Earth Overshoot Day has moved forward again. How should businesses respond?

Earth Overshoot Day, the date at which humanity has consumed more natural resources than the level renewed in a year, falls on 28 July for 2022 – the earliest date yet. So, how can the private sector ramp up efforts to create a circular economy?


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Earth Overshoot Day has moved forward again. How should businesses respond?

Global Footprint Network, which calculates the Earth Overshoot Days each year, has been marking the occasion every year since 1971 – the first year in which natural resource consumption outpaced the level of resource regeneration.

2021 saw the day being marked on 29 July, the same date as in 2019. These were regarded as the joint earliest Earth Overshoot Days on record, until this year, when the occasion is falling one day earlier.

Resource consumption has been increasing ever since the 1970s, running ahead of efforts to improve recycling, reuse and regeneration. Dutch think-tank Circle Economy has repeatedly stated that humanity extracts 100 billion tonnes of natural materials annually, with less than 9% re-entering the circular economy. This has significant negative implications for climate and nature, and is placing ever more geographies and sectors at risk of resource shortages.

The Global Footprint Network noted in 2020, when Earth Overshoot Day moved back as the global economy slowed amid Covid-19, that a rebound was likely in 2021 and 2022. It also emphasised how efforts to move the date back should be paired with efforts to improve social and economic sustainability, stating that lockdowns and decreases in quality of life should not result from lower resource extraction levels and greater circular economy efforts.

We’re now more than halfway through 2022 and, in the UK at least, it is clear that the pandemic is no longer top-of-mind for policymakers of the general public, as the nation grapples with a cost-of-living crisis exacerbated by the supply chain disruption borne from Russia’s war in Ukraine.

But the move to a circular economy could actually help policymakers and businesses overcome some related challenges, as this article outlines. Here are four interventions that can be made to help push Earth Overshoot Day back.

1) Rethink the business case for efficiency with updated costs

Much research has already been published on how high energy costs are forcing businesses which use a lot of energy to bring forward investments to improve efficiency – like the installation of digital monitors, the roll-out of behaviour change schemes and even changes to equipment. In the UK, research shows this trend in sectors including heavy industry, hospitality and leisure and manufacturing.

Businesses would do well, at this moment in time, to update their business cases for reducing waste across the value chain with updated values of key commodities other than energy in mind. Almost all key commodity costs are up at present, because of the embedded cost of the energy used to make them. Other drivers of cost increases include supply chain bottlenecks, often covered in national and international news for products such as fertiliser and semiconductors.

Price increases have been underway pre-2022 and economists expect them to continue to the end of the year and beyond in many categories. Bloomberg’s general commodity price index was 20% higher than expected in the first two quarters of 2021 and is now tracking an increase of more than 91%. Reducing virgin raw materials consumption will, therefore, make more economic sense than ever before in many cases.

2) Assess the ethical implications of resource exploitation

It has often been said that the pandemic made business decision-makers more understanding of the intersections between environmental sustainability, public health, social sustainability and the economy, with the drive towards a ‘shareholder’ model of capitalism in which businesses have a duty to create benefits beyond profits at all other costs.

Whether some of this debate was lip service is now being tested. A recession is on the horizon and the prediction is an increase in trends like fuel poverty and food insecurity in many places.

Global Footprint Network has noted how these trends, now starting to grip the Global North, have been causing misery for populations in emerging and developing countries for some time. In 2021, it stated that 72% of the population live in areas lacking resource security and also experiencing slow growth in average income. It argues that businesses have a responsibility to develop co-solutions to both issues, creating new skilled jobs across the circular economy system and low-carbon economy.

This could be a necessity for climate and nature as well as people and resources. The Democratic Republic of Congo announced this week, in a move much criticized by environmental and sustainable development advocates, that it will auction 30 oil and gas blocks in the Cuvette-Centrale Peatlands in the Congo Basin forest. This is the world’s largest peatland area and a key habitat for primates. The Government stated that it took this decision after seeing little other options for boosting the economy.

It bears noting that the earth is in a state of overshoot primarily because of over-consumption in wealthy and emerging economies, of resources and products often sourced overseas. If the whole population lives like Canada, Earth Overshoot Day would fall on March 13, for example. The UK’s country overshoot day for 2022  is May 19. The only countries with a December overshoot day are Indonesia, Ecuador and Jamaica.

3) Explore opportunities for business model change…

Organisations including Global Footprint Network, Circle Economy and The Ellen MacArthur Foundation have noted how simply improving resource efficiency as much as possible and ramping up recycling in existing business models will not be enough to significantly push back Earth Overshoot Day. Instead, an economy-wide shift is needed to a system in which fewer raw materials are extracted, fewer products made and everything is kept in circulation longer at its highest value.

For businesses that rely on producing goods – especially those with a short lifespan – becoming ‘one-planet compatible’ will likely include changes to business models. Products in disposable packaging can be housed in reusables; goods can be provided ‘as a service’ and returned for refurbishment; sharing models can be scaled; repair and personalization will become more common. It is also likely that businesses will move towards less complex supply chains to improve material traceability, and are broadly also looking to local supply chains which may reduce environmental impacts but also may mean that not all items are available year-round.

The most appropriate models, and their business cases, will vary from sector to sector and geography to geography. But the bank of case studies upon which organisations can draw is growing – as is the global network of third-party organisations with specialties in these fields.

4)… And press policymakers if models aren’t yet viable

Businesses and policymakers in the UK, where edie is based, have noted that implementing new business models often comes with a significant cost, as these models often do not benefit from economies of scale and must come up against outdated regulations and entrenched cultural norms.

Regulatory hurdles include high VAT on repair services and slow progress implementing Extended Producer Responsibility rules for manufacturers of hard-to-recycle goods. Policymakers have also been asked why the curriculum seems to place ever-less of a focus on basic repair skills.

In terms of cultural norms, to give but one example. Tesco announced this month that it is ending its trial of refillables with Loop. It noted poor consumer uptake in some demographics for some products, especially when people were given the option to refill in stores. Asda has similarly recorded concerns about refillable products being messy, unhgeinic and perceived as more expensive.

Businesses can play a role in collaborating to make policymakers aware of these hurdles and more motivated to remove them. This has proven successful, in the UK, on issues including the implementation of an earlier ban date for new petrol and diesel car and van sales.

Global Footprint Network has also been urging businesses to campaign for legislaton changes beyond business models. In 2019, a whitepaper from the organisation and Schneider Electric recommended that businesses across the food value chain advocate for food waste collections from homes and businesses, noting that this move in France has seen the proportion of supermarkets donating surpluses increase from one-third to almost 100%. The Network also works directly with nations and regions to help them measure and reduce their overall ecological footprint.

Browse our catalogue of resources from previous Earth Overshoot Days:


Free edie Explains report on the Circular Economy

Why is adopting the circular economy so important? How does the circular economy apply to businesses? And, what are the key considerations when going circular? edie and Reconomy recently published a new ‘Explains’ guide that answers all of these questions and more. Click here to download your copy. 


 

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