Circular economy is for many the answer to issues such as resource scarcity, environmental issues and waste and at the same time considered to be the driver for endless innovation.
A new circular world economy seems to be the right thing to strive for. But don’t we have to ask ourselves if we have considered all necessary dimensions of implementing a new economy before we throw ourselves into it? Is circular economy the answer to all problems and how do we do it right? Green Network here brings an interview with Alex Lemille – a circular economy expert, the founder of Wizeimpact and in 2013 part of the Circular Economy 100 club of companies (with the Cisco Systems).
In your opinion, are there any dimensions that we are missing in the equation of creating a circular world economy?
“The circular economy as defined by The Ellen MacArthur and being influenced by several thinkers and innovators, is an amazing concept by itself if we take the time to go deep enough to understand the underlying positive effects that such model could generate when all elements of the puzzle are in place. Yet one cannot say that the circular economy is a response to all our problems and sins. There are many other dimensions that could shape the current definition differently according to cultures, beliefs, and other norms.
If the focus remains within economic dimensions and its profit maximisation sole goal, we are missing the point in my view. Why? Because this is not about closing the loop anymore. Our challenge is about closing the many ‘gaps’: resource gaps, social gaps, inequality gaps, energy gaps, etc. There are so many of those gaps that businesses have to support governmental and non-for-profit organisations efforts with two additional dimensions:
– firstly, the social dimension. Circular Economy is very much focused on the economic resilience with the resources that we have at our disposal, which is already huge in itself. But we know we cannot dissociate the economic from the environment and thus from the people. One does not go without the other two. If you don’t get the buy-in from local communities as in ‘how will this benefit me and my people over the long-term?’ your circular effect will never ‘spin’… So the circular thinking should also focus on addressing social and societal problems applying the very same logic;
– secondly, we have a problem… Through internet, the television, and that the ‘best way of living’ is in an extreme consumerism world, we are programming billions of people moving into the medium income range, that earning money is the sole most important goal in life. Within your personal and professional life, if you do not earn a good amount of money, if you cannot ‘keep up’, you are considered as being unsuccessful. The second missing dimension – in my view – is to redefine and widen the notion of what ‘success’ means.”
Why are those dimensions so important?
“Both the social and the ‘success’ dimensions are critical should we wish to create a benefiting next economic model. Because, unless I am wrong, we are looking at building a new economy that will create abundance of resources and abundance of benefits to all of us. Otherwise what is the point of re-creating an economic paradigm? Notwithstanding that citizens are now connected and in a peer-to-peer democracy mode. Gone are the times where the top used to decide for the rest.
A strong emphasize on the social dimension will help us not only design our product-of-services with the resources that we have available to us, but would avoid create further inequality, unemployment and inaccessibility of an economy that has become today the famous 1% one only. Creating a model that integrate all types of customers in a highly versatile service economy is possible, and is doable, for the 100% this time.
The dimension that relates to the redefinition of success is also taking us back to the early days of trade. To be seen as successful we have always built fortunes that have no real limits. These financial empires have not been able to help us address our environmental, our social and even our economic issues, on the contrary. They have been concentrated in few hands and have kept destroying norms and values. Should we wish to see our next model, a circular one hopefully, we would need to rethink our value system. If I decide as a manager to invest in a specific project that would generate 200% of profits next year, but would made some people redundant and destroys environmental values, am I advancing the circular economy? Yet, my variable salary is on short-term financial pay-backs. If you do not reconsider how we – as employees, managers and chief executive officers – are being rewarded, beyond just the narrow-minded financial reward, the circular economy will not generate the benefiting effects we believe it will, or possibly, but not within the short timeframe we have to fix some of the upcoming challenges.
Could the circular economy prosper in our current system? What do we need to change?
“With low commodity prices, we will see the early adopters struggle to go to the masses. Yet market volatility remains high and uncertain. So uncertainty will lead to the slow adoption of this economic model. What has been great to see so far is the adoption of renewable energy all across the world. Countries compete to be the ones relying solely on renewables while generating many economic returns thanks mainly to cost savings achieved. Governments have a role to play in adopting policies that will incentivise the good behaviours. Europe and China are leading in that space. Yet, we need to remember that circular economy should not solely be a way to generate more profits. It should become this benefiting and resilient model that would take us to the next level. One of the father of Circular Economy – Professor Walter Stahel – explains that humans are the next renewable energy. In an economy where we need to maintain our stock of material and equipment, we could use manpower as an endless source of versatile power to use, reuse, repair, repurpose, maintain or remanufacture our goods. He has suggested to lift taxes off what is desirable – manpower/work – and tax what is not desired in our economies: fossil fuel based activities. While I have not seen any government applying this tax shift suggestion I believe we are still very much into our carbon era thinking and do not commit to the necessary drastic change we need to see happen. Also, how about seeing Cradle-to-Cradle certifying products that have the ability to accelerate the integration of more people into our economy? How about listing all the environmental and societal challenges and incentivise companies that reduces burdens? These are usually called social enterprises or social businesses. They should become the norm in a circular economy, no longer the exception.”
In your opinion, is it the right actors, who drive circular changes right now?
“Every organisation drive the discussion around circular economy and its concepts and principles are the right actors, and they do a great job. Governments need to step up and play their enabler role by focusing on incentives and, by rewarding companies that help them achieve milestones. But leadership and vision is missing in governments. Across the globe it is difficult to list visionary government heads who understand our world of tomorrow… We have too many fingers! Leadership is lacking behind also at universities and businesses. We need to train and teach more people to circular principles as a priority. After all, it is one of our solution to fight climate change, so it should be at the top of our lists at schools and in our offices. Lastly the people are the answer. The top-down approach has huge limits and we unfortunately cannot rely on it to address upcoming challenge. The bottom-up approach can achieve amazing results. I recently watched the documentary called “Tomorrow” by Melanie Laurent and Cyril Dion. What Elango Rangaswamy has achieved in the Indian village of Kutthambattam by mobilising the crowd is mind-blowing: from violence and pollution, to a very balanced participative economy. If we could replicate this approach to villages in India, Asia, Africa and elsewhere, the people could achieve in no time what the United Nations have tried to do in decades.”
Which role should big companies play in the transition to a circular economy?
“First of all, leave the stage to small and medium size companies. Too often, they take the stage and do not allow smaller entities to expand. In a circular economy, we are adapting to a collaborative world where resources will be so scarce that what I call the “Collaborativism” – i.e. the survival of companies thanks to symbiosis of material flows and participative activities (like the many functions a tree provides to other species that the tree does not need for itself) – will take the lead over competition. Interdependence of one entity within a wider economic network as well as exchange of resources benefiting one another will be happening between large-to-medium-to-small companies, and vice-versa, in a much optimised way. Secondly, work in open source so that the acceleration of knowledge sharing could spur innovations and thus solutions to global problems. Lastly, stop growing exponentially, but laterally. Large companies should produce locally to reduce transport costs, CO2 emission, while increasing value to the targeted market by customising its products (local supply chain partners, customised languages, etc.), employing its manpower improving skills with the aim of keeping its product value at all-time high. Customised products offered as-a-service will be sent back to the remanufacture once products value has to be recovered and products prepared for their next life. New actors will be empowered in order to service the targeted geography circulating goods as service the fastest way possible between different customers to optimise value creation while increasing customer satisfaction.”