Wednesday, 1 October 2014

Virtuous Circles – a trillion dollar business opportunity that might help save Society

I was quite surprised the other day when an American friend, who is quite active on climate and environment issues, responded to my references to the Circular Economy with 'what's that?'

Since a good proportion of this blog's readers (by the analytics) come from the USA, and since it is anyway a growing, rather than a well-understood concept/practice, I thought a quick introduction might be helpful.

Because the idea is, to my eyes, an important one. As Walter Stahel, the person accredited with first defining 'cradle-to-cradle' industrial process models describes it, this is a paradigm shift in the way we not only do business, but also in the way we understand our relationship with the world as an economically active society.

The basic ideas behind it are summarised on wikipedia, here. The idea is that products and services are designed from the outset to cycle back into their own production processes, creating a system which replicates Nature, by turning what was once called 'waste' into 'reusable material'. It is a long way, almost the opposite to, the idea of a Consumption Economy, which takes resources, makes products (with built in redundancy), then dumps the cast-off.

Not only is a Circular economy (and businesses operating on circular economy principles) hugely better for the planet (since finite resources are used much more efficiently, vastly reducing the dependence on new resource exploitation), but it is also potentially hugely profitable, to the tune of perhap a trillion dollars added to the value of the Global Economy. This alone makes it worth exploring more deeply.

One of the current champions and leaders in the field is a foundation with an implausible central figure, the gamine, 5'2" heroine of global sailing, Dame Ellen Macarthur. There is a nice article on her and her work on euronews, here.

In 2010, this extraordinary person, having conquered the World's oceans and broken numerous records along the way, and having become the youngest Dame in modern history and a Companion of the Legion d'Honneur, put competitive sailing to one side and launched the Ellen Macarthur Foundation (here), designed to promote a Circular economy.

So, some basic resources for you, if your interest is piqued:

 This provides a summary of the main ideas and links to other material.

http://www.ellenmacarthurfoundation.org/business/reports is a core set of reports, compiled with McKinsey, giving detailed information and a considerable amount of inspiration - all three reports are free to download.

http://www.theguardian.com/sustainable-business/circular-economy is one example of a media outlet, The Guardian (UK), both supporting and informing on various initiatives and actions around the World.

The underlying principles are powerful enough that the EU, by 2012, announced that it would be looking at using these concepts to inform future policy decisions. Perhaps it is time in the USA for similar initiative and corporate engagement.

Why this, here, now? Because we are fairly clear that Business as Usual is a really, really, bad idea, for Nature, the environment, poor people, climate change, social order and the future of human society - and this is more than an idea, it is a considered and sophisticated new operating model for a sustainable and healthier society, which might help us turn the corner from what looks like an impending crisis, with real world examples, case histories, financial analysis and substantial corporate engagement.

Hopefully, this will have given you some reason to hope - yes, I think we do need an international agreement to mitigate CO2 emissions, but I also think that our resourcefulness and initiative will move us, step by step, towards the goal of a better kind of world, on the way.