Article

27.04.2018

Progress towards the circular economy

Generally speaking, companies have strategies, structures and operations that remain entrenched in the linear economy. But is this still tenable? Here are five business models to help you think circular.

Today, it is no longer enough to invest in sustainable development here and there. Natural resources are becoming depleted and the environmental impact so serious that we can no longer be satisfied with doing things "less badly" than in the past. Companies are now expected to make a positive impact by breaking the link between growth and the use of natural resources. 

The head of any company that claims to be responsible will be curious about the opportunities for growth that will present themselves if they do things differently, and wonder about the environmental, social and societal benefits (aside from financial) that they could generate using their own resources, technology and time frames.
To produce a positive impact, companies will need to free themselves from linear thinking before they can embrace the circular economy. They probably also have to reconsider their value chain, though they will not be able to do so overnight. In their quest for inspiration and greater momentum, some have been quick to emulate innovative SMEs. 

How can transformation occur, what are the priorities and where do we start?

An analysis of 120 cases carried out by Accenture drew out five business models representing the same number of approaches to the circular economy.

Introducing sustainability in the supply chain

The first potential way to change your business model involves modifying the choice of raw materials used to make the product. This entails looking for alternative, renewable materials by adapting the supply chain upstream in order to achieve the long-term goal of a sustainable product and a process that is ideally waste-free. For example, industrialists can replace plastic, a linear component, with bioplastic or another material that is renewable or can be recycled. Ecover is the best example to cite in this respect: by introducing a sustainable chemical ingredient when it launched the first phosphate-free washing powder in the 1980s, it reduced the demand for toxic and non-recyclable substances. It has since expanded its business to produce a vast range of products.

The same approach can be taken downstream in the production chain. An excellent illustration of this is Sigma: in the knowledge that our homes are generally full of toxic products, Sigma marketed the first paint that purifies the inside air.

Recovering rather than producing 

Among those inspired by this second model are certain carpet manufacturers including Desso and Interface, who are switching to 100% recyclable products. The challenge for them is to maintain contact with customers in order to recover their carpets as cheaply as possible when they are no longer needed. For carpets with an aluminium backing (a pure product that is easy to recycle), the companies may even need to make contact 20 to 30 years later and put in place a reverse supply chain.

What are the other challenges for carpet manufacturers who wish to recycle the potential residual value of their products? One is not to destroy the item during recovery. This is why Desso invented Refinity, a technique enabling it to separate the fibres – from the thickest to the finest. At the end of the purification stage, a new carpet can therefore be manufactured from the old one using their Cradle to Cradle® technique. This process significantly reduces the amount of resources used and waste generated. It allows the product to be reconstructed without the need for new ingredients, closing the circle with almost zero waste.

Quentin Denis, from Accenture, says: "This choice to recover waste materials can produce surprising results, such as the metamorphosis of a mining company with processes that were 100% linear into the number one defender of recycling technical materials. This is the way in which Umicore drastically changed its core business to move from extractive mining to what is known as 'urban mining'. DSM is another mining company that has completely transformed itself to become what it describes as a manufacturer of circular products."

What is waste to some can become an ingredient for others. In other words, there is a different way to close the circle in a way that bypasses waste. For Engie, this meant establishing operations in close proximity to ArcelorMittal in Ghent so that it could transform all steam produced – wasted energy in theory – and feed it back into the electricity network. Another example from Switzerland is IBM, which transforms the hot air produced at its centre in Uitikon into hot water for the local public swimming pool. The company says the volume of heat produced can heat the equivalent of one swimming pool or 80 houses. 

To sell or lease? When obsolescence becomes taboo

Product-service systems, whereby a company prefers to sell its product as a service, are now in vogue. This third business model can occur alone or in conjunction with other concepts currently also emerging, such as the shared economy or the hub economy. But they can all operate in isolation, and confusion awaits the uninitiated.

An excellent example are the product-service systems operated by Rolls Royce, which has been producing turbines for aeroplanes and leasing them to airlines since the 1960s. How does Rolls Royce benefit? According to Quentin Denis, they "retain the right to carry out maintenance, allowing them to derive an additional source of revenue and improve performance. By leasing products instead of selling them once, they make their revenue more predictable because aeroplanes fly for decades. What really stands out is that this completely changes their focus on quality since they are concerned to ensure long-term performance in order to avoid breakdowns, for example", Denis continues. Which is one way for companies to turn their backs on built-in obsolescence...

The shared economy frequently illustrates that it can boost revenue insofar as it multiplies the number of users who can access an asset that is under-utilised. 

The hub economy: fighting against waste

Using an app to share information about a provider's excess capacity or to allow users (private or professional) to publicise an under-utilised product or service is the concept underpinning a further model based on the hub economy.
Lyft, a resource for sharing lifts in motor cars, was born from the observation that 80% of seats in urban vehicles are empty. Thus the app allows a user who needs transport to identify the vehicle of another user exactly when it is needed. The journey is paid for via the app and costs 20 to 30% less than a taxi, including the commission of 20% paid to Lyft.

The bicycle delivery service Deliveroo is another example. It allows restaurant kitchens to exploit their surplus capacity and to add a new facet to their business – home delivery. This then provides an additional source of revenue despite limited human resources in their restaurants. This idea can also be found in the logistics sector in relation to online hubs set up in order to share lorry capacity and prevent vehicles from returning empty.

Quentin Denis is in favour of the concept, providing its stated aim is to achieve a positive impact for all actors involved: "These hubs operate via a network effect", he says. "This is achieved when there is significant volume, both in terms of offer – service providers, owners of Airbnb properties or Uber drivers, for example – and demand from holidaymakers or passengers. This network effect gives the players a strong competitive advantage that they can potentially abuse to change the rules of the game overnight, increase commission or reduce earnings, for example." 

Products with longer lifespans

Components lost to the linear process once worn out can become useful again: this is the principle that motivates the final model. By improving a product, repairing it or making it again we can give it a new life, and the product can then go on to be resold or even personalised. And it is the challenge posed by obsolescence that Google is tackling by reinventing mobile phones that no longer meet the needs of users. By breaking them down into units it can choose to repair only what is broken and reduce costs, for example, and/or upgrade only the functions that are needed. The device lasts longer, and extending its use in this way can also lead to additional revenue. And as the need for resources diminishes, waste and cost amounts reproduce the same sort of curve. 

Are you ready to embrace circular thinking? Throw off your shackles and go for it wholeheartedly – but be aware that quick wins closely connected to the product are also a responsible step forward before transformation is possible.

Article

12.06.2024

We need to move forward together

Since 2019, the bank has reduced its CO2 emissions per full-time equivalent by 55%. And according to Sandra Wilikens, Chief Human Resources Officer, everyone must play their part.

Between 2019 and 2022, the bank succeeded in reducing its CO2 emissions by 55%. So how did you do this?

"Mainly by focusing on the energy efficiency of our buildings, which account for approximately 80% of our immediate emissions. We also optimised our real estate and significantly reduced business travel. We settled on a structured approach involving all departments. Since 2012, our Green Bank Platform has gathered the contact persons of each department every quarter, allowing them to present an action plan with their initiatives. They then develop a series of KPIs on energy and paper consumption, business travel, the electrification of the vehicle fleet, waste management, etc. Because measuring is knowing."

The target was to achieve a 42.5% reduction in emissions compared to 2012 by the end of 2025. A goal we have since achieved. What else is in the pipeline?

"We have no intention of resting on our laurels until 2025. Because there is no time to waste if we want to be carbon neutral by 2050. Our new headquarters at Montagne du Parc in Brussels is a good example of energy efficiency, but there is still a room for improvement in the rest of our real estate. We will improve the energy efficiency of the various regional offices, install solar panels in more than 80 branches, and LED lighting will become standard in all our buildings. These efforts must allow us to reduce our CO2 emissions by another 7%."

How much progress have you made in terms of the electrification of your fleet?

"We are making a sustained effort to electrify our fleet, and I think we are on the right track. At the end of 2022, just under 30% of our fleet of leased company cars was electric – 100% electric and plug-in hybrids. In the third quarter of 2023, these cars accounted for 95% of new orders. This was largely due to the new car taxation. But for employers, it doesn't stop there. They must deal with a complex tax framework, including the reimbursement of electricity costs. Some of our staff members also face obstacles, for example, because they have difficulty accessing a charging station. I intend to organise a mobility roundtable this year. The aim is to bring governments, operators, start-ups and companies together. Because we have to move forward and are all in this together."

How do you ensure sufficient employee engagement?

"With a lot of communication. You need to explain what you are doing and why. That is the only way to get people to cooperate. We have a network of more than 200 EcoCoaches within the bank. The sustainability compartment of CBA 90 also inspires. We set six specific objectives each year. If we achieve at least three, all staff members receive a bonus at the end of the year. To date, this has been a success. We also have other incentives. With our “Green Fuel Consumer Plan”, we reward staff members who have a company car but use it sparingly. We are also launching many campaigns to promote soft mobility, such as walking, cycling and public transport. The decision to base our offices in cities is also positive. At the end of 2022, 79% of the employees working in Brussels used public transport to get to work. Outside cities, 60% of employees do this."

Finally, can you think of any issues that need to be addressed urgently?

"Digital pollution is often underestimated. To give you an idea: sending 100 mails emits just as much CO2 as driving twenty kilometres. That’s why we organise an internal campaign every year to raise awareness among our staff members and give them tips on how to reduce their digital footprint. Regularly cleaning up your mailbox, sending links instead of files, deleting outdated files: all little things. But if our 11,000 colleagues do this daily, we can make a big impact. Every effort counts!"

Article

10.06.2024

Electronic invoicing between companies to become mandatory

The bill to introduce this obligation in Belgium has been submitted to the Federal Parliament. If the draft bill is approved, B2B e-invoicing will become mandatory from 1 January 2026. Our experts explain why Belgium wants to introduce these new rules, what the implications are for your company and how we can better support you.

“The bill is consistent with international developments and initiatives at the European level,” says Nicolas De Vijlder, Head of Beyond Banking at BNP Paribas Fortis. "Europe's ambition is a harmonised digital standard. Structured e-invoicing between companies will also reduce the administrative burden of invoicing, enabling companies to work more efficiently and increase their competitiveness. The automation of VAT declarations will also help governments prevent tax fraud and adjust economic policies based on more qualitative data.”

Evolution rather than a revolution

“The new legislation is an evolution rather than a revolution,” adds Erik Breugelmans, Deputy Managing Director at BNP Paribas Factoring Northern Europe. "Digitalisation is becoming pervasive at all levels of society, as we have seen with the increase in electronic payments, as well as the additional obligations in recent years regarding electronic invoicing to the government. In this sense, the bill for mandatory electronic invoicing between companies is a logical next step. Our bank is happy to contribute to this process, although we do not intend to offer the same services as accounting software or fintechs. However, we are happy to help our customers with payments and financing."

The impact on businesses

“Customers need to be aware that the new regulations will have an impact on their internal and external processes,” continues Erik Breugelmans. "The majority of Belgian companies mainly serve an international market, which means that the introduction of electronic invoicing will be more complex for them than for companies operating in the domestic market. As the legislation will be introduced in one go, they need to start preparing now."

“The new rules will affect a company’s accounting department as well as its IT department,” emphasises Nicolas De Vijlder. "The procedural requirements are key, otherwise the automated process will not work. However, one of the main benefits of advanced automation is that everything can be done faster and more efficiently. The time between sending an invoice and paying it will be shorter and cash flows more predictable. In addition, it will also reduce the risk of error and fraud, as all transactions will pass through a secure channel."

Ready to offer you even more and better support

“Thanks to the far-reaching digitisation resulting from the new regulations, we will be able to further optimise payments,” concludes Erik Breugelmans. "As a bank, we need to finance our customers’ receivables as quickly and efficiently as possible, so that they have easier access to their working capital. In addition, because we have already gone through an entire process in terms of large-scale automation, we will be able to adapt quickly to the new rules. We can also draw on the expertise of the BNP Paribas Group, which is currently developing an e-invoicing solution for large companies."

Want to know more?

Listen to the episode on B2B e-invoicing :

A subscription to build customer loyalty, reinvent yourself in times of crisis and buy better: Emna Everard saw that as exactly the right way to launch and maintain her Brussels-based start-up.

Born into a family of dietitians, Emna Everard knows what it means to eat healthily. "At the age of 12, I was already deciphering packaging labels. My dream was to open a supermarket one day where you could shop with your eyes closed", she recalls.

And because Everard has entrepreneurship in her bones, that’s exactly what she did. In 2016, just before the end of her university studies, she launched the “healthiest online supermarket on the market”: Kazidomi. Her standards are high, both in terms of composition and taste. Kazidomi selects products carefully, enabling its customers to buy healthy, mainly organic, plant-based products with complete confidence.

The loyalty programme

Six months after its launch, Kazidomi’s growth is accelerating thanks to the launch of its loyalty programme. A 59 euro subscription offering 20–50% discounts on all food, cosmetics or care products available online. Profitability and savings guaranteed.

This was followed by a first fundraising of €50,000 in 2017. Kazidomi is growing, expanding the size of its stock and developing its marketing. Everard hired her first two employees. Sales grew rapidly and literally exploded during the COVID-19 pandemic. "Consumers suddenly had time to think about their health and well-being and were doing most of their shopping online," she adds.

How did you reinvent yourself?

The post-crisis period was a turning point. "Kazidomi had to reinvent itself. We wanted to have financial stability and avoid any dependence on external resources," continues Everard. Together with her teams, she looked at their cost structure, operational efficiency and marketing. After these reflections, the aim was no longer growth at any price, but the company's long-term viability and financial health, thanks to an intelligent reorganisation.

Two acquisitions would subsequently enable Kazidomi to boost its growth, creating significant synergies: "Smart Fooding" in August 2022 and "Bébé au Naturel" a few months later, a business specialising in healthy products for babies and their parents. "With Bébé au Naturel, we doubled the volume of orders sent out," adds Everard. "This has allowed us to get a better rate from our carriers and reduce costs."

A responsive and attentive bank

As the Brussels start-up’s bank, BNP Paribas Fortis granted it three loans for its launch, between 2016 and 2019. This support came naturally, with Kazidomi’s commitments in terms of Environmental, Social and Governance (ESG) objectives perfectly aligned with the bank’s strategy. "We joined the BNP Paribas Fortis Innovation Hub programme and our relationship manager – who knew the start-up environment extremely well – was immediately enthusiastic and very attentive. He believed in our project, followed it closely, advised us to participate in a series of events to meet other players whose background and profile would be of interest for us," explains the Entrepreneur of the Year 2019.

But the support didn't stop there. "In December 2022, it was thanks to BNP Paribas Fortis, among other things, that we were able to acquire “Bébé au Naturel”. Start-ups like Kazidomi need a high level of responsiveness from their bank. When there is a company to buy, or another opportunity, things have to move fast. Analysis of the file, provision of funds: BNP Paribas Fortis has always been responsive and enthusiastic and has supported us in 99% of our requests," says the CEO enthusiastically.

Eight years since launching, Kazidomi today has 4,000 products that it delivers across Europe. The Belgian start-up makes 90% of its sales on its website and 10% via external resellers, such as Delhaize.

Kazidomi has also launched its own brand “Kazidomi”, which has 200 products on offer. By working directly with producers, we can offer the best possible quality products at the best price.

https://www.kazidomi.com/en

Kazidomi is ready to change the world. Discover even more inspiring entrepreneurial stories.

Cosucra is investing in the decarbonisation of its production processes. Their focus is on using fibre and plant-based protein from chicory and peas for a healthy and less polluting diet.

Belgium’s Hainaut-based Cosucra has been operating since 1852. The company is quite small with 365 employees, but its activities have evolved over time. From the 1980s onwards, sugar beet processing gave way to chicory and yellow peas. Also, sugar was replaced by inulin and pea protein.

"Many families lack the time to put a fresh meal on the table every day. With our products, the industry can offer them easy, quick and nutritious meals," says Eric Bosly, CEO of Cosucra. "Nutritionists stress the importance of fibre and plant proteins for health, and such a diet has a positive impact on our carbon footprint."

New investors

To take their decarbonisation a step further, in 2023, the company launched a seven-year investment plan worth EUR 150 million. “We are keenly aware of the climate crisis, so we wanted to make this transition fast,” says Bosly. “That's why we brought three investors on board who share our values and are willing to commit in the longer term.”

Long-term relationship

Cosucra and BNP Paribas Fortis have a long-standing partnership. "The bank has supported us in expanding to Denmark and the United States. It's of great value to have the same contact person for setting up the financial structure of subsidiaries, opening accounts abroad, etc. We also meet regularly, which means we can count on the expertise of teams specialised in the food industry. Their macro vision complements that of our local account managers who know our business well."

Same market conditions

Cosucra’s efforts will result in a 55% reduction in CO2 emissions within three years. Yet, decarbonisation is just one of Bosly’s bold ambitions. "We are pushing for the same market conditions as animal proteins. Why, for example, is 20 per cent VAT levied on pea-based milk while for cow’s milk, this figure is under 6 per cent? Plant-based products are also more expensive because you can't achieve economies of scale due to the lower quantities required. If you consider all the “negative external effects” of animal products on human health and the environment, our sector deserves support until we reach a certain scale."

Change of mindset

The entrepreneur also laments how the retail sector uses meat as a decoy product, lowering its margins to offer consumers an attractive price. "In times of inflation, that price difference is all the more detrimental to us. This is why a change of mindset is essential. Nutritionists say that a weekly serving of just 200 to 250 grammes of meat is enough to get the nutritional benefits with no negative impact. But at the moment, most Belgians consume 200 grammes of meat per day."

Bosly also cites competition from imported agricultural products as an obstacle.

Cosucra is ready to change the world. Discover even more inspiring entrepreneurial stories.

"The European Green Deal aims to reduce inputs by half, leading to the ban of many herbicides, among other things. Farmers should be supported in this transition. And a company like Cosucra, which buys chicory and peas within a 200-kilometre radius, is not on an equal footing with strong Chinese competition."

Discover More

Contact
Close

Contact

We would like you to answer a few questions. This will help us answer your request faster and in a more appropriate manner. Thank you in advance.

You are self-employed, exercise a liberal profession, are starting up or managing a smaller local company. Then visit our website for professionals.

You are an individual? Then visit our website for individuals .

Is your company/organisation client at BNP Paribas Fortis?

My organisation is being served by a Relationship Manager :

Your message

Type the code shown in the image:

captcha
Check
The Bank processes your personal data in accordance with the terms of the Privacy Notice of BNP Paribas Fortis SA/NV.

Thank you

Your message has been sent.

We will respond as soon as possible.

Back to the current page›
Top