Last week I attended the Ellen MacArthur Foundation CE100 Annual Summit Royal Institution, London. It bought together leading global thought leaders, academics, companies and practitioners to discuss the most current thinking behind the Circular Economy.
The day kicked off with an outline of the Ellen MacArthur Foundation by CEO, Jamie Butterworth. EMF seeks to rethink and redesign the future through accelerating the transition to regenerative circular economy. They do this through 3 key streams:
- Thought Leadership- the opportunity for a re-design revolution
- Education- Inspiring a generation to re-think the future
- Business- catalysing businesses innovation
Many of the organising principles of the EMF are a synthesis of previous strands of work around moving from a linear ‘take, make, dispose ‘model of consumption and production, to a more restorative and regenerative model where waste is designed out of the value chain and metabolised as either technical materials or serve as biological nutrients safely re-entering the biosphere.
The day was split into four sessions followed by an evening lecture with Eric Schmidt (Executive Chairman, Google) with a lively panel discussing how to ‘change the rules of the game’. Lots of great discussion and ideas uncovered, I’ll endeavour to give you snippets of the best bits!
Session 1: Macro Challenge and Opportunity
Carlos Tavares (COO, Renault) Many leading companies grew up in a world which was more thrifty; instead of turning the heat on, we put on a sweater; we packed sandwiches in foil instead of cling film. Yet the reason we have managed waste so badly is because we failed to integrate personal consumption with business practice and left recycling to environmentalists instead of recognising it as a business responsibility. With the help of EMF, Renault have actively pursued a number of CE techniques within a framework of extrended producer responsibilty; the release of 4 electric car models as well as, remanufacture and repair schemes and leasing the battery of vehicles. The impact is clear; the profitbaility of the plant where these intiatives are based in France are higher than any other renault plant globally.
Jeremy Oppenheim (Principal McKinsey & Company) Emerging economies such as China and India are transforming the fastest, with a rapidly growing middle class (5 billion over next 30 years), business models need to change now in order to positively influence their consumption choices. A vital component is to develop relevant performance metrics at a systems level that encompass the full benefits of CE.
Session 2 : Solution Spaces
Professor Walter Stahel (Founder and Director, Product Life Institute) The change needs to happen here, not necessarily in China or India. He recommends the following policy frameworks: 1. Sustainable taxation, that is, do not tax renewable resources or labour but rather non-renewable resource 2. Do not levy VAT on value preserving activities 3. Use public procurement for innovative business models; that is, buy performance instead of goods. A key outcome- If companies internalise the cost of risk it forms a very strong incentive for risk management and resource efficiency, which will convince more business leaders to pursue CE strategy
Ruben van Doorn (Manager or Operations, Turntoo) We need to shift from a mindset of ownership to performance (buying a service); where we view products as material deposits (can use them over and over again) To do this materials need an identity such as materials passport- which the EU have just accepted as key strategy.
Rachel Botsman (Futurist, Social Innovator and Author of Collaborative Consumption) We are moving towards a sharing economy which untaps underutilised assets. There is strong evidence for changing consumption patterns of generation x; in a recent study done in Germany, 75% 18-24 years olds said they would prefer to purchase a smartphone over a new car; indicating their choice for access over ownership, one where they can build from a basic infrastructure and satisfy individual preferences. She provided a number of recent innovations including LYFT, Airbnb, Solom, Liquid Space, and Lending Club
Professor Dr Michael Braungart (Founder and Scientific Director of EPEA) Sustainability is guilt management; we currently live in fear of nature and need to see it as our partner. Doing less bad such as ‘reducing emissions ‘and doing that well, is doing even more bad. Instead we should be looking at how to do the right thing in the first place! This requires a shift from recycle to upcycle- there is no point in recycling goods which are harmful for the environment- lets eradicate them altogether.
Professor James Clark (Director of the Green Chemistry Centre, University of York) The food supply chain is a great renewable source of molecular value worldwide. Orange peel is a classic example of food waste; 60% of this can be utilised as other materials such as bio oil and starch. Chemists, for too long, have followed old frameworks and compounds to solve problems which are no longer relevant; we need new scientists to think of how we can use materials differently.
Session 3: Rethinking Design
Janine Benyus (Founder, The biomimicry Institute) This is an exciting chapter in an evolving biological planet. We as species have convinced ourselves we are not nature! Yet study of nature has existed for 3.5bn years, how arrogant! E.g. Plant leaves were the first creators of solar cells, how have we ignored this so much? A lot of this is down to a lack of biological info at point of creation; hence we need biologists at the table when making CE business decisions. Natural selection chooses that which is best for life and life products are designed for upcycling. Visit http://www.asknature.org.
Jeremy Faludi (Sustainable Design Strategist and Analyst) We are moving to an experience economy; platforms where users can make their own stuff in circular networks e.g. Facebook, twitter. We need designers and business managers to do the same – work collaboratively and use easy to understand quantitative metrics to help set priorities. This will add economic value rather than just sustainability value.
Peter Childs ( Professorial Lead in Engineering Design at Imperial College, London) Design thinking is expanding the context it addresses, taking on insights from systems thinking and circular economy. Its goal is to bring hypothesis to reality. An example of this is students at RCA who developed a machine which hides a chicken in a machine, yet enables fresh eggs to the consumer every day; you don’t own the chicken but you eat the eggs.
William McDonough (William McDonough Advisors) We do not have an energy problem we have a ‘material in the wrong place’ problem. Being less bad is still bad! You can’t move anything with a ‘lever’, we need a fulcrum – the thing that doesn’t move- and this is our values! The right thing to do is a human value question. Metric is a quantity not quality, you can’t get vision from a metric but you can get metrics from a vision. Upcycling, for example, is a building created for the US government that emits 120% of energy needed; energy creation, not merely a reduction! It is all about positive impact.
Session 4:Leading Company Cases
James Walker (Head of Innovation , B&Q) Finding the right language to pull the right lever is crucial. How can we get something new with business? Extended Producer Responsibility! An example is Project Box, a toolbox which contains everything you need on a daily basis, but not tools needed less frequently (power drill, ladder), these are available to rent. This benefits the consumer as they can lease good quality products rather than purchasing one off cheap ones, and they do not have to worry about maintenance of less frequently used goods.
Neil Harris (Head of Sustainable Business EMEA, Cisco) Technology is a key enabler for the CE. The shift to cloud platforms will enable us to manage systems in a central location. Another megatrend is ‘becoming your own device’, such as having a smartphone and choosing how to extend its use. Another driving force is the internet of things; many devices will have a form of an address and will communicate online. Cisco believes this will become the internet of everything, providing tremendous opportunity for employment, innovation, growth.
Schmidt-MacArthur evening lecture: An economy that works: Changing the rules of the game
Eric Schmidt (Executive Chairman, Google) Eric began by describing his foundation’s interest in education. They take an optimistic view on the world, a world that will change as we have reached a tipping point. Much of the regenerative behaviour of the world will come from the developing world; it is up to the next 5 billion and their choices, to determine how CE principles will pan out. As the new middle classes come online and get connected, it could be a life changing moment. Business should see this as an exciting opportunity to support them with the right architecture. The new model will be driven bottom up, where larger companies will adapt the innovative systems pioneered by entrepreneurs.
The panel went on to discuss the systemic drivers that will enable a shift to CE, and it was collectively agreed that winning the hearts of people was the biggest lever for change. Rethinking our future and reinventing roles, at all scales requires clear goals, leadership, and flexibility to go with the flow, like improv jazz!
Overall, it was an awe-inspiring day. It was the first time so many reputed thought leaders within this field shared the same space, creating a fantastic dialogue and energy. A reminder that there is lots to be done, and reassuring us that we are currently part of one of the most transformative economic phases, to date.
Key barriers: regulation, insurance models, tax, financial services, lack of material information
Key enablers: collaboration, good communication, disruptive innovation, net positive goals, redesign