Desks and other circular things
The Recycled Assets Company is moving up through the Circular Economy value chain. A post in our series on B Corp companies in the UK.
The circular economy is an essential tool in our survival kit, giving us smarter ways to design, make and use everything. Instead of using systems of extraction, pollution and waste that ultimately lead to lost value, we can design systems to reuse, repair and regenerate, creating value opportunities for business and society.
A Circular Economy Handbook, Catherine Weetman, ISBN-13: 978-1789665314
Jason Bentley understands the deep workings of the Circular Economy (CE). His company, The Recycled Assets Company (TRACOuk), was founded and operates on its principles. More importantly, he’s navigating the company up the CE value chain, from recycling to reuse and onwards towards - potentially at least - the sharing economy. In Green Edge’s opinion, his business model makes a good case study for SME leaders trying to figure out how CE might work in their businesses.
TRACOuk deals in the circular economy of office assets. The firm offers some low-volume / high-value services, like waste electrical and electronic equipment (WEEE) recycling and confidential waste disposal, but the bulk of its work - and space in its warehouse in an industrial estate in Portsmouth, UK - is taken up with storage and reuse of office furniture. The Green Edge took the opportunity to visit TRACOuk recently and to sit down with Jason, to find out a little more about the company, its recent accreditation as a B Corp, and his view on the way the circular economy might be moving in his neck of the woods.
Being the B Corp
Jason starts by describing the origins of the company. With a background in charity operations, he was responsible at one stage for closing down one of his employer’s offices. He tells us, “They said, can you empty the office for us because we have to give it back to the landlord empty. It was a big office with hundreds of desks and chairs. And I thought, how am I going to empty this? And that's where the idea was born”.
Branching out on his own, Jason didn’t want to operate as just another charity; he wanted a business that solved the problems of other businesses and was sustainable in its own right. So he founded TRACOuk in 2013 as a social enterprise company, donating a proportion of its profits according to social enterprise rules - a grant to support a landmark sculpture on Southsea seafront is one such example - while still ensuring the company operates with sufficient working capital to have seen it through the pandemic. Good evidence of the resilience of his business model, we think.
If you’re an office furniture geek, a walk through the warehouse would be like being a kid in a candy store. Everything from simple chairs to computer cabinets, packaged-up for reuse, are there. Two ‘community containers’ placed outside the front of the warehouse are kept full with desks, chairs, books and other items that are perfectly useable but would otherwise go to landfill, and shout outs on the company website alert folk to the latest free offerings. They’re pretty popular, Jason tells us. Donations are sometimes made in kind - the company recently provided an entire shop full of carpets to a local business that got flooded.
But make no mistake here, TRACOuk operates with a healthy respect for the profit element of the triple bottom line. Jason says: “I'm very big advocate on making profits. They have to be in your mix [of the triple bottom line: people, planet and profits], otherwise you’re just another Oliver at the table - please Sir, can I have some more? I never wanted to do that”. Profits also help a company to grow in the way it wants to - which doesn’t necessarily mean growing for the sake of simply getting bigger and uglier. In TRACOuk’s case, a second warehouse is being opened across the road and dedicated to commercial storage, which will generate profits, while a second company - the Sustainable Future Group - is being formed to support young businesses who are developing circular solutions in furniture and equipment (F&E) reuse.
To date, TRACOuk is the only B Corp company operating in the Portsmouth area of Hampshire in the UK (at least, as far as we can see), receiving its accreditation in November 2021. While B Corp accreditation complements TRACOuk’s green and social credentials, in many ways it was a natural progression for the company. Its B Corp impact score was 91.1[1], which is notable given that it’s listed by B Corp as a ‘service with significant environmental footprint’. Jason tells us that in selecting B Corp as the accreditation to go for, he considered several other options. “I looked at all the standards that I could apply for. There's obviously the ISO's and all the accreditations in this space. Future-Fit Business was a really good one. But B Corp came out on top because it aligns to UN Sustainable Development Goals and they're here to stay and they pervade through most things. So I thought, why reinvent the wheel?”
Moving up through the CE value chain
We move on to talk in more detail about the circular economy (CE) and the way CE is embedded in TRACOuk’s operations. And here we find that the ‘Recycled’ part of the company name is a bit of a misnomer, or at least a legacy of the original naming of the company. Jason explains. “I don't like this recycling approach that we're using today. We’re solving a business problem, but we're also creating another problem for someone else down the line. We recycle metal and wood, but it’s one of the lowest levels in the food chain, just above ‘refuse derived fuel’ and lastly landfill. Reuse is the key component of our pitch. Our raison d'être is to try and keep the goods moving, and in doing that we prevent landfill and reduce carbon emission”.
But what about CE business models beyond simply reuse of office assets? If we look at the famous butterfly diagram from the Ellen MacArthur Foundation, we see value beyond recycling in remanufacturing, and even higher value in the sharing economy. Jason has been thinking about this too. He cites three companies he admires at very different ends of the scale: JCB for its remanufacturing, thelittleloop for its sharing concept for children’s clothes and Rype Office for its remanufacturing of used F&E to create higher value workspaces.
But would it work for office furniture?
The first problem is with the buyers, in particular the big companies that fit out their offices with new furniture and then throw it all away when they move on or reorganise. Jason says he’s sometimes part of the problem here by aiding and abetting office decants with the service TRACOuk offers: “I’m solving business problems but until big business restructures how they procure and shift to hire or rent, then the work we do is damage limitation which isn’t the best solution for the planet”.
Next, there are the sellers. Jason mentions several big name office furniture manufacturers who are working on responsible sourcing and management of their supply chains. But the emphasis is still on selling new and not designing in the elements of reuse, remanufacturability and sharing.
And, while in sectors like the construction industry the costs coupled with the brand equity, underlying capabilities and sheer trust in the JCB’s of this world allow widespread use of certified remanufactured and refurbished components in ‘new’ vehicles, there’s a lot of mindshifting needed at both ends of the value chain before this applies to the office furniture sector, even for the top brands like Herman Miller.
So, could a firm like TRACOuk step in as a trusted ‘green’ office furniture supplier to firms both large and small? Managing a sharing business model throughout the lifetimes of a client base of offices, renting out the furniture and keeping it fresh with shared, reused and even remanufactured components in line with the budgets of each client? Potentially yes, according to Jason – but there are hurdles to jump.
First it would need to be the right type of furniture. “People are still drawn to brands”, he says. “So take Herman Miller. They happen to have a particular desk called the Sense Desk, which is a really easy desk to put together, it's easy to transport, it’s lightweight and it’s aesthetically good. It ticks all the boxes. We have some desks which are ridiculously overengineered. They must be built for elephants”.
So, selecting the right kit for its CE potential, then. And that means leaving out equipment with a lot of mixed plastic and metal, which are labour intensive to separate and are really not built to take apart, even though someone will have to at some point.
The next hurdle, as in good comedy, is timing. Jason again: “I would need to get to the companies buying now and I'd have to sell our company as a consultant to them. I would need to know all the product options on the market when it comes to, say, buying your desk and what is the best desk for the long or short term and when would leasing make economic sense. I'd need to become their new green consultant with cost analysis presented and measured in monetary and planetary values.
And , last but by no means least, there’s the financial model for TRACOuk itself. As software companies learned during the mass shift from permanent licences to subscriptions, subscription models are much better for showing baked-in multi-year revenues to investors, but at the expense of shorter-term cashflows. “It's a fundamental shift. It takes a big business with backing to be able to do it. The banks may also take a dim view of this. They like the idea of it - ‘very noble Jason, but really you want us to bankroll you until you have enough product out on lease to sustain our monthly cash flows?’ It would more than likely be a big manufacturer like Herman Miller? But they would have to present the new income model to their shareholders and the pull back on the promise of fast and easy big returns in favour of long slow drip fed returns. Like I say it will take a fundamental paradigm shift for the industry as a whole to switch 100% of sales to lease contracts, perhaps it will start by offering both and overtime leasing could achieve a tipping point.
“So although we’re not looking for a backer to bankroll us while we go through this transition, it’s worth noting that the withdrawal of quick sales would leave us on the operating table with lower incomes in the short term.. Can we hold out until scale and revenues increase? Understanding this is probably our next journey, to think about that and what it means to the business”.
The sharing model for office assets may be some way off. If it is achievable, though, Green Edge gets the sense that Jason Bentley and TRACOuk could play a part in making it happen. As he says: “We found a model that really works, but the next phase of that is to try and push the boundaries, and I think the consultancy option of understanding the marketplace and consulting on what good looks like in this space, that would be a good talking point”.
We thank Jason Bentley and his colleagues at TRACOuk for their time in meeting the Green Edge for this post.
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[1] A score of 80 qualifies for B Corp Certification. B Corp gives 50.9 as the median score for ordinary businesses.