Creating Green Industries through Circular Economy

Abstract

The role of industrial sector is very important aligned with a program of economic transformation heading to competitive manufacture. However, industrial activities also cause adverse environmental and social impacts such as air and water pollution, odour, vibration, noise, traffic jam, land subsidence, flood, in turn, deteriorating people’s health. One policy to deal with this problem is by encouraging industries to participate on business performance rating on environmental management called proper. To achieve the environmental excellent, companies must adopt life cycle assessment (LCA) and corporate social innovation. This paper observes the companies adopting LCA and practicing circular economy based on LCA. The type of research is a descriptive analysis. The data collection techniques consist of literature review, informal interview with relevant persons and webinar. The study showed that the companies adopting LCA benefit from reducing emission, energy used, the volume of water consumed and the waste being generated, in turn, reducing the cost of production. The benefit of practicing corporate social innovation includes reduction of waste heading to zero waste, consumer’s loyalty and good relation with community. It is recommended for industries to formulate corporate social innovation at the initial stage of the program through social mapping.