Financial aspects of CE
The challenge of a circular furnishing for a CFO. Why does this pose a challenge and how does he cope with it? Financial Director Anne Jan Stuij, CFO of Gispen, is attempting to find out. He wrote a white paper on what he encountered in the past couple of years but he also explains the problems he faced in his quest for a circular economy. Read on for the complete story.
The professional’s thoughts
Why only lease cars? It is a very common thing to lease your company cars. Knowing what you can expect regarding expenses, flexibility, comfort and maintenance. Our products’ sustainable value and application is our greatest strength. We offer you the same option for your interior design. We would be glad to present you with a constructive proposal that suits your exact requirements.
‘… how will we incorporate this transaction into the annual accounts?’
You think you’ve seen it all. In a company that has been around for 100 years. But no, the accountant saw trouble looming ahead in a particular project.
A project in which Gispen successfully implemented a circular furnishing. But we had not foreseen being confronted with an accountant smelling trouble. How should we proceed?
Now that we have been working together with the accountant for a little over a month, we have gone over all the facts of the contract. The right accounting method has been found.
A circular project also poses a challenge to the accountant. The real test is in finding the right application of existing legislation.
A number of circular challenges
Circular design. Product life cycle extension.
Repurchase agreement? Or will we buy back raw materials from the client?
Can we speak of a guaranteed residual value or only of envisaged residual value?
On balance or off? Preventive or corrective maintenance.
Operational lease versus pay-per-use. Flexible implementation, upgrades, modular product development, longer economic life cycle.
In the past 3 years, Gispen has made considerable progress in transitioning from a linear- to a circular company. This has given our team, myself including, many new ideas and knowhow. This will enable us to keep in control and complete the transition that will keep our company in business for another 100 years. Not mentioning the consequences it will have for the accounting.
In early January, I had the privilege of holding a speech at the FAN (Financial & Accountancy education for the New Economy) about Gispen’s activities when it comes to the Circular Economy in practice and what that means for the financial side of the business.
Gispen & the circular economy
We created this framework together with TNO/UIW. The Design Framework determines the level of circularity of products.
Furthermore, over 10% of the desks that are despatched are circular.
This is sometimes due to the client providing the materials himself, which can be an ‘old’ desk or only the frame or tabletop. We then revitalise the materials and turn them into new, long-lasting products. Also called REVIVED by Gispen.
Ever since we have started working in the ‘Cloud’, there are redundant cabinets to be found all over the Netherlands. We now use these cabinets to build lockers or lounges for our clients. Also called REMADE by Gispen.
Working together with the client and creativity are key ingredients for both these working methods. The results are circular products, product life cycle extension and reuse in order to form an extra loop in the circular process, instead of producing waste.
Finally, I would like to get my colleagues of the Financials department involved.
What do you bring to the table when you need to make an investment decision? Would you let yourself be guided by new norms and knowledge?
Or would you hold on to existing models?
The students, our new employees, have the answer to that.
Would you rather answer these questions with help from us or do you have any other questions? Please contact Rick, our Manager circular economy, or one of our other experts in the field of CE.
Advice & project management
Gispen is in a transition. REUSE > LOSS PREVENTION > LESS WASTE PRODUCTION > Key words when we speak of a circular economy. I believe in these circular principles. I am convinced that well-designed pieces of furniture, both new and used, are the starting point for a sustainable interior. But also that optimum use is achieved by the right combination of extending product lifecycles and responsible use. I also believe that you need to take responsibility for the arrangements you make, and that you need the right incentive to close the loops. There is much to be gained!