Host: Roy Vercoulen, Founder of Circular IQGuests: Michelle Marrone and Rajan Murugesan, Munters
In this episode of Circularity: Why Bother?, host Roy Vercoulen sits down with Michelle Marrone (Environmental Sustainability Manager) and Rajan Murugesan (Environmental Engineer) from Munters to explore how manufacturers can balance carbon reduction targets with circular economy principles.
Together, they dive into the practical realities of integrating circularity into product development processes, engaging cross-functional stakeholders, and measuring progress while avoiding carbon tunnel vision. The episode offers candid insights into data challenges, change management, and how to create authentic sustainability alignment across global organizations.
Munters' purpose, customer success and a healthier planet embeds sustainability directly into the company's identity. After committing to Science-Based Targets in 2024 and receiving approval in 2025, the company initially focused on Scope 3 Category 11 emissions: the energy consumed by their climate solutions during use.
This made sense. Munters manufactures equipment that gets plugged in; dehumidifiers, data center cooling systems, industrial climate control. Energy efficiency during operation represents the largest environmental impact for products designed to run continuously for years.
But Michelle and Rajan's team, operating as a corporate sustainability function serving all business areas, recognized a critical risk: carbon tunnel vision. Focusing exclusively on operational energy consumption ignores embodied carbon, material depletion, waste generation, and end-of-life impacts.
Life cycle analysis (LCA) had already revealed that products create multiple environmental impacts beyond global warming potential; pollution, resource depletion, water stress, land use. When Vice President of Sustainability Andrea Haag joined in 2023, this expanded perspective aligned perfectly with the groundwork Michelle had been laying.
The question became: How do we design products that reduce operational energy and address material flows, waste, and circularity?
Recognizing they needed external expertise and collaborative learning, Munters joined the Combient Pure program, a platform bringing together Nordic companies to develop circular economy capabilities. Through this program, they connected with Circular IQ.
The program provided a comprehensive toolkit covering:
As Rajan emphasizes, circular economy requires a fundamentally different mindset than carbon reduction. CO2 emissions are relatively straightforward to measure and communicate. Recycled materials represent just one activity within circular economy, which also encompasses reuse, refurbishment, product-as-a-service models, design for longevity, and system-level thinking.
Developing this new organizational mindset requires external perspectives, collaborative platforms, and structured programs where teams can discuss new ideas and ways of working together.
But learning theory is one thing, operationalizing it is another. Michelle and Rajan are explicit: "It's not that easy. It's easier said than done."
Organizations have over 100 years of Industrial Revolution conditioning around linear economy thinking. Product development teams face constant pressure to deliver faster than competition or meet customer specifications exactly, often with limited degrees of freedom for innovation.
As change agents within Munters, Michelle and Rajan work to gradually transform the Munters Product Development (MPD) process. They've introduced eco-design checklists that engage engineers cross-functionally around questions like:
Raw materials: What's the origin? Carbon footprint? Is there a non-virgin alternative? Have you checked with procurement?
Material variety: Will the combination of materials make separation and recycling difficult? Are you creating composites that will be stuck together permanently?
Design for disassembly: How much effort is required for end-of-life procedures? Are components joined with rivets that prevent separation, or can they be easily disassembled?
Production waste: How much scrap are we generating? Can we minimize waste during manufacturing?
This last point is critical. As Michelle stresses, waste hierarchy starts with prevention. Circularity and recycling cannot become a comfort zone where waste is acceptable because "we'll recover it later." The first priority is eliminating or minimizing waste through proper operations and management.
These conversations require engaging the entire organization, not just R&D, but also procurement, operations, sales, and communications.
Munters operates in a customer-centric environment where many offerings are built to exact customer specifications. This creates inherent limitations on circularity ambitions, for example, incorporating high recycled content when customers haven't specified it or aren't willing to pay for it.
On the supplier side, getting information and embedding requirements presents constant challenges. However, progress varies by material category. Metal suppliers, representing the majority of Munters' material breakdown have been particularly constructive partners.
These suppliers can discuss current recycled content levels, innovation roadmaps, and what they might be able to produce in five years. While supplier engagement remains challenging overall, focusing on material categories where suppliers are mature and cooperative allows Munters to make meaningful progress.
The key is understanding where in the bill of materials you can move the needle while balancing effort with feasibility. Focus where there's both impact potential and flexibility to actually achieve something.
To establish Munters as a pioneer in industrial dehumidification and data center cooling sustainability, the company recognized it needed internal education matching its external ambitions. You cannot project a sustainability-focused image externally without bringing everyone up to speed internally.
The team has invested heavily in introducing concepts across departments:
This education effort is bearing fruit. The sales team provides a particularly encouraging example. Sales colleagues at Munters are highly technical, usually engineers by training who understand products deeply. They've always focused on core functionality and performance.
But now they're coming to the sustainability team asking: "Give me the sustainability angle. Teach me more. Let's look at total cost of ownership."
This shift is revolutionary. Sales can now present products that might cost more upfront but save customers significant energy over just a few years, creating a win-win where customers save money while reducing environmental impact. The sustainability team actively supports these conversations, helping translate technical sustainability information into customer value propositions.
As Roy observes, once teams realize that sustainability performance is simply another aspect of quality, not something separate or optional; real transformation begins.
For equipment manufacturers, energy efficiency has always been a pursuit. But having sustainability targets ensures energy efficiency becomes more than constant improvement, it becomes a minimum achievable target with specific numbers.
This serves dual purposes: ensuring customers receive energy-efficient products while contributing to a better future for both Munters and its customers. As Rajan notes, R&D teams have been doing this work for years, the terminology and framing around sustainability simply helps widen the scope and make targets more explicit.
The challenge lies in measurement and data. When Munters entered life cycle analysis and circular development, they discovered significant data gaps. As an international company with diverse products manufactured globally, even bills of materials don't always look the same across regions or business areas.
Key challenges include:
Michelle and Rajan use global datasets like EcoInvent, XCOBase, and US EPA databases as starting points. These help establish baselines and identify gaps, enabling them to show stakeholders what information is needed and develop processes for gathering it from specific teams.
This is where tools like Circular IQ's CTI (Circular Transition Indicator) become essential. Without measurement, you cannot identify where improvement potential is highest or where efforts would be wasted.
As Michelle illustrates: "I'm going to change to some fantastic plastic that's environmentally friendly, it's going to take me forever, it's super difficult—but guess what, it's like two percent of my entire product. Is it worth pursuing?"
The CTI tool was critical to the Combient Pure program because it moved beyond theory and principles into practical analytics. Breaking down products, measuring circularity in numbers and indices, and creating baselines gave Munters concrete understanding of where their products stand and what gaps exist.
As Rajan explains, different stakeholders view circularity from different perspectives. The CTI tool helped combine everything together into one unified number instead of several disparate ratings, opening up a huge door for understanding where improvements are possible.
One of Michelle's key observations: sustainability creates perhaps the first truly unified purpose that transcends individual department objectives. Without this umbrella, R&D might develop great solutions that procurement refuses to implement due to supplier relationships. Or procurement might propose new materials that R&D can't validate quickly enough to meet project deadlines.
Sustainability offers a higher goal, a wider objective that helps departments find common ground and work toward the same target with aligned speed and drive. This is especially important given that people aren't always prepared for new ways of working or topics, making change management an ongoing process.
Michelle identifies customer engagement as a critical lever for acceleration. Currently, customers in the HVAC and industrial climate solution space are still relatively new to circularity concepts. Greater customer pull would significantly ease transformation efforts.
While total cost of ownership works well for energy efficiency (demonstrating financial payback), showing customers the advantages of reused, reconditioned, refurbished, or remanufactured components proves more difficult.
However, maturity is growing. Larger customers are increasingly focused on embodied carbon, and driving down embodied carbon is only achieved through circularity. Reducing virgin material extraction, extending product lifespans, and reusing components all directly reduce embodied emissions.
Michelle advocates for tools that communicate circularity benefits in customer-friendly language—Environmental Product Declarations (EPDs) represent one approach, but the industry needs additional materials supporting these dialogues without overwhelming customers with full LCA complexity.
The Combient Pure program's collaborative structure provided invaluable peer learning. Seeing companies ahead of Munters in their circularity journey demonstrated what's feasible and dispelled myths.
One powerful myth: small products are easy to recycle while large, complex products are difficult to include in circular visions. But program participants shared examples of very large compressors being reused, repurposed, and rebranded with special indicators showing "this has been used before, but we're proud of it and it's still in great condition."
These pioneers also demonstrated durability by design—engineering products to last multiple lifetimes from the start, already imagining two or three lives in the initial design phase.
These examples gave Munters both appetite and enthusiasm, proving that transformation is possible. The company now hopes to become that example for other organizations just beginning their maturity journey.
When asked about circular products that resonate with them personally, both Michelle and Rajan shared thought-provoking examples:
Michelle: The Blockbuster Video Model
In today's world, streaming movies online feels more sustainable than physical media. But every time you stream, you consume energy in a server somewhere. A DVD can be watched hundreds of times after being manufactured once.
Blockbuster (showing Michelle's vintage perspective) took this further, a sharing business model where one VHS cassette could be watched by person after person after person, all for just a few pounds. Affordable, accessible, no internet connection required, and dramatically lower resource consumption per viewing.
This embodied circularity in action, and Michelle believes we should find more solutions following this model.
Rajan: Rental Business Models
Why purchase ski equipment used three days per year? Why own a car for occasional use? Why buy specialized tools for one-time projects?
Rental business models eliminate consumption of materials with less than one percent utilization. Minimum consumption is necessary in today's world, and product-as-a-service concepts dramatically reduce overall consumption impacts.
Michelle adds that ownership of underused items often leads to aging and degradation—ski equipment sitting unused for years becomes unusable, creating waste without ever delivering value beyond initial purchases.
Rajan raises an intriguing topic for future exploration: digitalization versus circularity. Everything is going digital—but do we actually know if digital solutions are circular? The energy consumption, server infrastructure, and e-waste implications of our increasingly digital world deserve deeper examination in the context of circular economy principles.
Throughout this conversation, several themes emerge powerfully:
For more information about Munters' sustainability journey and commitments, visit their sustainability report and Science-Based Targets Initiative page here.
As manufacturers navigate the integration of circular economy principles with carbon reduction strategies, the lesson from Munters is clear: comprehensive sustainability requires looking beyond energy efficiency to address material flows, design principles, and end-of-life considerations from the very beginning.
To learn more about balancing carbon and circularity goals, implementing eco-design principles, and measuring circular performance, check out our latest resources. And if you have experiences integrating circular economy into product development processes, we invite you to connect with us and join the conversation in a future episode.
Do you have something to add to the conversation? Cool! Get in contact with Roy by scheduling a meeting.
