The transition towards a global circular economy is gaining more and more traction, but it’s not fast nor widespread enough yet. That’s what emerged from the first two days of the World Circular Economy Forum (WCEF), an international summit for the acceleration of the circular economy which started as an initiative of Finland and Sitra, the Finnish Innovation Fund, and has become one of the leading international events on the topic.
Now in its seventh year, after visiting Japan and Rwanda WCEF returns home in style, with a long list of lecturers set to speak in the halls of Helsinki’s modern Messukeskus convention center.

The conference rooms are packed but not at full capacity, with about 2,000 people present and nearly twice as many online. The “insiders’ club” is well represented, from the World Economic Forum to United Nations agencies and organizations, and from multilateral development banks to the world of international associations (such as Circle Economy). While Finnish and Nordic companies and business associations are naturally present in numbers – as the event is also designed to support Finland’s leadership role – multinationals, SMEs, academia, and finance can be found more on stage than in the audience.

Aiming for the mainstream

A hint of the impact of today’s circular, regenerative, low-carbon economy on the petrocapitalist linear economy is offered by Emma Sairanen, project coordinator for sustainability solutions at Sitra and co-host of the first day’s proceedings. “The transformation is not going fast enough. We need to bring a real critical mass on board with the circular transition. Decision makers and conservative interest groups still pose significant resistance to big ideas like paying farmers for ecosystem services.” Andrea Liverani, specialty officer at the World Bank, has the figures. “Today’s gap between circular and linear economies is $90 trillion. But at the current growth rates of the two economy models, it’s likely to grow to 224 trillion.”

These figures stand in stark contrast to the vibrancy of the circular economy enthusiasts, who flocked to Helsinki as strong and numerous as ever; if 10 years ago it was a scattered group of visionaries, today WCEF hosts representatives from nearly 140 countries, several important personalities from UN bodies and international organizations, experts and communicators. Yet the event, although painstakingly organized by Sitra and the Finnish government and recognized by the Circular Hotspots network, the United Nations, and the world of development finance, is still mostly overlooked by CEOs, high-level bankers and investors, administrators, and experts. It remains a niche event aiming to go mainstream. The absence of the press is telling.

A slow turn towards circularity

The interesting sessions of the event shed new light on why the circular transformation is taking this long. “Replacing the linear economy is not easy, because it’s heavily subsidized. We are talking of about 2% of global GDP,” said Liverani, who spoke on the second day. “It is basically impossible to compete with it.” For Steven Stone, deputy director of the Economy Division of UNEP, the absence of public funding weighs in, as it leads to a lack of resources and even of “circular public procurement strategies, which help building trust.” The countless existing networks must become stronger and more extensive, he continues, reiterating the concept in several sessions. Teaming up and strengthening industrial symbiosis, international partnerships, networks, and hotspots are all topics that resonate over and over again in the halls of Messukeskus. Essentially, what is needed is a shared political orientation to be promoted globally by governments and industry leaders.

However, there is no shortage of solutions, from incentives to purchase circular products to EPR systems, taxation based on the intensity of materials and not on labor, consumers awareness, dedicated finance, trade agreements based on circular economy principles, metrics, support for innovation, new business models, and local, national and regional economic development plans. Ideas that come from Europe, but also from Chile, Vietnam, South Africa and Morocco. The US is notably absent, but Circularity2023 is set to be held next week in Seattle.

Among the thousands of notes taken, it’s worth mentioning that there is a lot of talk about trade and tariffs, from the international markets for secondary raw materials to those for remanufacturing components. According to Becky Taylor, director of business development at Caterpillar Inc., a company that trades more than 8,000 types of parts derived from remanufacturing globally, “ensuring the free movement of goods is key. This way, countries that allow the movement of key elements for the circular economy will be able to benefit from it directly.” But in order to do so, clear standards and an international plan to review trade agreements to encourage circular and clean tech are needed, says Gael Grooby of the World Customs Organization.

The role of finance

One of the highlights of WCEF2023 was the first meeting among the directors of the “Environment” departments of the major multilateral development banks (MDBs), who discussed the introduction of the circular economy in their development plans. The African Development Bank (AfDB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank (IDB) and the World Bank all recognized the importance of the circular transition in facing the triple planetary crisis of climate change, biodiversity loss and pollution. A crucial breakthrough, that will hopefully bring private funding to the table. “The world of private finance is key, without it we won’t be able to achieve the desired results and the world will be more at risk,” explains Ambroise Fayolle, EIB vice-president. The participants to the meeting established several priorities: linking circularity to key environmental goals – especially to the Paris Agreement targets; improving and aligning impact assessment methods for circular economy investments; aiming to increase the share of high-impact circular projects in lending and investment practices; and building internal (MDB) and external (project partners) expertise to employ circular economy as a development strategy.

Future goals

The works will end on Friday. Over the next two days, Sitra has made room for workshops and meetings organized by third parties in various venues around the city, which will certainly provide more information on the state of the global circular economy. Meanwhile, next year’s WCEF2024 will be held in Brussels, moving closer to the so-called control room. Stronger partnerships are expected for International Resource Panel (a platform created under UNEP), think-tank Circle Economy (presenting itself as an alternative to the EllenMacArthur Foundation) and for the United Nations Development Programme (UNDP). While this is certainly good news, the real breakthrough would be the involvement of international industry associations. A challenge for the founders of WCEF and maybe an incentive for all to raise the bar of ambition and action.

Image: Helsinki (Envato Elements)