So, what exactly is holding back the circular economy?
It's challenging, it's ambitious - but the appetite is certainly there to make circularity happen within big business. In practice however, an array of stumbling blocks remain as Maxine Perella finds out
Collaboration, collaboration, collaboration – this is the mantra ringing loud and clear in circular economy circles as those leading on the agenda begin to more clearly define the drivers that will make or break this economic transition.
The collaborative challenge underpinning circularity dominated discussions during an airing of the Circular Economy Taskforce’s first report in London yesterday (July 15), where a select gathering of taskforce members, influential stakeholders and governmental officials convened to consider the findings.
Initially set up in 2012 via the UK’s Resource Security Action Plan sponsored by Defra and BIS, the taskforce is led by the Green Alliance and comprises a number of leading businesses including Unilever, BASF, Boots, Interface, WRAP, Kyocera, Veolia and Viridor.
The report, Resource Resilient UK, is a distillation of the taskforce’s first year of work examining how businesses can break out of their linear mindsets and forge new partnerships that will help safeguard them against future resource risk around material scarcity and commodity price spikes.
The report itself looks to drill down on some of the more pragmatic challenges. It not only touches on risk analysis for business, but outlines where circular economy activity is currently most prevalent and asks a fundamental question: what is stopping businesses being more circular now?
In attempting to answer this question, Green Alliance senior policy advisor Dustin Benton told delegates that while businesses could certainly do more to create momentum in closing the loop, government had a clear role to play to enable the right market conditions for this to happen.
“Our analysis shows that companies in the UK want and need to avoid resource security risk. There’s a lot that businesses can do on their own, but the Government needs to help,” he said.
Picking up the partnership baton is crucial here – by way of example, Benton pointed to the possibility of government actively brokering co-operation across supply chains to get materials back, while pushing businesses to redesign their products for better disassembly and recovery.
“We need to de-risk collaboration,” he emphasised. “One key enabler for the circular economy would be businesses setting up long-term contracts, perhaps through joint ventures, with reprocessors and waste management companies to align incentives.”
Such an example can already be seen with Coca Cola Enterprises and Eco-Plastics – the bottle manufacturer is targeting a particular material stream for its own remanufacturing operations and has invested heavily in the infrastructure to extract maximum value from that.
Talking to edie, Veolia’s executive director for external affairs, Tom Spaul said partnerships like this could be the future of how waste is managed in the UK – especially in situations where a big corporation with multiple sites has streamlined its waste management activities to a select number of service providers.
“The big issue for me is the connection with the supply chain – we should be talking to the designers … [waste management companies] are not engaging everybody in the supply chain at the same time, that’s the problem,” he pointed out.
This view was echoed by Kyocera’s director of brand & reputation Tracey Rawling Church, who said there was a huge disconnect between the start-of-life and end-of-life industries – a fact borne out by edie’s own White Paper ‘Closing the loop: risk or reward?’.
“How do you build in producer responsibility right at the beginning?” she asked. “Even if a product is designed for disassembly it still goes through a recycling process that relies on shredding so the value of the output can be incredibly low.”
One area of common agreement was that a safe space was needed for businesses to connect and thrash out methodologies that could enable them to move circularity forward without concerns around intellectual property and competition laws. Such a platform would most likely be facilitated by an organisation such as WRAP which has already done good work in this field through initiatives like the Courtauld Commitment.
“It is critical to have a body such as WRAP to give neutral space for businesses to come together and have that dialogue,” noted Unilever’s global advocacy manager, Hannah Hislop. “We need enabling conditions – we can recreate them for certain parts of our business, like sustainable sourcing of palm oil as we directly procure this from our supply chain, but getting recycled content into packaging, for instance, is a challenge.”
Hislop added that business incentive mechanisms would help in terms of creating a pull factor and would have the added benefit of making companies question how best they could improve their producer responsibility obligations.
However Viridor’s external affairs manager Dan Cooke questioned the merits of introducing strong government-led interventions in the UK when the very nature of the commodities markets are global and dependant on so many factors such as water scarcity issues in developing nations and extraction costs of mining metals.
These far-reaching environmental risk factors and their commercial uncertainties for businesses – particularly manufacturers – are covered in some depth within the taskforce’s report, which also sets out a series of recommendations to protect the UK economy from volatility going forward.
These include quantifying resource security risks for different business sectors to offer clarity around investment decisions. If such risks were measured, it would be easier to set agreed sector-wide goals for smarter materials recovery and stimulate business to adopt the resource-efficient business models that are so badly needed.
Maxine Perella is waste editor of edie
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