Festival of Circular Economy 2022 speaker, Maya de Souza, Circular Economy Director at Business in the Community, offers her views on the complexity of the shift to a circular economy and what role collaborative projects and policy have in achieving systems change.
It is generally understood that the circular economy can deliver a lot to British businesses. For instance, with a simple switch from buying new goods to renting goods and services, it has been estimated that UK businesses could save over 500 million tonnes of CO2 by 2050. But how to reach this level of responsible business is a challenge, as no one business can achieve a circular economy on its own.
The talk is often of systems thinking and systems change. In this article, I ask how businesses can affect systems change and give examples of ongoing initiatives to address this strategic challenge.
The first challenge is how to make a product or material stream circular when this means a whole set of businesses must change their approach. For example, for packaging to be recyclable many times over without the deterioration of materials, a limited number of polymers, avoidance of contamination with colours and labels, good collection systems and reprocessing factories are needed. How do we get out of the trap of being powerless within the system?
How do we get out of the trap of being powerless within the system?
This is where collaborative value chain projects which bring together businesses along a supply chain can make a difference. An example is Hong Kong’s Drink without Waste initiative. With an incredible 80% of beverage packaging ending up in Hong Kong’s landfills, this campaign brought together the drinks manufacturers, packaging companies, reprocessors, NGOs and government.
This resulted in a working group and positioning paper, outlining what suppliers, retailers and waste management services can do to eliminate waste and create a circular economy. Policies, collection systems and reprocessing plants have since been developed with a reprocessing plant now in operation.
Aligned with this approach, Business in the Community (BITC) is working to kick off similar initiatives in several areas including optimising the use of biowastes (from wastewater to food waste), as well as addressing the hurdles in relation to packaging reuse.
Demand
A related challenge is that conundrum where businesses want to buy ‘circular products and services’, such as reconditioned electrical and mechanical equipment or clothing that is easy to repair and recycle. But worry about the lack of suppliers in the market and limited competition meaning they may get few bids. Suppliers will say they would invest but there isn’t enough demand.
BITC is currently working with a group of Northern European countries (through the Interreg funded ProCirc programme) on a couple of Joint Statements of Demand. The aim is to bring together a set of buyers to state what they will be seeking in a few years’ time, to give suppliers a signal and opportunity to innovate and invest. We’re beginning with workwear and office furniture; whilst our partners in Malmo in Sweden will develop a Joint Statement of Demand on electric vehicle charging infrastructure.
This approach has been tried in different contexts, with one of the early initiatives being by Johnson Matthey in their catalytic converter business, known as Forward Commitment Procurement. By aggregating demand with others, they managed to bring the product onto the market, getting over the challenge of having little influence as just one customer buying from a supplier.
Internal collaboration is such an important part of the picture
A third element of achieving systems change is developing a shared view within an organisation of the direction of travel and the action needed to create change. Businesses as we know are often complex: working out where to start and how to bring all on board is no easy matter.
Embedding action into a business strategy, with a clear allocation of roles, training and skills, practical tools, and creating a shared sense of vision and purpose is important. Internal collaboration is such an important part of the picture.
Fourthly, clear and transparent targets within and across sectors can help drive change, as long as this is combined with creating supportive ecosystems for example around skills and consumer behaviour as well as the policy framework. Businesses can help influence and nurture these healthy ecosystems that enable activity, turning what may seem to be a desert of opportunity into a hothouse of action.
There are no simple answers on how to achieve systems change, but these steps are powerful enablers for change. Through collaborative value chain action to solve problems, the aggregation of procurement power to drive innovation, and by bringing an organisation together around an internal vision, and setting out clear targets, with a supportive ecosystem that includes the right policy framework, the change we need can be achieved.
