Author: Richa Agarwal is a graduate student studying Environmental Sustainability at University of Pennsylvania and is a co-chair of Climate Leader@Penn, a graduate student group on climate action. She is interested in innovation in waste management & circular economy and corporate sustainability in emerging markets.
In the last few months, the world has seen an apocalyptic (almost) epidemic, two devastating wildfires, locust attacks on farms, seasons of record obliterating air pollution in many cities, and the warmest decade on record. These catastrophic events hold the potential to alter our interpretation of the relationship we share with our environment. But the unseen impacts on the environment because of over-consumption, waste mismanagement, and plastic pollution—almost go undiscussed as a climate issue if not unnoticed as humankind currently produces two billion tons of waste per year.
With global resource consumption passing 100 billion tons a year, the world must change its norms as to how we consume in order to mitigate the risks of plastics in the ocean, biodiversity loss, mineral resource scarcity, fossil fuel reliance, and human rights and health care issues for millions of individuals (both formally and informally) involved in waste management activities.
The answer to this problem lies within the applications of a circular economy, or CE. Once perceived as a utopian concept, it is becoming more popular than ever. Trailblazing are some more prominent companies such as IKEA, Dell, Philips, and Patagonia that are already implementing ideas of it and setting the new standards, along with a plethora of organizations trying to solve this puzzle through innovation and partnerships.
As companies can influence design stage and upstream decisions in their supply chain and since the design stage is critical, we need all businesses to take the step and link CE to local solutions and amend their corporate strategy. Ever-increasingly, there are newer and expanding business opportunities that are presenting themselves for the companies that can have buy-in from the c-suite executives.
Different performance indicators for businesses could be developed to measure the circularity of their products based on the product’s life cycle. This could include strategies, solutions, and regulations that impact regions, local communities, and citizens. The aim would be to give companies information based on scenario modeling to assist in strategizing for their waste management and circular economy systems. Instantaneously, I recognize two significant opportunities for businesses to explore while implementing CE:
1. Understanding how companies can leverage local opportunities to create a lasting impact.
Concepts of CE play a significant role for companies in the environmental, social, and governance (ESG) realm; but there is an opportunity for organizations to make a business case connecting all domains of sustainability. As CE shares characteristics with other concepts such as corporate social responsibility, labor market, ecosystem services, the resilience of complex adaptive systems, and the idea of sustainable development itself, it must be extremely region-specific. For instance, if everyday delivery goes online, how does the local superstore or small shops adjust to the change or impact on local waste management ecosystem when companies initiate large scale take-back systems.
Concepts of the circular economy are not a one-pill solution. As recognized by Kevin Moss, Global Director at the World Resource Institute, the circular economy is not a silver bullet for employment, sustainability, and prosperity, and we should consider the possibility of unintended consequences. Through active leadership and action on the part of the businesses, the translation of global trends into national, regional, and commercial pathways would make it possible for circularity to create long-lasting changes (see figure).
Figure: Value level of circular metrics. Source: World Business Council for Sustainable Development, Circular Metrics Landscape Analysis
2. Understanding how transparency in the system, reporting on CE, and learning from other examples can help solve the challenges.
In terms of transparency, it must become essential for companies to report on their CE implementation status as well. The primary reporting guidelines, like the Global Reporting Initiative, are creating performance metrics in this regard. Other thought leaders, such as the UK- based Ellen MacArthur Foundation, are working with interested companies to quantify its circularity status.
Concepts of CE do not work in isolation. They intertwine with concepts of carbon emission and resource use. Thus, companies must trace the life cycle of their resources and emissions in their supply chain. Key Performance Indicators and metrics such as the impact from reuse, reselling, creating replaceable parts, from the take-back system and alike, need to be defined to help companies to keep up timely implementation and track their success.
Luckily, we have a few aids to help us on this journey. Partnerships that do not stifle innovation and agility could potentially enable more local connections and creating more job opportunities. In emerging markets, CE has the potential to improve the lives of waste-pickers that are directly affected by waste mismanagement.
At the same time, we should not discount our past by using biomimicry and regenerating natural design. We might find value in expanding the reach of improvised solutions to improve our wasteful society by revisiting past solutions like that of milk sold in reusable bottles, daily products in reusables containers or soaps without packaging and 100% biodegradable products.
While the world begins to embrace the cold reality of depleting resources and mismanagement of waste, the businesses must plan for the changing role of resource consumption for a better future. We must wake up to realize that there is a limit to resource consumption but not to growth if we are willing to question the business as usual and plan for long-term climate success.
Originally published on April 29, 2020.