Page 100 - Finanancial Management_2022

LEARNING RESOURCE

significant greenhouse-gas-reducing
impact over decades. Additional
environmental impacts in transporting The Circular Economy
the batteries need to be taken into Learn how the depletion of finite resources is prompting
account, however. organisations to reconsider their business models. Explore

Scenario 3: Infinite cycle of use? different types of circular business models to see if any fit
your business.
In theory, batteries can be
remanufactured indefinitely, allowing COURSE
multiple opportunities for payback and
keeping the battery out of a landfill. In
practice, there will be a need for
additional materials, with potentially
high levels of environmental risk of scarce resources. The second strategy is resources. There are many other products,
associated with battery remanufacture. to minimise the negative impacts at all services, and resources where circular
However, research indicates that stages of the value chain. design principles can help businesses
remanufacturing is substantially less This form of modelling can identify contribute to the development of more
damaging environmentally than the strategic intervention points. For sustainable communities and natural
original manufacturing. (See the example, the reputational capital of the systems. ■
“Scenario 3” graphic.) whole value chain could be impacted if it
In this scenario, there are numerous was uncovered that there was extensive
opportunities for payback, but they use of forced child labour in the mining
require additional costs and have of raw materials for the battery. It follows
additional impact. Therefore, it is that removing these practices would
important to evaluate the net benefits benefit all in the value chain. It is
from each use-remanufacture cycle. important that the costs of forced labour
Decisions as to how and where the and the benefits of its removal are
batteries are remanufactured are critical reflected in the price paid for
to the overall sustainability of the components.
transition to EVs. Circular economy thinking provides Resource
greater visibility of critical reputational Report
Strategic intervention risks and their associated costs or
These scenarios demonstrate that benefits. It also uncovers new Governance Introduction: Putting the
sustainable benefits from the opportunities for value creation and cost G in ESG
consumption of goods and services will saving through more efficient use of
inevitably necessitate negative impacts
somewhere in the world. Therefore, we
need to consider two strategies. Ian Thomson, ACMA, CGMA, is professor of accounting and sustainability and
One is to optimise the sustainable director of the Lloyds Banking Group Centre for Responsible Business at the
benefits through the use and reuse of University of Birmingham in the UK. To comment on this article or to suggest an
these goods and services to compensate idea for another article, contact Drew Adamek at Andrew.Adamek@aicpa-cima.com.
for any damage incurred from extraction

Scenario 3
Mining Components Vehicle Logistics Car Remanufacture Car Remanufacture Car Disposal
manufacture use #1 use #n use

Environmental
impact
Industrial health
and safety
Air pollution
Carbon emissions
Water pollution
Forced/child
labour

FM-MAGAZINE.COM June 2022 I FM MAGAZINE I 23