Following the recent publication of a white paper by the Institute of Asset Management (the IAM) looking at ‘How asset management can enable the circular economy‘ it got Paul Wood thinking about how Finch incorporates this level of thinking into the support and services it offers its clients.
As a business we are always striving to be at the forefront of the latest initiatives, and whilst sustainability and circular economy are not new concepts, we are only just starting to see them emerge as priorities in their own right across a lot of the sectors we support.
Sustainability is a key deliverable in the battle against climate change. The existing linear approach of take-make-waste cannot continue in a world with finite resources, adopting the make-use-reuse approach will require a different thought process and cultural shift but it is feasible and will help drive future technological developments.
One of the big challenges in achieving these aspirations has often been from a financial perspective. Adopting a more sustainable approach often incurs additional costs with no tangible financial return which has been a prohibitive factor. However, attitudes are starting to change and whilst there may be no immediate financial benefit, being a sustainability-conscious business can be considered as a value in itself which can set an organisation apart from its competitors.
- Customers want to deal with companies whose priorities extend beyond making lots of profit.
- Investors want to be involved with environmentally positive businesses.
- Employees want to work for an employer with good ethics.
What does this mean from an asset management perspective?
Alongside the details within the white paper, it also presents other opportunities:
- Sustainability should be built into the company policies to ensure that it forms part of the normal approach to operating.
- It might be the better option to invest in the slightly higher specified new piece of machinery which, although more expensive, may have the potential to be run for longer, be more robust and has the potential to be life extended in the future.
- Can existing equipment be refurbished up upgraded to avoid buying new and committing to a greater financial burden?
- An asset which has a longer expected life could then present the possibility of depreciation over a longer period which benefits from an accounting perspective but also offers the potential to release more funding to invest in more projects.
- It’s an opportunity to further align engineering with the environmental objectives of the business.
- Asset management strategies need to be reviewed to understand how well sustainability is built into existing processes and whether they have a long-term vision to work towards a circular economy.
Whilst a lot of this is nothing new, it is strongly believed we’re entering an era where sustainability cannot continue to be something that isn’t just talked about, it is a time when the industry really needs to put the wheels in motion to adopt a more sustainable approach and where a circular economy becomes the norm.
If you would like to discuss how sustainability and asset management can help your business, then please get in touch with Paul Wood at [email protected].
The Institute of Asset Management, 2022, How asset management can enable the circular economy, https://theiam.org/media/4103/iam-how-asset-management-can-enable-the-circular-economy.pdf