The Pandemic as Prelude to a Circular Economy: Part 2
By Markus Kessler and Russ Stoddard
The linear life we’ve chosen and the way it affects how we conduct business or create consumption — by designing and mass producing single-use, throwaway products with a complete emphasis on convenience — can no longer be the way we live our lives or how our economies operate.
In the first part of this article, we introduced the circular economy as a new business model to address climate change, though its precepts are to be found in the “old ways” prior to mass production and the explosion of the industrial age and its child, consumerism — back to a time where products were produced locally, built to last, and passed down from generation to generation.
A circular economy is “bio-based,” where what we use is intentionally designed to be reused, recycled, or repurposed. Put another way: Nature reuses everything; nothing goes to waste. In a commercial economy, circular-driven companies and national strategies mimic nature (aka “biomimicry”) to recover and reuse their own resources. They prioritize local supply and decentralized production, and build business plans around longer-term, sustained growth based on slower consumption patterns. In many ways, this is just what the Coronavirus is forcing us all to do — become more circular in our own lives.
Cradle to Cradle
In 2002, Michael Braungart and William McDonaugh set forth the basic principles of the circular economy in a theory called “From Cradle to Cradle” (C2C). The key ideas supporting C2C are unlimited sharing, renting, reusing, repairing, reworking, and recycling of materials. This increases the life of products, combating planned obsolescence and conserving natural resources by limiting their extraction and reducing waste to a minimum.
This notion of C2C has been championed in recent years and advanced as the circular economy by the Ellen Macarthur Foundation, a worldwide leader in educating and promoting the circular economy and an excellent resource for those looking to learn more about the subject.
For business, this approach can require securing your own recycled or renewable materials and using local, decentralized manufacturing to strengthen your supply chain in the face of future “unknown unknowns.” Slowing your company’s consumption of resources keeps your products in use for longer periods, which decouples your revenue from resource consumption — and can spur a new and more sustainable approach requiring true innovation to foster additional revenue streams.
Product Service Systems — the Sharing Economy
Another pillar of a circular economy, “product service systems,” provides familiar examples to us all. Rather than purchase the good itself, this principle encourages people to buy only the “service shares” provided by a product, or what has come to be known as the “sharing economy.” While many of us are familiar with car-sharing, you can now subscribe to all types of services — you can even lease your jeans.
It’s Happening All Around Us
In recent years, the idea of a circular economy has received revitalized attention, more so in the international community than in the U.S. The European Union (EU) has issued an influential paper on the subject and is encouraging businesses to use circular economy precepts. Proof of concepts are being substantiated all over the globe and providing hope for a new age beyond the linear economy.
Adidas manufactured more than 11 million pairs of its Adidas X Parley shoes last year utilizing recycled plastic recaptured from ocean waste and is targeting production of a 100% recyclable shoe called the Futurecraft Loop in 2021.
International beverage company Pernod-Ricard will eliminate single-use plastic packaging by next year and has pledged to make 100% of its packaging recyclable, compostable, reusable, or bio-based by 2025.
Eighty-six percent of Danone Group’s packaging is now recyclable, reusable, or compostable, with a target to achieve 100% by these measures in 2025.
Small companies are pushing circular concepts as well; we have to look no further than what’s transpiring in one of our home states here in Idaho. Proud Source Water packages its water in reusable and recyclable aluminum rather than single-use plastic and plows proceeds to ocean cleanup initiatives. Saalt markets reusable menstrual cups that eliminate considerable landfill waste. Our company, Oliver Russell, has developed a prototype lab, PlasticWorks, to upcycle plastic from the waste stream. It’s not coincidence that each of these companies is a certified B Corp, a business model that seeks to harmonize positive environmental and social impact within a profit-driven approach.
While none of these examples demonstrates a full-circular-cycle company, each represents a progressive step forward that shows the possibilities and proves out consumer demand for products produced in these regenerative ways.
It’s Time to Move from a Straight Line to a Circular Cycle
We believe the current situation will lead to a rethinking of what one needs or in the ways in which we are consuming. Pre-coronavirus trends and research support this idea, and we don’t see any way this won’t be accelerated by the crisis itself. Take for example how semiconductor giant Intel is suddenly looking to establish new U.S.-based manufacturing and reduce their reliance on Asian production. While they might not call it “circular,” that’s exactly what this activity is. It strengthens their supply chain by tightening “links” that both increase control and reduce distance; this circular by-product decreases impact by ensuring stronger environmental manufacturing controls and emitting less emissions through reduced transport.
It’s true that current manifestations of the circular economy may be more expensive. However, we believe economies of scale will soon relegate this argument to the past. Buying something, using it once, and then throwing it away will become less “normal” in the future. The same will be true for food waste. Once people have experienced what it means when “nothing is available,” as have many of us during the Coronavirus crisis, it sets the stage to forever change the way we value consumption, food, and goods.
We understand these are in some ways hopes and dreams, but a crisis of the magnitude that we are experiencing presents a rare opportunity to change common behaviors and find new ways to rise up to the threats we face from climate change. Nowhere can we have a bigger impact on this threat than through the way we conduct business; it’s time, for sure, to move from a straight line into a circular cycle in all that we do. Future generations depend on it.
