TOP 6 LEARNINGS FROM A CIRCULAR ECONOMY EXPEDITION
James Griffin was invited to the recent Ellen MacArthur Foundation CE100 Annual Summit in London and grasped the opportunity to connect and learn from world leaders in the mission to transition from a ‘linear’ to a circular economy. The trip was combined with meetings with a host of other organisations progressing the circular economy in London and Scotland with a view of gathering knowledge and connection to help catapult the work we are catalysing in NZ to the next level.
Below is a distillation of the key learnings
1. It’s all about the economics
The economic argument for the case for the Circular Economy dominates and underpins the traction it’s gaining. Scotland, for example, identified annual cost savings of £0.8-1.5 billion from increased circularity in manufacturing. This equates to around 5 to 9% of total turnover from the sector. Likewise an analysis of 10 consumer goods categories, such as clothes and food, revealed potential annual cost savings of £1.5 billion.
These figures have justified the GBP 70 million investment in transitioning Scotland to a Circular Economy.
Such economic arguments have meant that the European Union is providing €650 million under Horizon 2020 (the EU funding programme for research and innovation) and investments in the circular economy at national level.
The environmental message is there (e.g. Scotland identifying they can save 11 million tonnes of greenhouse gases per year by 2050 via circularity) and important but secondary to the economic message.
2. Frameworks underpin systemic change
Cohesive, collaborative and comprehensive frameworks are providing a solid base for co-ordinated action. London’s Circular Economy Route Map (see 1) is a great example of this as the Circular Glasgow City scan. Such Frameworks are crucial for high level buy-in, leveraging current activity, identify key points of intervention and providing a license for associated action.
3. The linear economy is ripe for disruption
New businesses are quickly emerging and starting to grab some of the economic value identified as well as generating social and environmental value. Snact making snacks from ‘ugly fruit’ which would have been previously wasted and Globechain creating a profitable technology platform for connecting businesses with unwanted products are just a couple of examples I came across. There is also plenty of evidence that existing businesses generating new value from circular opportunities like JawBrew making beer from bread waste. Some of the growth is being fuelled by Innovation Challenges such as the recent one by LWARB offering GBP20,000 for a winning circular business concepts in the Built Environment and Food Sector. The Ellen MacArthur Foundation have gone larger scale with GBP2million up for grabs for business concepts to keep plastic out of our oceans.
While start-ups and SME’s getting circular innovations out the door we are also seeing Corporates collaborating at the pre-competitive stage to tackle more systemic circular challenges. The Circular Fibres Initiative driven by the Ellen MacArthur Foundation is a prime example of this which involves some of the global players such as H&M and NIKE. Of course when initiatives reach the competitive stage progress will speed up dramatically as organisations vie for 1st mover advantage.
4. High level leadership is crucial
The Ellen MacArthur Foundation has done a fantastic job in highlighting the global opportunity (and need) to transition to a Circular Economy in a way that resonates in Board rooms and with Local and National Government Policy Makers (see Point 1.) It’s evident that high level leadership translates into demonstrable progress. For example in 2015, the Scottish Government launched its first Circular Economy Strategy for Scotland, “Making Things Last”, in which the priorities for moving towards a more circular economy were set out. This has been the foundation for significant activity in Scotland particularly via Zero Waste Scotland. As a result Scotland is being seen as one of the leading Countries in the World in terms of progressing Circularity.
High level leadership in large corporates such as Philips and Ikea, to name just a couple, is resulting in activity that is clearly looking to change current business models from linear to circular ones. Ikea have committed to support customers to care and repair, rent, share, bring back, and resell their IKEA products to prolong product life.
Franz Van Houten, CEO at Philips recognises that for a sustainable world, the transition from a linear to a circular economy is a necessary boundary condition. This recognition has meant they are offer a Pay Per Lux model for their customers.
5. Momentum is building quickly
The economic and environmental (as well as social) benefits of a Circular Economy as well as the obvious need are well accepted meaning the only argument about transitioning towards a circular economy is how fast we need to move. We are seeing signs that we are reaching a tipping point for the transition. One indicator of this is the growth of the Ellen MacArthur Foundation which has grown from a team of about 5 a few years ago to over 100 staff and are about to open an office in China. Also Zero Waste Scotland have seen a similar growth in staff numbers. Also, earlier this month the World Circular Economy Forum in Helsinki attracted over 1,500 key people from more than 100 countries. As Andrew Morlet, CEO Ellen MacArthur Foundation, pointed out at the Summit on the 15th June, if you googled the term Circular Economy today you get nearly 9 million references versus a handful five years ago.
6. A clear opportunity for New Zealand
With New Zealand being an innovative young Island Nation with a small population (similar to Scotland incidentally) there is a key opportunity for us to demonstrate circular solutions to the rest of the World.
To quote Dan Epstein (who led the sustainability initiatives at the London Olympics),
“If any country is going to adopt the circular economy it will be NZ – with your close knit community and island configuration you are ripe for adding value by making more of your resources.”
Some other Countries and Cities around the Globe may have had a head start in taking a co-ordinated approach to the Circular Economy however activity is still relatively new and lots of learning is still to be done. With the right approach it wouldn’t take long for NZ to catch up and surpass other Nations to be Circular Economy leader.
SBN is looking for organisations wanting to collaborate to realise the Circular Economy opportunity for NZ. To be a part of this growing group please contact James@sustainable.org.nz.
Many thanks to the following organisations for their willingness to share information around a common goal of accelerating the adoption of a circular economy.