We need to start from cities and the world of business to accelerate the transition to a circular economy. But we also need to know where to put in our effors. Many companies are already trying.
Call it a hype if you will, but the circular economy is here to stay: it is gaining traction around the world, and the strategies it provides can solve our current dependence on finite resources. By making effective use of the resources we already have, the circular economy moves away from linear practises towards a system in which we do not have to compromise between economic, social, or environmental prosperity. Because of its systemic nature, the circular economy requires a multi-stakeholder, implementation approach, and cities and businesses in particular hold the key to accelerating the transition. Current economic and business models assume a never-ending supply of natural resources for us to draw from in order to meet societal needs. This assumption, however wrong, has unfortunately laid the grounds for and enabled a global economy that is decidedly linear. With the world population expected to grow to nine billion by 2050, the reality of this linear system and the resource scarcity it will inevitably create has become increasingly hard to ignore. Ecological deterioration, climate change, and a widening prosperity gap only highlight and support the argument for a radically different approach to the way we create, consume, and dispose.
At Circle Economy, we believe that the circular economy provides the systemic overhaul we need. By putting forward business models and strategies that ensure we make use of materials and resources to their fullest potential, the circular economy reduces resource risks, minimises environmental impact, and, ultimately, mitigates climate change. It is a system that not only enables inclusive prosperity but, in making effective use of our resources, is also mindful of the boundaries of our planet. Beyond environmental considerations, the circular economy also provides new employment opportunities and improves the liveability of rapidly growing urban areas. In fact, cities across the globe are starting to recognize the circular economy as the solution they’ve been looking for. Many, however, still find it difficult to understand how and where to get started.
Circle Economy is an Amsterdam-based social enterprise that aims to accelerate the practical and scalable implementation of the circular economy. They believe in a visionary future for the planet – one in which we do not have to compromise between economic, social, or environmental prosperity. Alongside an international network and through their open source ethos, they enable cross-industry collaboration and aim to create the conditions for disruption and innovation. Their main focus is in introducing businesses, cities and governments to the circular economy, by helping them identify opportunities to make the transition and providing them with practical solutions to turn these solutions into reality.
Cities, government officials, and policymakers first need the be able to effectively measure and benchmark circularity. They need tools to quantify the potential for job creation, waste reduction, and business collaboration, but also to establish baselines and set KPIs for the circular economy strategies they want to test. These tools do not currently exist, but are quickly being developed and tested and, empirical research is increasingly starting to provide evidence for the promises of the circular economy.
Take employment, for example. With the support of the Erasmus Research Institute, Circle Economy has been able to define and measure the type of jobs that both foster and reflect circular practices, and we have developed a standardised and replicable methodology for any city around the world to use in measuring and monitoring them. This allowed us to determine that, currently, 8.1% of all jobs within the Netherlands directly or indirectly contribute to the circular economy. This is a baseline that government officials can actively use in quantifying how circular the Dutch economy currently is, but it also provides them with a benchmark to measure the results of future circular strategies. We hope this methodology will pave the way for other countries to follow in our footsteps and for other academic institutions and organizations to collaborate in developing the tools cities so urgently need to measure, monitor and evaluate their efforts.
Cities also need to know where to invest their efforts in order to effectively implement the circular economy.
When the city of Glasgow set out to become 100% circular, they quickly realised they needed to better understand how to start shaping their vision of systemic change. Which industries were ready to successfully adopt circular business models? Which areas within the city could benefit the most from a cross-sector, collaborative approach? Which market opportunities were there that linear practices couldn’t satisfy? And more importantly, how could they implement the change?
In order to answer these questions, we conducted a scan of the Glasgow economy using our Circle City Scan method – the first city-wide method that identifies key areas to catalyze a city’s move to circularity, defines opportunities for the local business community, and specifies implementation strategies. As a result of this scan, an opportunity was identified to connect the waste streams of local bakeries and breweries. This past March, local brewer Jaw Brew announced the launch of Hard Tack: a new craft beer brewed from local unsold and discarded bread. Hard Tack could not have seen the light of day without the mobilisation efforts of the Scottish Chamber of Commerce and the desire of local businesses to collaborate. Our hope is that this is the first in a long series of circular success stories.
Ultimately, although cities and government officials can set up the right legislative and political environment to support the circular economy, businesses remain instrumental in accelerating our transition.
Currently, most business models revolve around products designed to have limited useful lives, and value chains are designed to optimise this approach. These models, though financially profitable, do not take a systems perspective into consideration and face many future risks. Companies, however, can both future-proof their operations and contribute to solving the systemic challenges involved in the take-make waste system. By committing to embedding circular design thinking into all stages of their business, companies can leverage new, innovative, and competitive value propositions. Be it through designing out waste from their supply chains, designing for future lifecycles, or reevaluating their business models as a whole, businesses can realise both the financial and non-financial benefits of circularity.
Companies are already starting to make this transition. Take Fairphone for instance. They have designed modularity, repairability, and longevity into their phones, and have committed to supporting only fair practices throughout their value chain. Their pioneering work has significantly grown consumer awareness and the demand for similar products.
The denim brand, Mud Jeans, has a leasing scheme that allows them to both build long-lasting relationships with their consumers and, more importantly, remain in control of and reuse precious resources.
Desko, an office furniture manufacturer, uses buyback strategies to extend the lifetime of their products. By repairing and refurbishing the old furniture that they buy back, they are able to re-sell the same products three times. The list goes on, and these inspiring real life examples make us firm believers that circularity is here to stay.
Through close collaboration with companies that are already implementing circular economy principles, we are able to stay on top of the latest business developments and learn from the different challenges that these companies encounter during each phase of the transition. Eager to play a part in creating and implementing the solution, we have recently launched a series of workshops to help organisations, entrepreneurs, and product developers apply circular design thinking to their businesses, services and products.
Erasmus Research Institute, www.erim.eur.nl
Circular Jobs: The Circular Economy and Opportunities for Employment in the Netherlands, www.circle-economy.com/Circular-Jobs