Circular Economy and the Triple Bottom Line.
The global economy is built on the consumption of goods and services, to the point where the Gross Domestic Product (GDP), the metric we use to gauge a country’s success, solely gauges what it produces and sells.
It ignores the losses incurred by the systems from which it draws, such as nature and any behaviours that are not economically motivated, resulting in a minimal understanding of value and wealth. In my view, GDP is a huge system failure since it externalizes all environmental effects. This method of calculating the economy is only 70 years old, but it has directly contributed to the current environmental problems, many of which are heightened today including, overuse, unequal distribution, and economic displacement.
What brought us here?
In other words, much of our global economy is built on a linear model — take, make, waste — rather than a circular economic model.
The world must overcome the following five challenges to achieve a genuinely circular economy:
1. MEET CONSUMERS’ EXPECTATIONS FOR CONVENIENCE
Can we expect consumers to change the way they think and the types of products they buy? Will they abandon commonplace conveniences like plastic bottles and bags?
This is one of the most significant challenges we face and a factor that keeps many leaders up at night scaling the balance between profit, demand, and supply. This is also a model of thinking that lacks the radical change we need in holding everyone accountable for their actions. Research experts analysing consumer behaviour find that while consumers seek ‘green products’ and are psychologically inclined to choose what is marketed as ‘better for the planet’, the motivation isn’t genuinely associated with a behaviour shift but momentary satisfaction. This then becomes a struggle to measure sustainability and instead gets stuck with frivolous ‘nice to haves’ instead of an accepted overhaul into how we exist and coexist. This means how we think, act, need and want as consumers and producers must change, and we are all responsible.
2. GOVERNMENT REGULATION CAN CREATE WASTE
For example, expiration date labels are often required by law to protect the consumer. Many of which maintain a shelf-life months after the date, and many sensitive to the date. Where do these end up?
Are we doing enough to not only offset but proactively loop the ripple effects if we don’t? How are businesses, manufacturers and corporate leaders taking accountability, to initiate stronger distribution efforts into greater circles of ‘need’ on a macro level to avoid waste, pollution and accelerate positive consumption and habits of repurposing into society?
There are huge gaps in the structure, vision, system, and process of mitigating consumer goods into a full-service cycle. Yet, these are reasons there is tremendous opportunity to create and innovate. These are the non-sexy aspects of the business but the stark reality of what contributes to bottleneck planning and bureaucracies — the time-consuming things that we don’t like to think about but sadly, are the things that, if we don’t, as we are already experiencing, have catastrophic global consequences. From degradation and overuse of natural resources, greater economic disparity among nations, untapped human resources and overdrive from patterns that do not serve a greater purpose.
3. MANY PLACES LACK ADEQUATE WASTE INFRASTRUCTURE
The world generates 2.01 billion tonnes of municipal solid waste annually, with at least 33 per cent of that — extremely conservatively — not managed in an environmentally safe manner. Worldwide, waste generated per person per day averages 0.74 kilograms but ranges widely, from 0.11 to 4.54 kilograms. Though they only account for 16 per cent of the world’s population, high-income countries generate about 34 per cent, or 683 million tonnes, of the world’s waste. — Where do we go from here?
The greatest price is paid by the world’s lands, rivers, and oceans and unimaginable living conditions for many in the developing world where the waste management is a far cry from decent.
Projected waste generation, by region (millions of tonnes/year)
For the longest time, we’ve looked at waste management as a singular backyard responsibility. It is not. Waste management needs to be a critical part of every business, industry, and sector of life. How we dispose and set up the infrastructure for this to work outside of a collection process needs to revolve around living with a sense of responsibility in what we do.
4. RECYCLING TECHNOLOGY IS NOT CHALLENGED ENOUGH
The world’s recycling is in chaos. Globally, more plastics are now ending up in landfills, incinerators, or likely littering the environment as rising costs to haul away recyclable materials increasingly render the practice unprofitable.
In England, more than half a million more tons of plastics and other household garbage were burned last year.
Australia’s recycling industry faces a crisis as the country struggles to handle the 1.3-million-ton stockpile of recyclable waste it had previously shipped to China.
Recycling is controversial to many. The reality is, recycling for the mere purpose of getting a pat on the back, a green sticker from the advisory panel or social marketing boost is not enough and can be retroactive in thinking more along the lines of ‘what else is there that I can do? — if the bar of satisfaction is not challenging the limits enough in the direction we need, to curb the issues we face.
Recycling technology is far from perfect, let alone working to keep up and, like the issues raised in this piece; are a constant struggle for one main reason — consumer demand and profit. We are measuring the wrong things while trying to do the right thing. Until we can significantly burst the bubble on this, only then will existing systems be in a better position to verify what works and what does not.
We need to stop negotiating and operating in a grappling of, as-much-as-we-can-get within a certain financial period to only after revisiting the idea of assimilating a strategic plan that thinks of the impacts. This behaviour is not sustainable.
5. WE USE THE WRONG BUSINESS MODELS
For the longest time, the end game for most all companies is to make a profit, but that doesn’t mean they have to do so, without respecting their impacts on societies and the environment. Companies that embrace the triple bottom line are concerned with how their businesses affect people, both employees and citizens at large in the communities they serve.
They also track their environmental impact and approach their work sustainably so that the planet does not suffer as a result of, their line of business.
The world is on track to exceed 9.5 billion people by 2050, with far fewer living in poverty than today. This is a human development victory, but a grave threat to our environment unless the businesses that produce and sell goods can reinvent how they do so to offset aftereffects.
It is here we must recognize the circle of business we choose to operate and question how to: align product with positive needs, responsible consumption and accountable metrics that continue the wheels of operation from growth to production to consumption and into a complete phase of repurposing activity directly into essential services removing excessive of waste.
In overcoming these obstacles, it is clear to see, a global way of thinking, collaboration and partnership between industries is required to bridge the gaps.
Innovative public-private partnerships are required. Companies, investors, governments, and civil society organizations all have distinct financial, intellectual, and operational assets that may be strategically deployed to solve large challenges that they couldn’t handle on their own.
No one business has all the answers when it comes to offsetting the challenges we face today if we are not building a global community of committed business leaders to accelerate action and progress.
The World Bank, for example, discovered that private-public partnerships to build water infrastructure in Africa were most effective when funded by a combination of private and public sources because public funding reduced risk for private investors and private investors’ return requirements improved efficiency and prevented cost overruns.
Our future hinges on our ability to reuse what we already have in a sustainable manner. This, in turn, needs to be met with new attitudes to foster significant behavioural changes and values we accept towards everyday living.
Fortunately, one resource that is limitless is innovation, and many businesses are coming up with inventive ways to minimize, reuse, and recycle waste.
A Few Interesting examples of creativity at the service of sustainability is ‘CIRCULAR PRODUCT DESIGN’
CREATING PRODUCTS FROM RECYCLE TO REUSE
“Futurecraft Loop” is ADIDAS first running shoe engineered to be remade.
The high-performance running shoe was meticulously built in collaboration with manufacturing and recycling partners so that it may be returned to Adidas, broken down, and repurposed to manufacture new high-performance running shoes.
PROTIX upcycles food waste into sustainable protein for fish, chicken, and pets. The Dutch company invested €35 million in an industrial-scale production facility where it uses food waste to breed blackfly larvae, which it harvests to form high-value insect protein products.
USE, REUSE, SHARE, AND REPAIR
Creating durable goods from recycled and reused parts can be inputs for downstream circular business models. Here are a few examples of this in action:
CIRCO is a baby clothes (and maternity wear) subscription service in which subscribers pay a monthly fee to have a variety of high-quality apparel from various brands delivered to their door. When babies outgrow their clothes, they are returned, cleaned, and redistributed to another customer, reducing waste and maximizing the apparel value while also providing convenience to customers.
Take the example of WESTIN HOTELS & RESORT:- turning its used bedsheet into sleepwear to be donated to charity (Project Rise: ThreadForward)
WESTIN HOTELS & RESORT Project Rise: ThreadForward, is a new initiative to turn old or damaged hotel linens (a.k.a “ragouts” in industry parlance) into sleepwear — and donate them to charity. It’s the first large scale textile upcycling program in the hotel industry.
THE CARLSBERG GROUP have initiated a partnership with the Danish company ecoXpac, Innovation Fund Denmark and the Technical University of Denmark to develop the world’s first fully biodegradable beer bottle made from wood fibre — the Green Fiber Bottle. The bottle will be as light as a PET bottle while having the advantage of being created from bio-based sources.
IKEA kicked off a large-scale furniture buyback program on Black Friday last month. Twenty-seven countries, including Germany, Australia, Canada and Japan, will be part of the project Ikea calls “Buy Back.” Where available, customers can receive up to 50 per cent of an item’s original price in the form of a store voucher. Items not resold will be recycled or donated to local community projects, according to the company.
If you are looking for inspiration about the Circular model in Hospitality, visit the QO Hotel in Amsterdam: QO Amsterdam | A Refined, Sustainable Amsterdam Hotel Experience (qo-amsterdam.com).
As they put it “we don’t think that you need to compromise on luxury to be meaningful. We think it’s crucial they coexist. We want you to live well and feel good. Let’s both look after the planet while we make that happen.
The reality of it all is, the greatest change of all will need to come in the form of redesigning how we consume and produce. This needs to be a universal factor from farming, processing, production, distribution, and consumer culture, habits, and behaviour.
We all have a role to play in this, and the steps we take as individuals, a company or society at large, must be rethought to gauge a positive impact. The cost of consumption cannot be greater than the cost to live.