYCLE MATERIALS 16-REGENERATE SITES(Mines,plants disposal)11-Use&source REGENERATIVE BIOMATERIALSMANUFACTURINGFIRSTTRANSFORMATIO

137、NMINESEXTRACTIONRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 42816 CBSCSOCMOCMOCMOCMOCTO,COO1.Avoid2.Reduce 3.Shared economy 4.Second life/resell5.Maintain/repair 6.Market place(sell/re-sell)Main CxO in chargeAS IS assessment,TO BE op

138、portunities review(go insource,go outsource,no go,when)Make strategic decisions to minimize dependency on strategic resources with high social/environmental impact,divest and move from some businesses,product or technology families to others,or encourage clients to minimize the use of the productDev

139、elop activities in sale of second life products and parts.Resold goods may come with minor repair and some components change-in that case spare parts may come from conventional linear new built economy,or from repurposed origin(#9),or from biomaterials origin(#11).Provide repair and maintenance serv

140、ices to keep a product in service as long as possible.Spare parts may come from conventional linear new built economy,or from repurposed origin(#9),or from biomaterials origin(#11).Develop sell or resell platforms to manage your looped products,components,materials,externally in B2B,B2C and internal

141、ly within your group.Orienting the business model to a service provision model,like energy-as-a-service Substituting materials by others to relieve the pressure on critical resources,e.g.in kitchenware industry.Crop size of vehicles for a given mobility service Re-deploying professional solar panels

142、 becoming less performant by houses of individuals.Exploiting mobility batteries becoming less performant for stationary use.Offering spare parts and tutorials for the user to fix their device themselves,like we see in sporting equipment.Having repair corners at retailers,just as clothing brands now

143、 offer alterations Platforms for construction materials Platforms for power plants second life spare part Platforms for repurposed parts of airplanes.In the textile industry,optimizing cutting patterns to minimize fabric waste and energy consumption.Sufficient products Car sharing,co-working spaces,

144、home rental,mobility as-a-service,tool and machinery rental,libraries of thingsReduce the quantity of resource needed and of waste in each unit of product and in the manufacturing process,through improved eco-conception and engineeringDevelop functional economy/shared services/product-as-a-service s

145、olutionsAnticipateLimit gross resource requirements,through avoiding(CSO)and reducing(CTO),are strategic steps to work with minimized efforts towards a circular model boosting resilience,decarbonization and conservation of ecosystemsMaintain valueCreate new profitable value propositions(CMO)based on

146、 products in good state seeing their lifespan and usage extended.ExamplesTHE METHODOLOGY CORNERThe 16 CBS explainedRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 429Retain valueManage onward production to yield new products(COO)that int

147、egrate looped components or materials procured internally and externally(CPO).Recover valueManage reverse operations to recover value form discarded objects,parts and materials and prepare them to re-integrate the production and the commercial cycles(COO).COOCOOCPOCPOCPOCOOCMO,COO7.Refurbish/retrofi

148、t8.Remanufacture9.Use repurposed components10.Use recycled Materials 11.Use regenerative Biomaterials 13.Disassemble-Sort12.Collect-SortRecondition and/or improve used products to extend their life,by changing significant components and/or upgrading software or hardware.Components may come from conv

149、entional linear new built economy,or from repurposed origin(#9),or from biomaterials origin(#11).Use repurposed components as part of your“Maintain”and“Retain”activities such as Second Life/resell(#4),Maintain/Repair(#5),Refurbish/Retrofit(#7),Remanufacture(#8),Market place(#6).The CPO may procure t

150、he repurposed components from insourced activities(12,13,14)or purchased from external suppliersUse recycled materials as part of your“Maintain”and“Retain”activities as well as conventional manufacturing(#2 reduce).The CPO may procure the recycled materials from insourced activities(#12,#13,#15)or p

151、urchased from external suppliers.Use biomaterials as part of your“Maintain”and“Retain”activities as well as conventional manufacturing(#2 reduce).The CPO may procure the biomaterials from external suppliersDevelop activities in disassembling and sorting used products,components and materials to feed

152、 the repurposing and recycling processes.Develop activities in collecting and sorting used products,components and materials to feed the disassembling,repurposing and recycling processRe-manufacture products-either similar or different from the initial ones-by integrating a mix of repurposed compone

153、nts(#9),new build components,recycled materials(#10)and/or regenerative biomaterials(#11).Refurbishing smartphones to prolong their lives.Retrofit buildings to make them more energy efficient.Repurposing newspaper or textile as insulation for building.Making paper sheets from industrial paper scraps

154、 or used paper.Making pens or jumpers from old water bottles Bioplastics in car interiors.Using bio-sourced solvents or catalysts in the pharmaceutical industry.Designing modular products so that they are easily dismantled Collect the empty containers when you come in for the next delivery,as some b

155、ulk grocery and bottled water brands already do Educating users to bring their used batteries or lightbulbs to collection points.Reuse the foundations,masts,and electromechanical elements of old wind turbines for the construction of new generation ones.RACES:Resources Awareness and Circular Economy

156、StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 430COOCOOCSR14.Repurpose components 15.Recycle Materials16.Regenerate sitesDevelop own activities in repurposing components to resell them or to support your “Maintain”and“Retain”activities.Regenerate sites where you cease activities-in

157、dustrial,logistic,mining,or waste disposal.Develop activities to control and recycle the used materials to feed your internal uses or to resell materials.Planning the architecture of buildings so that they can be reversed between office use and housing use.Leaving no social/health or environmental i

158、mpact behind,for instance through processes and solutions to regenerate soils,biodiversity,and local human activities.Shred and melt materials,e.g.glass or metal,into a new piece for assembly.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPT

159、ER 4312.2 Our practical approach to conduct As-is and To-be opportunity identificationThe 16 CBS matrix can be used as a support to a classic and robust strategic approach.Typically,a long list of 15-60 opportunities can be derived from the CBS matrix and the scan of the product lines,branches,and m

160、arkets of the company.Second,the qualification of the opportunities can be based on tools such as Osterwalders Business Model Canvas9 slightly adapted for circular business.After their qualification,all opportunities will be prioritized in a shorter list of 10-20 opportunities and cross-examined as

161、part of scenarios,which will be used for decision-making down the line.The 3-5 scenarios will showcase different levels of ambitions and investment,and possibly point to different visions on how to retain resource value and develop business.Third,the decision making is based on a business plan(activ

162、ity,investment,ROI,break even.)and leverages the.criticality metric to measure criticality improvement across multiple strategic resources and departments of the company.The quantification methodology in.criticality is detailed in chapter 3.Last,outputs will provide both a short-term action plan to

163、implement rapidly on favorable playfields,specific production sites or distribution perimeters.The output can also provide a roadmap with long-term initiatives to roll-out over several years,and which will challenge the way core-business is operated and help the large-scale shift towards circularity

164、.9 Osterwalder,Alexander;Pigneur,Yves;Clark,Tim(2010).Business Model Generation:A Handbook For Visionaries,Game Changers,and Challengers.https:/ I G U R E 1 6F I G U R E 1 7Phase 2 Circular Economy StrategyQualified the identified opportunities(example of tool)2.CIRCULAR ECONOMY STRATEGY Use Capgemi

165、nis 16 Circular Business Segments(CBS)Analyse AS IS situation Identify TO BE opportunities Qualify the TO BE circular business opportunities Build 3-5 scenarios steered towards business resilience,performance,robust resource management and positive impact Decision making Roadmap Action planBUSINESS

166、MODEL CANVAS(ADAPTED)KEY PARTNERSKEY ACTIVITIESSOURCES AND AMOUNTS OF REVENUESCOSTSKEY RESOURCESVALUEPROPOSITION+TCO2+TONNES,EUROS,.CRITICALITY OF RESOURCES AVOIDED,REUSED,RECYCLED IN CORPORATES NEEDS AND WASTESTAKEHOLDERSRELATIONSHIPSCHANNELS,DIGITAL&LOGISTICSCUSTOMER&SUBFLOWSSEGMENTSRACES:Resource

167、s Awareness and Circular Economy Strategy3203CRITICALITYQUANTIFICATIONCapgeminis criticality indicators allow companies to quantify resource criticality and assess their response.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4333.1 How

168、 to build and unlock triple-metrics analyticsComplementing the global impact score and the 16 CBS methodologies defined previously,Capgemini has defined a quantification methodology to assess your companys current vulnerability vis-a-vis resources,and to project future scenarios.The quantification i

169、s centered around a new and single metric for criticality,.Criticality,which can be compared along typical business KPIs.It results from the multiplication of volumes,price,and impact scores for each of the resources included.The Resource Criticality Factors(RCF),expressed in.Criticality,are the ult

170、imate criticality indicators.They cover all underlying drivers&specificities of a given company and/or industrial activity.Applied to your existing situation,they will allow you to gauge your vulnerability.Applied to your future scenarios they will allow you to appreciate to what extent implementing

171、 more circularity will protect you from resource scarcity,and will help prioritizing CBS wisely in your future strategy.F I G U R E 1 8Criticality quantification for business1.RESOURCE AWARENESS Qualitative heatmap of your AS IS business2.CIRCULAR ECONOMY STRATEGY Identify 10-50 Circular Business Op

172、portunities Organize opportunities in 2-4 Circular TO BE scenarios Establish Business as usual Scenario (Baseline)Decision making 1 scenario Implement opportunities Monitor3.TRIPLE METRIC QUANTIFICATIONCRITICALITY SCORES.CRITICALITY Scorings 1-5 per criteria and resource Translated in criticality im

173、pacts 1-100TCO2EUROS CEF Carbon Emissions Factors(TCO2)Top line business revenues,savings,ROI,investments(k)Resources tonnages(t)and prices(/t)RCF Resource Criticality Factors(.Criticality/t)Normative or per supplier Before/after circularity Resources-related risks exposure AS IS situation,Baseline

174、scenario TO BE opportunities Merit orders 3-5 company scenarios for decision makingRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 434THE METHODOLOGY CORNER(3).RESOURCE CRITICALITY FACTORSBECAUSE TONNES MATTER:the addition of the tonnes

175、of resources included in the goods provide a first view of their importance to the decision-maker.But total tonnes hide the importance of strategic resources that are used in small volumes(platinoids,rare earths,).BECAUSE EUROS MATTER:Euros reflect the cost of resources in the business plan of the c

176、ompany and in the trade balance of a country.Yet euros only partially reflect the criticality in the future(risks on access to resource,on dependency to resource,on social and environmental impacts).BECAUSE CRITICALITY MATTERS:That is why it is proposed to multiply each euro by the criticality impac

177、t of the associated resource.F I G U R E 1 9Resource Criticality Factors(RCF)versus Carbon Emissions Factor(CEF)WUWUWUBusinessWUWUWorking UnitsTONS/WUTONSAddition for the selected resourcesOn products,branches,geographiesFor business as usual,for circular scenariosEUROS.CRITICALITY.CRITICALITYTCO2TO

178、NS/WUTONS/WUEUROS/TONRESOURCE CRITICALITY FACTORS(RCF)EUROS.CRITICALITY/WUCARBON EMISSIONS FACTORS(CEF)TCO2/WU CRITICALITY IMPACT1-100EUROS/TONNEW Metric.CRITICALITYRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 435THE METHODOLOGY CORNE

179、R(3).RESOURCE CRITICALITY FACTORSIn practice:Volumes:estimate the number of working units and the quantity of resources generated by your key products and activities.For a first global resources and circular strategy,rough estimates are more than enough.Prices:use the moving average commodity price,

180、typically ten years.Projecting the price in the future is not a necessity as 1.Such projections are uncertain and time-consuming 2.The impact multiplier(see next)includes the propensity for price increase through the criteria of access and dependency to resource.Impacts:In the resource awareness pha

181、se,you have scored(1-5)the criticality of resources based on you own strategic weightings of 6 key criteria(reserves,oligopolies,competition for resource,replaceability,recyclability,social and environmental).The 5-point scale is expanded to a hundred-point scale to emphasize the impact of high crit

182、icality scores and better reflect the amplitude of the real-world hazards caused by resources criticality.Derive the RCFs for your key resources.RCF can be global,or specific per supplier or per product line(social and environmental differences,technology dependency on resource)Use RCFs and critical

183、ity to quantify resources and circular opportunities(as you do with TCO2 for climate).Make wise strategic decisions by balancing EUROS,TCO2 and .CRITICALITY.Monitor the implementation and progress with the three KPIs.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER

184、 1CHAPTER 3CHAPTER 2CHAPTER 436RESOURCE PRICESkEuros/tonRESOURCE CRITICALITY FACTORSkEuros.criticality/tonResource Scores 1-5RESOURCE IMPACTS 1-100RESOURCE CRITICALITY FACTORSP22LI4,238,385741CO4,031,61 28945 863PTD3,721,5988 08187RARE3,826,12 2706,9CU3,517,81221,3GR3,314,7192,2SI2,88,3180,7AL2,88,3

185、5,814NI2,88,31160,2ST2,03,20,50,1CONCCONCRETESTEELNICKELALUMINIUMSILICONGRAPHITECOPPERRARE EARTHSPLATINOIDSCOBALTLITHIUM2,03,20,2IRCF=P*IF I G U R E 2 0Calculation of Resource Criticality Factors(RCF)RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTE

186、R 2CHAPTER 437F I G U R E 2 1Rescaling 1-5 Scores into 1-100 Impacts453Exponential rescalingScoresImpactsRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4383.2 Key examples of utilization and findings.criticality and RCFs can

187、be used in several manners for the decision making.This section provides examples published by Capgemini and the French National Institute for Circular Economy(INEC)for a selection of 15 low carbon technologies and 11 mineral resources.These examples can be extrapolated to any business,product line

188、or geography.a.Merit orders in Energy,Automotive,Construction:does my technology portfolio make my company future proof?Merit orders in EnergyHydrogen and electrification are the most challenging.Their higher criticality per kWh clearly state that they will be a challenge in terms of procurement,tec

189、hnology and social and environmental impact.Biomass and biogas are a more resilient choice when applicable and respecting biodiversity.F I G U R E 2 2Merit orders in Energy(c.criticality per kWh)H2-via Solar PVMerit orders in Energy(c.criticality per kWh)Solar PVMethanation(GAS)H2-via Offshore WindO

190、nshore WindOffshore WindH2-via NuclearCurrent French ELEC mixNuclearBiomethane(GAS)Biomass District HeatingPyrogasification(GAS)0250300350400450500RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 439Merit orders in AutomotiveIs

191、 going 100%electric in mobility sensible?Net zero biogas with Internal Combustion Engines vehicles(ICE)are three times less critical per km than Battery Electric Vehicles(BEV).Biogas is limited by potentials and respect of biodiversity;nevertheless,they are obviously part of the mobility mix of solu

192、tions,combined with the downsizing and sufficient use of vehicles and circular levers.Research and development to change chemistry and make lithium recyclable is a must have.F I G U R E 2 3Merit orders in Automotive(c.criticality per km)Vehicle share in dark blue,energy share in light blueBEV Batter

193、y Electric VehicleFCEV Hydrogen Fuel Cell Electric VehicleICE Green Gas Vehicle-100%farming methanisationICE Green Gas Vehicle-100%gaseous biomassICE Fossil Gasoline VehicleElectric bicycleMerit orders in Automotive(c.criticality per km)Vehicle share in dark blue,energy share in light blue0123456789

194、10RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 440Merit orders in Construction New build consumes resources but also artificializes natural spaces and hits biodiversity.High energy performance retrofit generate 40 to 70 times less cri

195、ticality per m,and even less with improved circular economy operations.F I G U R E 2 4Merit orders in Construction(c.criticality per m)NEW BUILD-Individual HousingNEW BUILD-Collective HousingNEW BUILD-CommercialRETROFIT-Individual HousingRETROFIT-Collective HousingRETROFIT-CommercialConcreteSteelAlu

196、miniumOthersMerit orders in Construction(c.criticality per m)RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 441b.Triple metrics:how do scenarios compare?New circular business requires additional investment compared to ruling Business As

197、 Usual.At short-term additional circular business partly cannibalize the conventional linear business.At long-term the growth of linear business is at risk because of the constraints and scarceness of resources.Circularity provides a greater business resiliency to the company.criticality are bound t

198、o rise due to the uptake of low carbon technologies and high-technology in the businesses of the company.Circular economy can shave this rise,as the Capgemini-INEC study has shown:the increase in.criticality shows up to a 75%difference between the Business As Usual scenario and the circular scenario

199、.Regarding tCO2,corporates engage in decreasing their emissions.They start with direct fossil energy emissions for stationary and mobility uses.The next frontier is reducing the use of extracted and transformed resources thanks to circular business.These savings generate additional CO2 savings.They

200、also drive reductions of the footprint on water,space usage,biodiversity,social impacts.F I G U R E 2 5Triple quantification of a corporate Circular Economy StrategyEuros(business)c.criticality(resources)Euros(resources)Tonnes(resources)WU Working UnitsActivity Today&3-5 future business scenarios(BA

201、U baseline,alternative scenarios)tCO2Business as usual scenarioCircular scenarioRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 442c.Product lines and resources:what is the exposure to risk in my Business As Usual scenario?Economic activ

202、ities span across a variety of resources and product lines.In Figure 26,the decision maker gets three different views,with rising stakes from left to right,applicable to resources in the upper line and to product domains in the lower line.The first view in tonnes per year show where the logistic cha

203、llenges lie.The second view in euros per year of resources included in the goods can be compared to the turnover of the company.This“resource intensity”expressed in Euros is somewhat like the“Energy intensity”.It gives an appraisal of the exposure to economic risk.The third view in.criticality per y

204、ear unveils where and with which magnitude the strategic,resiliency and environmental risks lie.Such complementary quantifications will help companies build accurate resource and circular strategies for their business.F I G U R E 2 6Triple metric resource requirement at the scale or an organization

205、or a country-here Frances low carbon strategy in a BAU circular scenario i.e.if economy remains predominantly linearSteelCopperCopperElectricVehiclesElectricVehiclesElectricVehiclesBuildings-New buildBuildings-New buildBuildings-New buildSteelSteelNickelNickelAluminiumAluminiumCopperOthersCobaltCoba

206、ltLithiumLithiumGraphiteGraphiteOthersOthersOthersOthersOthersGaseous biomassSolar PVSolar PVSolar PVOffshorewindOffshorewindOnshorewindOnshorewindOnshorewindElectricGridsHeat PumpsHeat Pumps52 Mt/yr52 Mt/yr5 B/yr47 B.crit/yr47 B.crit/yr5 B/yrConcreteConcreteConcreteAluminiumNet needs per resource(a

207、nnual average 2020-2050)Net needs per domain(annual average 2020-2050)RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 443Important conclusions can be drawn from the quantification we conducted for INEC on the French Low Carbon Strategy.T

208、hey are likely to translate to industries or companies.The qualitative analysis based only on 1-5 scores pinpointed the criticality of lithium,cobalt,platinoids,rare earths.But the triple metric analysis bear surprises:Volume effects on concrete&steel must be anticipated.Concrete and steel have a re

209、latively low criticality scores but high overall.criticality impact because of the large quantities required,notably by the construction industry for efficient buildings.Criticality is located close to the urban areas(100 km radius),as a result of the high number of quarries to be operated,doubled b

210、y the need for waste disposals for the deconstruction materials.Recycling,reusing and retrofit instead of newbuild can drastically cut volumes,CO2 emissions and impact on environment.Value effects to be noted for minerals&metals.Used in small volumes compared to concrete&steel,mineral&metal resource

211、s stand out in the second chart because of their high unit value(/t).Criticality is amplified for most minerals&metals,in con-junction with underlying drivers.Copper emerges as a major concern(1/3)of total criticality of the low carbon transition.The immense pressure on resources like copper can be

212、explained by small global reserves,low substitution potential and noticeable environmental impacts.Similarly,platinoids have a high criticality despite being used in small volumes.Lithium also stands out in the third chart despite the low volume&value effects due to the high demand coming from the b

213、ooming electric vehicles industry and its low recyclability.Therefore,electric vehicles deemed very desirable are the major challenge,with 2/3 of the total criticality.It is nearly twice as much as the 15 other key low carbon sectors that it entails(hydrogen,renewables,grids,construction,biomass,etc

214、.).RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 444d.Product lines and resources:what is the detailed breakdown of criticality in both scenarios?Cross-referencing the analysis between domains and resources helps identifying the hot po

215、ints and making priorities.Looking only tonnes and euros may hide the critical points for resources used in small volumes but cumulating high price and high criticality.In the example,circular scenario B saves proportionally more Cobalt than Platinoids net needs compared to Business As Usual scenari

216、o A.F I G U R E 2 7Net needs per domain in scenarios A and B(French 15 low carbon businesses,M.criticality per year)05,00010,00015,00020,00025,00030,00035,000Electric VehiclesHydrogen VehiclesHydrogen ElectrolysisHeat PumpsNuclearOnshore WindOffshore WindSolar PVElectric gridsDistrict HeatingDeep Ge

217、othermal EnergySolid BiomassGaseous BiomassBuildings-New BuildBuildings-RetrofitElectric VehiclesHydrogen VehiclesHydrogen ElectrolysisHeat PumpsNuclearOnshore WindOffshore WindSolar PVElectric gridsDistrict HeatingDeep Geothermal EnergySolid BiomassGaseous BiomassBuildings-New BuildBuildings-Retrof

218、itScnario AScnario BNet needs per domains(Million.criticality per year)LithiumCobaltPlatinoidsRare EarthsCopperGraphiteSiliconAluminiumNickelSteelConcreteElectric VehiclesElectric VehiclesLithiumGraphitePlatinoidsAluminiumCobaltSiliconRare EarthsNickelCopperSteelConcreteOnshore WindOnshore WindDeep

219、Geothermal EnergyDeep Geothermal EnergyHydrogen VehiclesHydrogen VehiclesOffshore WindScenario AScenario BOffshore WindSolid BiomassSolid BiomassHydrogen ElectrolysisHydrogen ElectrolysisSolar PVSolar PVGaseous BiomassGaseous BiomassHeat PumpsHeat PumpsElectric GridsElectric GridsBuildings-New Build

220、Buildings-New BuildNuclearNuclearDistrict HeatingDistrict HeatingBuildings-RetrofitBuildings-RetrofitNet needs per domains(Million.criticality per year)RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 445e.What new balance sheet to measur

221、e the progress of my business?Circular flows,gross and net needs,and waste.Gross material needs,required for production of goods,are provided by both circular flows(“Reuse”and“Recycle”),and net needs supplied by newly extracted resources from mines.Gross waste from products end-of-life,are partly re

222、used in circular flows,while remaining incompressible waste(net end-of-life)will be disposed.Triple metrics applied to the 16 CBS opportunities can be synthetized in the global resource balance sheet of the company.The Figure 28 shows the gains of the activation of CBS opportunities(scenario B)versu

223、s the Business As Usual baseline(Scenario A)In BAU scenario A,the construction of equipment planned by the low-carbon strategy(vehicles,energy facilities,networks,new buildings and energy-efficient renovation,etc.)implies a 21%increase in gross materials needs by 2050.This might not seem shocking ov

224、er 30 years,but over the same period costs of resources will triple,and their.criticality will be multiplied by 8.110.In circular scenario B,avoid and reduce CBS alone induce a 44%decrease in gross resource needs,and a 14%decrease in gross end-of-life deposits.This relieves by the same amplitude the

225、 pressure on ecosystems caused by extraction and waste respectively.10 And even by 20.7 for metals aloneIf the transition towards a circular economy is not undertaken promptly and vigorously,criticality will be multiplied by 6.1.The implementation of the BAU strategy would then be thwarted,not to sa

226、y impossible.By contrast,by reinforcing circularity,France would be able to achieve its low-carbon strategy objectives,limiting the increase of net criticality to a factor of 1.5 relative to 2020,i.e.75%less in net needs and 73%less in net waste.RACES:Resources Awareness and Circular Economy Strateg

227、yEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 446F I G U R E 2 8Global resource balance sheet BAU scenario A and circular scenario B combining all metals and minerals required by 15 sectors of the French low carbon transitionANTICIPATE&MAINTAINPROCUREMENT BREAKDOWNEND-OF-LIFE BREAKDOWNMAT

228、ERIALS PHYSICALLY CYCLED THROUGH THE LOOPSMINESWASTE DISPOSALEND-OF-LIFEREUSE&RECYCLEGROSS WASTENET WASTENET RESOURCE NEEDSGROSS RESOURCE NEEDSScenario B vs A-44%kTMMC-35%-37%Scenario B vs A-44%11%89%30%70%74%26%kTMMC-35%-37%Scenario B vs A+47%kTMMC+38%+59%Scenario B vs ATODAYAB-60%kTMMC-64%-75%Scen

229、ario B vs A-39%kTMMC-59%-73%Scenario B vs A-14%kTMMC-14%-14%46%54%46%54%85%15%TODAYABRACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 447f.How will the CBS opportunities reduce my exposure?In the example provided,the avoid lever provides

230、more savings than the reduce lever.Circular scenario B includes more shared vehicles.The vehicle mix is no longer 100%electric or hydrogen,as there is a share of internal combustion engine with biomethane.Some minor additional progress is made in the proportion of end of lives recycled.Reuse is doub

231、led.The gross need in resources for the production of goods is cut by 25%,and the net need in resources coming from mines and extraction is cut by 45%.F I G U R E 2 9Savings enabled by Avoid,Reuse,Reduce,Recyle on Gross and net needs in Circular scenario B compared to BAU scenario A(French low carbo

232、n transition,focus on 9 electrification domains in hydrogen,low carbon electricity and transport.criticality/year0200040006000800040001600018000Sc.A-Theoretical Gross NeedSc.A-Gross NeedSc.A-Net NeedSc.B-Theoretical Gross NeedSc.B-Gross NeedSc.B-Net NeedCircular Economy-Annual NEEDS-Compa

233、rison of scenarios A&B for:Total Electrification Theoretical Gross NeedGross need supplied by REUSEGross need supplied by RECYCLEREDUCEAVOID&MAINTAINRACES:Resources Awareness and Circular Economy Strategy4804IMPLEMENTATION AND TRANSFORMATIONThe transition is impending:inspiring examples.RACES:Resour

234、ces Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4494.1 Major strategic stakes&tangible implementation examples for a few handpicked industriesEach company or industrial sector deserves to be gone over with a fine-tooth comb to extract precise and ac

235、tionable insights for CxOs,based on their operational&supply environment,material resources,data and strategic objectives.We have inferred resource-criticality related stakes at a macro-level for four industrial sectors.Here are the main disruptions to expect,and inspirations to tackle them.a.Transp

236、orts:resource-criticality is heightened by the massive move for electrification The automobile industry is subject to a strong electrification trend,which exacerbates the demand for critical resources contained in batteries,especially lithium,cobalt and nickel.The criticality of these resources will

237、 soar imminently,and so will their market prices.Eventually,other use cases with a lower willingness to pay on the end-consumer side will have to resort to alternative materials or reinvent themselves entirely to survive.Explosive growth&standardization exacerbate criticality on key resources.In the

238、 rush to conquer the gigantic emerging market of electric cars,brands converge towards the same Li-ion technologies.This is reinforced by the need for standardized solutions:e-car manufacturers are urged to build a cross-brand network of vehicles and infrastructure for optimized convenience and scal

239、ability potential.The rapidity of this convergence pulls the rug from under R&D efforts to find alternatives,like sand-based batteries.Substitution of critical resources,which feeds into the reduce CBS(#2),is however more necessary than ever.In a circular model,complementary players can team up to c

240、reate new materials and components.For instance,Volvo Group and SSAB have signed a collaboration agreement on fossil-free steel,using hydrogen11.Automotive players are starting to implement circular initiatives.All loops of the circular model can be implemented in the automotive sector,and initiativ

241、es have already bloomed.Embracing the shared economy(CBS#3),Renault experiences a business model based on mobility-as-a-service rather than ownership with its initiative Mobilize12.Renault Flins factory,launched in 2020,is dedicated to car refurbishment.Furthermore,in line with CBS#12,collect,#15,re

242、cycle,and#8,remanufacture,Renault,Solvay and Veolia launched a combined initiative to collect used batteries and turn them into new ones13.Implementing several business segments of the circular economy is a chance for re-industrialization and relocation of industrial activities.Stellantis sees it al

243、so as an accretive business14.In October 2022 Stellantis announced a comprehensive plan for its Circular Economy Business Unit to achieve more than 2 billion in revenues by 2030.One of the brands of Stellantis,Citron,has developed a concept car named OLI all-15,as a nod to the AMI car,the small 11 h

244、ttps:/ https:/ https:/www.largus.fr/pros/actualite-automobile/renault-forme-un-consortium-pour-le-recyclage-de-batteries-10570404.html14 https:/ https:/ older sister developed with Capgemini Engineering.OLI explores end-to-end circular concepts with a rigorous,360-degree approach based on the 4R str

245、ategy reman,repair,reuse,and recycle.Within the product it includes simple,intuitive and joyful approaches experimented in AMI such as identical parts for left and right doors and for front and rear central bumpers,or lightweight roof flat bed panels made from recycled carboard and plastic formed in

246、 honeycomb structure;AMI also explores the manufacturing concept,with the possibility to remanufacture new cars with reused parts of end-of-life OLIs,leading to a full life duration of up to 50 years.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTE

247、R 2CHAPTER 450b.Construction:accelerating the penetration of circularity drivers requires large-scale design projects at all stages of the value chainCriticality in construction is driven by volumes.With its monumental demand of raw materials(concrete,sand,steel,aluminum,copper),energy(furnaces,tran

248、sportation,.),and significant social&environmental impact,notably on biodiversity,the construction industry is both driver and victim of soaring resource-criticality.For France,our research evaluated the criticality score of the construction sector to 2.3 out of 5(2.8 aluminum and 2.0 on steel/concr

249、ete).Yet,the size of the tonnages involved in both construction and deconstruction,mainly in the periphery of large urban areas,make circularity a very urgent issue for all involved players.It also shows that about 20 million tons of resources16,i.e.half of the tonnages,could be avoided by making st

250、rong strategic choices in favor of renovation and circularity.The industry is already facing tensions from all sides:supply,regulation,Although aggregates are abundant,raw material demand keeps sustained,and lead to localized concrete shortages putting construction sites under pressure down the line

251、.In addition,regulation is progressively governing building activities beyond GHGs emissions,for example framing land restoration and waste management.16 https:/ CBS are relevant,but pose serious implementation challengesIn the building industry,regenerating sites(#16)is particularly important,since

252、 quarries,former building sites,etc.must be brought back to healthy states for biodiversity and human populations to thrive.In waste management,collect(#12)and disassemble(#13)show great improvement potential but also implementation challenges:Since constructions are not standardized and have a 40+y

253、ear long life span,large-scale components reuse entails that easy dismantling will have to be part of the early-stage design process.Similarly,maintenance management solutions,usually BIM-based(Building Information Modeling)help optimize resource use in the construction phase.Distribution networks w

254、ill need to intertwine points of sale&collection,ideally operated by different distributors to densify the grid.Whether existing or new entrants,players need to consider the service space,even if it means introduc-ing new business models:Les Ripeurs,is a successful circular-ity waste management serv

255、ice.Inspired by leasing services,some players might start selling lifespan or usage instead of material goods.All players involved in the construction value chain,from financing&commissioning to property,maintenance,and end-of-life,need to make resource-constrained eco-design a top priority and to w

256、ork hand-in-hand with local partners.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 451c.Equipment&High-Tech:hardware producers and retailers(tech,appliances,machines,)players are facing a paradigm shift from mass-market and single-use

257、to component circularityThe rise of reuse,refurbishing and remanufacturing platforms such as Backmarket or Asgoodasnew can be observed for electronic devices,as well as PAAS and sharing models in the household industry or circular reuse of plastics in the retailer industry.Like other CPRD industries

258、,hardware providers aim to meet the ever-growing demand of consumers,juggling high volumes and optimized prices.This typical linear model is squeezed between their high dependence on raw materials on the one hand and a calamitous impact of waste on the other.Many workers are exploited in developing

259、countries,natural environments are polluted,and transportation on international value chains causes incremental CO2 emissions besides production processes.Hardware retailers are an excellent example of the direct-reverse duality of the CBS.As they deliver (e.g.mattresses or home appliances),they col

260、lect the discarded ones(CBS#12).These first steps must be followed by additional circularity initiatives,more ambitious yet more challenging.In strong consumer-facing industries like food and beverage or cosmetics,circular solutions are often antagonistic towards convenience or accessibility and wil

261、l automatically slow down consumer adoption,or even drive consumers away.As a consequence,it is crucial that hardware players find the right balance between the consumer behavior gap and education opportunities to push new habits forward and overcome consumer-adoption barriers.New sub-products are o

262、n the march.A slight relocation trend has started,which,on a large scale,will highly impact their costs and question the entire mass-market business model,thus their value proposition and market positioning.Symbiotic operational relationships with other up-and downstream players might provide opport

263、unities to restrain price surges on raw materials.The trend of sufficient products(#2 reduce)is growing,driven by growing consumer awareness:ex-telephones without ancillary functionalities or that are restrained to essential functions.Finally,tackling less common CBS,some players are starting to exp

264、eriment with component products(#5,#14),which will likely take off in the hardware segment,where components have a high potential of value retention given their technological complexity(compared to packaging)or the value of basic components.Philips has introduced a hairdryer compatible with replacea

265、ble parts,Fair Phones facilitate value retention CBS compared to traditional brands.As many consumers are increasingly questioning the impact of CPRD and demanding that brands take responsibility,tackling resource criticality by bringing circularity to the next level is urgent.Prices for major and s

266、mall domestic appliances(SDA/MDA)may have to increase,while the high-end segments could lead others in their transition:having a greater financial leeway to experiment with new business models,they have the opportunity to make re-source-less consumer patterns desirable.RACES:Resources Awareness and

267、Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 452d.Mines and Waste:extraction and first transformation industries and waste managers seem about to be left on the sideline by the advent of large-scale circularity but have in fact a lot to gain in it.Mining&first tra

268、nsformation industries would see their business decline in a sustainable limited worldAs the starting point of linear supply chains,they will be at the forefront of resource depletion issues.In addition,governments of countries where reserves are located are likely to leverage their advantage to sec

269、ure their national supply,and to impose their rules on foreign trade,for instance raising taxes on foreign firms exploiting their reserves.Conversely,countries that do not have resources buried in their territory also need to secure their supply.Relocating resource access is for them a paramount pri

270、ority.This is where mining&first transformation players have a trump to play.Those who have progressively expanded their activities to other continents over the past decades have a major opportunity to impulse a re-industrialization trend.One option is to initiate new extraction projects locally,eve

271、n though it will initially face opposition on the grounds of social and environmental impacts,as observed recently for lithium extraction projects in Europe17.With waste managers,they have an opportunity to capitalize on their experience of handling and transforming raw materials to enter the recycl

272、ing business.With their valuable knowledge of materials&transformation processes,they could seize many opportunities in a global move towards circularity:17 https:/ efficient&scalable recycling processes.Become the agnostic industry referencing materials,providing quality assessment services and def

273、ining new norms to help players choose the right material for their respective use cases.Indeed,second life and sell-resell CBS(#4)do not require the very best quality of material(though they demand it currently),opening up a space for sufficient materials for each application,and directing high-qua

274、lity or even freshly extracted materials only to use cases that truly require it,thereby alleviating the stress on critical resources.An agnostic role to facilitate cross-industry collaborations,but a risk to become competitors.At the crossroads of many industries,their guidance&expertise is very va

275、luable and could help them become builders of industrial symbiosis networks between supply chains in different industries working with similar resources.Their convergence to similar roles might require both industries to choose more specific value propositions,relying on differentiating assets.RACES

276、:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4534.2 All CXOs and their departments have a role to play in circular business.Circular business drives changes in the companys economic and operational models,along with the coordinated mobiliz

277、ation of all its functions:strategic management,product and service marketing,design offices,process teams,logistics and customer marketing.A bottom-up approach is a start but is not enough to germinate a large-scale change.e.Eco-design,a transformative approach of products,services,as well as corpo

278、rate strategy.Eco-design aims at designing a strategy,products,or services by anticipating the impacts and opportunities over their entire life cycle.Ecodesigning products and services requires the coordinated mobilization of customer marketing,product design,process engineering and service teams.It

279、 challenges the whole designing process to reduce the amount of critical resources(CBS#2 Reduce),to create products that can be easily repaired,refurbished,remanufactured(CBS#5,#7,#8)with higher shares of materials from circular origin or substituted with biomaterials(#CBS#9,#10,#11),sometimes speci

280、ally designed for shared economy(CBS#3),and easily disassembled,repurposed,recycled(CBS#12,#13,#14,#15).This shift generates exciting challenges regarding early-stage functional,technical and aesthetic dimensions of design.A careful end-to-end eco-design leads to less resource needed for each unit o

281、f final usage by the customer.Eco designing the corporate strategy involves the strategy,the finance,and the marketing departments.It leverages the highly strategic#1 lever,“Avoiding”,which can be seen as an adaptation to resource of the statement of Sun Tzu in The Art of War:“He who excels in solvi

282、ng difficulties does so before they arise”.The eco-designed strategy considers the resiliency of business,the carbon challenge and the resource constraints in anticipating problems at different levels of corporate decisions:technology portfolios balancing high-tech and so-called low-tech,product por

283、tfolio from sufficient attractive products to high-end products,business model portfolios moving from product to service provision,corporate M&A,investing in resource resilient businesses and divesting from activities at risk.The financial profile,including investment,risk,ROE ratios may progressive

284、ly change with the evolution of business models,and thus require explaining and validating the strategic moves with the shareholders and markets.Avoiding also includes deliberate communication and education activities targeting at large scale customers,employees,and partners.The objective will be to

285、 change their perception on resources and circular economy,to prefer long lasting products,to make more desirable the shift towards being served rather than bearing ownership,to parallel the reduction of the use and the size of the products with a deeper and improved sense of satisfaction.Eco-design

286、 transforms the way products and services are delivered,the way revenues and margin are generated and ultimately the company itself.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 454f.Operations:Onward and reverse circular operations in

287、 the field requires the COO to plan and run coordinated central,local and onsite activities.Building a circular economy means tying together a network of actors and physical flows,within sectoral value chains,and between different sectors operating in the same territory.The new“Maintain and Retain”o

288、nward circular businesses are somewhat close to the existing operations of the companies(Cf Figure 15,Circular Business Segments matrix).The change of scale nevertheless requires significant adaptations of the operating model of the company,for the activities spanning from onsite interventions to lo

289、cal facilities up to central industrial sites.The new operating model must carefully organize at each scale the repairing,retrofitting and remanufacturing operations.The industrial process itself evolves,with components and parts from more heterogeneous origins,wider tree of next operations in the p

290、lant floor and stronger need for traceability,as discussed in further section devoted to Digital.On the opposite,the new“Recover”reverse circular businesses shown in Figure 15 are more distant from the usual operations of the industry and closer to the activities of the waste operators.But for strat

291、egic reasons regarding brand value,business growth and adaptation to the future resource constraints,the company may decide to increase its control on collecting,sorting,and repurposing spare parts,and even recycling must-have materials.These activities may be controlled through direct insetting18,o

292、r through joint ventures and other forms of partnerships,under closer control from the parent brand.The COO and its teams will be in first line to organize,deliver and control these new operations.18 For instance,Schwarz Gruppe,the largest retailer in Europe(LIDL,Kaufland)has created a dedicated bra

293、nch called PreZero in order to be“in the drivers seat”.PreZero hosts plastic recycling plants and handles recycled material passing through its 13,300 stores globally.In between onward and reverse operations,the logistic master plan will have to integrate the new flows at the central,local and end-p

294、oint scales.The loops and flows of materials can take place between companies from different fields but requiring the same materials,or between companies when one can exploit the others by-product or waste,at large or even better at a territorial scale.RACES:Resources Awareness and Circular Economy

295、StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 455g.Procurement is deeply impacted as materials flows and services change in nature.The procurement department is directly involved in forecasts and purchases for at least three of the CBS:use&source repurposed components,use&source re

296、cycled materials,use&source regenerative biomaterials.F I G U R E 3 1Impact of the implementation of the global circular economy strategy of the procurement departmentFROM1.FORECASTING NEEDSEnd-of-Life waste1.What theoretical resources needs are derived from the business plan?3.What gross needs to b

297、e procured,whatever their origin?4.What share to be sourced from reused components and recycled materials?5.What net needs remain to be procured from extractive resources?What residual criticality?2.What part of needs will be avoided or reduced due to strategic mix(products vs services,shared econom

298、y)and technical levers(ecoconception,IR&D)?6.Sourcing:what is the end-of-life internal potential for Reused components and Recycled materials?7.How much recycled and reused goods to be internally sourced?To be externally procured from circular suppliers?Reuse&RecycleGross needsGross End-of-LifeNet E

299、nd-of-LifeResource needs2.SOURCINGLINEAR EXTRACTIVESUPPLIERS3.PROCURINGLINEAR EXTRACTIVEGOODSTONet needs(imports)8.How much residual waste to be sold or to be disposed?The Figure 31 lists the new challenges for the CPO through the angle of the end of life and needs flows.Sourcing the new flows can b

300、e done internally across the entities of the group(operations,reverse logistics back from customers,geographies)or externally from partners inside the same industry or from other industries,with trade-offs to be done between cost,impacts and distance.For this reason .criticality becomes a new metric

301、 to be inserted in the procurement criteria and data,along with price and CO2.,and more qualitative criteria as supply resiliency.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 456h.Digital:CDOs shall catalyze traceability,insurability

302、and cost competitiveness in complexified circular operationsDigital will be instrumental for circular business at 4 levels B2B platforms enable the large-scale circular trade of disassembled,repurposed and recycled goods,as well as second life products,connecting stakeholders and orchestrating physi

303、cal flows along the same vertical sector and horizontally at the scale of local territories.B2C platforms support selling shared services,second life products,repairing services or collection of end-of-life products with creative value models.Computer-aided eco-design is strongly needed to better an

304、ticipate all the steps of product life,from#2 to#16 BCS,i.e.from cradle to cradle.Digital operations:circular operations are potentially more complex as they are less standard than linear manufacturing.Digital has a key role to improve their cost competitiveness and automate them,be it in central or

305、 local plant floors as well as in mobile operations on customer premises.Drones,3D scanning,state recognition and computer aided next operation,augmented operator tools(robots augmented reality,exoskeletons,robots)could help workers or technicians perform complex and arduous tasks seamlessly,for ins

306、tance in(de)construction for onsite dismantling and sorting,or in electronic goods such as smart phones repurposing plants.Last not least:Traceability and insurability.An important barrier to circular economy adoption in automotive industry,in buildings,in B2B equipment is the uncertainty on the sta

307、te and origin of the second life components incorporated in the product.Improved traceability along the whole value chain(NSP#2 to#15),individual information gathered in the Digital Product Passports,as well as statistical return of experience will also be key to improve the insurability of circular

308、 equipment,which is a barrier for wider adoption.This information is also useful for improving the maintenance and repairability and extend the life of such products.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTIONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 457F I G U R E 3 2Digit

309、al levers mapped against the 16 circular business segments(CBS)Digital forCircularResourcesB2C PlatformsComputer aided manufacturing processB2B PlatformsAI for scrap reductionComputer aided product designMobile operations digitalizationIOT,radio&optic tags,sensors&actuatorsBlockchain3D scanningAI fo

310、r recognition,state diagnosis,next op recommendationAugmented operator,advanced robots,dronesExtended enterprise operations(out-sourced controlled activities)AI,satellite and aerial imagery forenvironmental assessment and monitoringTraceability/Product digital passport /Asset Digital twin/3D continu

311、ity1.AVOID2.REDUCE3.SHRED ECONOMY4.SECOND LIFE/RESELL5.MAINTAIN/REPAIR6.MARKET PLACE7.REFURBISH/RETROFIT8.REMANUFACTURE9.Use&source REPURPOSED COMPONENTS10.Use&source RECYCLED MATERIALS11.Use&source REGENERATIVE BIOMATERIALS12.COLLECT-SORT13.DISASSEMBLE-SORT14.REPURPOSE COMPONENTS15.RECYCLE MATERIAL

312、S16.REGENERATE SITES#1#2#2#2#2#2#2#3#3#4#4#4#4#4#4#4#5#5#5#5#5#5#5#5#5#5#6#6#6#7#8#9#10#11#9#10#11#7#8#7#8#7#8#7#7#8#9#10#11#7#8#7#8#9#10#11#7#8#7#8#9#10#11#6#5#12#12#12#12#12#12#12#12#12#13#13#13#13#14#15#14#15#13#14#15#14#15#13#14#15#14#15#13#14#15#14#15#13#14#15#13#14#15#13#14#15#13#14#15#16#3#3#

313、3#3#3#3#1#1ANTICIPATERETAINMAINTAINRECOVERRACES:Resources Awareness and Circular Economy Strategy58Capgeminis value propositionSecure the future of your business,develop a resource and circular economy strategy at scaleWith our RACES approach,we help you assess your business vulnerability regarding

314、resources,identify opportunities,de-sign a consistent global corporate strategy,strengthen your performance and resilience on the three business,climate and resource dimensions.Bring circular economy to life,implement your business opportunities in the field,transform the companyCapgemini Invent,wit

315、h its specialized design entities such as Frog,Synapse,Cambridge,Possible Future,and Capgeminis branches Engineering,Applications,Technology,and Opera-tions deliver end-to-end service to implement five families of circular projects covering a world of possibilities.We help you transform and diversif

316、y activities and business models in the field,extend eco-design principles,engineer your products,build and run operations and develop local synergies and cooperation with other players.Quantify,assess the existing situation,monitor progressWe have a variety of tools and quantified methodologies to

317、support your progress:RACES resource criticality factors,company maturity assessment tools checking the“what”and the“how”(AWS Capgemini partnership),detailed product portfolio vulnerability down to LCA,products circularity mea-sure through MCI(Material Circularity Indicator)of the Ellen MacArthur fo

318、undation,PCI(Product Circularity Indicator)by Bracquen,NCI(Nano Circularity Indicator)by Capgemini Engineering,and much more adapted to your specific needs.1.CIRCULAR SOURCING2.CIRCULAR PRODUCTDESIGN 3.PRODUCTAS-A-SERVICE4.PRODUCT LIFE EXTENSION5.WASTE REVALORISATIONBUSINESS MODELDESIGN&ENGINEERINGO

319、PERATIONSPARTNERSHIPSRACES:Resources Awareness and Circular Economy Strategy59Connect with our industry&circularity experts now!New Sustainable Platforms,RACES Circular Economy,New Sustainable Offer group leader Intelligent Industry,Capgemini Invent Circular Economy,Capgemini Invent Capgemini ECapge

320、mini brings together talents from every area of expertise to deliver end-to-end assistance to our clients.Our brands cover every industry and service line,from design to engineering.Capgemini Invent is the Groups digital innovation,consulting,and transformation brand that helps decision-makers desig

321、n and build the future of their organizations.We provide services to corporate leaders that are dedicated to shaping the future,by developing strategies,products,services,experiences,and business models for sustainable growth.RACES:Resources Awareness and Circular Economy StrategyEDITORIALINTRODUCTI

322、ONCHAPTER 1CHAPTER 3CHAPTER 2CHAPTER 4About CapgeminiAbout Capgemini Capgemini is a global leader in partnering with companies to transform and manage their business by harnessing the power of technology.The Group is guided everyday by its purpose of unleashing human energy through technology for an

323、 inclusive and sustainable future.It is a responsible and diverse organization of over 340,000 team members in more than 50 countries.With its strong 55-year heritage and deep industry expertise,Capgemini is trusted by its clients to address the entire breadth of their business needs,from strategy and design to operations,fueled by the fast evolving and innovative world of cloud,data,AI,connectivity,software,digital engineering and platforms.The Group reported in 2021 global revenues of 18 billion.Get the Future You Want|