10 things we learned in recent circular economy live chat

1. The circular economy is about the four ‘R’s

Asked to describe a circular economy for someone who had never heard of it, Bart Goetzee, senior group sustainability at Philips explains that it’s “an industrial system that is restorative by design which means you can focus on economic growth without the increased use of natural resources.”

Essentially it’s about making more money while selling less stuff and it encompasses four different R’s, expands Mike Pitts, lead specialist in sustainability at Innovate UK, offering some practical examples. Remanufacturing (Caterpillar ReMan), repair (Unipart maintaining Sky digiboxes and Dr Marten boots for life), re-use (Rent the Runway), and recycle (M&S Shwopping).

2. Circularity can mean different things for products and countries

According to CEO of Wrap, Liz Goodwin:

For a product, the onus is on the manufacturer who needs to take care of the resources used in its products, so it keeps the metals, plastics etc in use within the product cycle for as long as possible and thinks about design for longevity, repair and re-use. For a country, we might want to see materials being kept inside the country, creating jobs and contributing to the economic growth. The two are not mutually exclusive.

3. GDP is a useless measure in a circular economy

Terms such as GDP are meaningless measures for service-based economies, let alone circular economies, argues Innoverne’s Chris Hoskin. Pitts suggests that a more meaningful indicator could come from a tax on resources or consumption rather than labour, shifting away from labour productivity towards resource productivity. A tax of this nature, he says, would encourage circular business models concentrated on delivering quality rather than lowest possible cost for a generic product.

4. Education and entrepreneurs required to fill circular economy skills gap

“We are losing our repair muscles”, says Janet Gunter of social startup Restart. For repair and reuse to be possible at scale requires massive and urgent reskilling, and reaching young people at school will be key. There is hope. Children are being encouraged to code and prototype with 3D printing, Zero Waste Scotland is collaborating with the Ellen MacArthur Foundation and Scottish schools, and Education Scotland is looking at incorporating new ideas into its curriculum.

Also vital to filling the skills gap are entrepreneurs, who Goodwin says aren’t bound up with baggage of ‘we’ve always done it like this’. Pitts agrees that with so many disciplines working together on the circular economy agenda, entrepreneurs who can communicate across them all will be the innovation winners.

5. Ownership will look different in a circular economy

Take back programmes are a good example of a circular economic model and one that’s especially relevant to the building and construction industry. “In the built environment we may see rapid adoption of circular economy soon as buildings are constructed and managed by the same company,” explains Pitts.

6. Today’s waste companies will be the resource management companies of the future

The collection and processing of materials forms the basis of a circular economy but in many cases, manufacturers have no easy way of getting back the materials and components they put out into the market. Spotting this opportunity, waste management will become resource management companies, offering reverse logistics and process separation expertise as opposed to cheap disposal.

When it comes to re-purposing waste, part of the challenge says Chris Baker, general manager for Europe, TerraCycle is the constant innovation in packaging and product technology. To make recycling and re purposing easier, those responsible for designing new products need to have an understanding of the waste management process. Under current technology bioplastics for example, actually contaminate recycling streams so what might seem like a smart, sustainable choice for a designer could actually do more harm than good at end of life stage.

7. The circular economy shouldn’t forget the consumer

The circular economy is an opportunity for businesses to differentiate from competition, increase its margin and its customer intimacy says Goetzee. But with so many advantages for businesses, it can be easy to forget about the consumer. Pitts warns against this and asks that businesses win the support of consumers by offering them their own wins too.

8. Infrastructure challenges are local employment opportunities

Asked how the global nature of our economy affects the geographies of take back, Gulland responds: “We’re smart enough to work out how to supply the global economy, surely we can come up with an answer for this.” He suggests thinking about repair and reuse more locally over transporting them around the world. Goodwin agrees that focusing on circularity within a country or economy rather than the global picture might make more sense for certain product.

9. It is possible to be too circular

“It makes no sense to expend more energy regenerating a product than is embodied in the product in the first place. Different products will need different approaches but always keep in mind what is the best way to retain value in the business system and economy,” says Pitts.

That said, Goodwin points that the understanding of what is worth it and not worth it will continuously evolve, so nothing should be written off and we should strive to keep testing assumptions.

10. For a quick circular economy win, look to the future

A quick win for any given business could be anything from increasing on site recycling or shifting to a totally different business model (like providing a service rather than product). Goodwin recommends identifying quick wins by assessing and acting on projections for future costs like that expected of waste disposal or the impacts of volatility in raw materials prices.

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The circular economy hub is funded by Philips. All content is editorially independent except for pieces labelled advertisement feature. Find out more here.

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