Much of the circular economy hinges on systems thinking; making it work requires a fundamental rethink on almost every level. Here are four approaches that could help by discouraging the current silo constraints that have pretty much locked us into linearity.
Don’t get too hung up on recycling
Recycling is a valid resource flow loop within the circular economy. That much is true. But, according to Ellen MacArthur, it is also the “last loop of resort”. Why? Well, this article from her Foundation explains it rather well. Recycling generally ‘downcycles’ rather than ‘upcycles’, so we are still left dependent – at some point – on the continued extraction of virgin raw materials. We really need to go one step further and start designing for better; for reuse, for repair, for remanufacture. Recycling will always work well for some material streams, such as certain types of packaging, but for others like electronic waste, it could become a potential system bottleneck to higher value recovery.
Introduce a code of practice for brand pioneers
More and more corporates are investing in this transitional agenda and experimenting with their own business models. But how some of these early adopters approach product design appears to be in direct conflict with the principles of circularity. These strategies, which range from built-in intended obsolescence to active discouragement of third-party repair and remanufacture, should surely be held up to scrutiny. Is there a valid argument now for a code of practice outlining a set of guidelines governing how circularity should work in practice? This code could work on several levels – procurement, product, and purchase, to name a few.
Open up IP (that’s intellectual property)
Intellectual property is fast emerging as a potential strangler of the circular economy. The dispersion of consumer goods, flung far and wide across the world, makes takeback schemes hard work for manufacturers looking to keep ownership of their materials. So why not allow the open market (ie third-party experts) to engage in more widescale product repurpose and remanufacture? It comes down to competition and safeguarding market share. The tools and knowledge needed to engage in this level of disassembly and reverse engineering are often hotly protected by OEMs through patents and closed repair manuals. It goes without saying however that the lifeblood of circularity is collaboration – unless IP is opened up, all good intentions will remain self-limiting.
Underline the ‘economy’ bit
The circular economy is still associated with environmental, rather than financial, gain. It tends to fall within the corporate sustainability spectrum. One specialist investor I spoke to even went so far as to call it “too dreamy” a business proposition. Circular models need to find a way to scale up, and commercial funding for this must be leveraged somehow. Meanwhile a lot of work has been done to outline the macro-economics of circularity – just check out the work of McKinsey, WRAP and Green Alliance in this field. It’s now time to drill down on the smaller picture. For example, to what extent are companies engaging in circular cost-mapping exercises across all tiers of their business, not just on a case-by-case basis?