Should the Danish furniture industry be the world circular economy leader?

Should the Danish furniture industry be the world circular economy leader?

If yes – how can we earn that distinguished title? In this post, Betina Simonsen, CEO of Lifestyle & Design Cluster, tells us how she thinks Denmark’s furniture brands can take first place in the circular economy race.

According to a survey conducted at the end of 2018 by Lifestyle & Design Cluster in collaboration with Copenhagen Design Agency for the National Circular Economy Hub, when asked:

  • 35% of furniture companies said they work with a circular economy.
  • 62% said that within the past two years, they have made an effort to reduce the volume of waste in their production.
  • 40% said that they use recycled materials in their production.

Overall, this indicates an interest in circular economy in the furniture industry. Several companies see a potential and are already in the process of testing circular business models on one or more product lines.

How do you make the transition to a circular economy?

A complete transition to a circular economy is demanding for the individual company. It often requires complete restructuring of design and production processes. This is difficult for small and medium-sized firms, as it requires significant resources and insights into the most efficient and financially feasible approach.

It can be difficult for a small company to make demands on their bigger suppliers or to find the right partners who are also interested in circular economy. New manufacturing methods and circulation of materials may require companies to renew or expand their documentation of the environmental impacts. Development and subsequent approval of these changes in production can be costly.

Changes to legislation on waste and secondary products may help underpin the market for products based on a circular economy. At the same time, it will improve security of supply and availability of resources, which can otherwise prove difficult to source.

Two pull factors

In other countries, which have also embraced the circular economy, such as Sweden and the Netherlands, a number of initiatives have been launched to help break down the barriers that can be difficult to surmount with the advent of new circular economy business models.

There are two pull factors which may make it more interesting for the furniture industry to devote resources to the circular transition. One is to make it clearer to the end user how and where the company has chosen to reduce its furniture consumption in their sustainable transition. There is as yet no common certification that can be easily communicated to the end user.

The other pull factor is public tenders and procurement. By stipulating circular procurement requirements, the public sector can help drive the market forwards and provide greater assurance that there are customers for furniture created according to circular principles.

The triple bottom line

If Denmark is also to have a sustainable furniture industry in the future, it is vital that we create value with the triple bottom line and strike a healthy balance between the financial, the social and the environmental aspects.

With growing pressure on global resources, efficient utilisation of resources is increasingly becoming a competitive parameter as well as a means to achieving financial savings. In addition to the value created through resource efficiency, this presents an excellent opportunity for companies to differentiate themselves in the market. As demand for the circular agenda increases with the big companies, public-sector procurement and consumers, there are prime opportunities for those Danish furniture manufacturers that have tested and identified the circular business model or models that add to the triple bottom line.

The future looks bright

In Denmark, we have a very strong furniture industry, which is a hallmark of such Danish values as high functionality, accountability, great design and quality. Respecting the planet’s resources and making the transition to utilise them more efficiently is fully in line with the values we already embrace today.

It is therefore fantastic to see the many interesting case stories about companies that have already come a long way and are profiting from new, circular business models. In our report, you can read about several of the enterprising companies that have embraced the circular economy, how they have benefited and the challenges they have faced.

Of course the Danish furniture industry should be the world circular economy leader. And we can achieve this by working together, experimenting more and, not least, ensuring transparency and demand, making it all rewarding – also on the bottom line.