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The Circular Economy: Finding Purposeful Ways of Doing Business

If there is no change in market offer, our environmentally friendly civil societies may be forced to introduce extreme ecological measures

(Image source: Anika Huizinga)

Position paper for a commitment on the part of businesses to renew their market offer by adopting the principles of the Circular Economy, the aim being to end the stranglehold exerted by the regulations and the moralizing discourse.


The Issues

The major challenges which the whole planet must confront to limit rising temperatures need no further presentation. The majority of the scientific reports have established the direct link with CO2 emissions. Their sources are well-known. Measurable targets were negotiated in the Paris Climate Agreement, 2015. The first findings in the majority of countries are disappointing. Apart from the climate challenge, three other equally important environmental issues confront us: the decline in the diversity of species, the impoverishment of the soil and the quality of water. Once again, there is little doubt as to the cause. Populations are demanding ever more insistently the commitment of States to in-depth reforms. What is at issue is nothing less than a fundamental change in our lifestyles and production methods. Regulations are voted, businesses comply more or less reluctantly. People adapt their behaviour as best they can.

Emerging from the straitjacket of the regulations and the moralizing approach

To date, States have concentrated their efforts on the provision of recycling facilities, the application of stricter regulations in terms of the effects of air pollution, subsidies for organic agriculture, fishing quotas, or again, for an increase in the share of renewable energy. Each government brings in its own set of new regulations in addition to the old; these are compounded by countless campaigns for the positive accountability of citizens aimed at saving energy or sorting waste. In the last few years a more insidious and moralising form of campaign, alongside measures intended to develop eco-responsible behaviour has spread. Under the aegis of NGOs or public bodies, they impose a moral judgement on the behaviour of individuals. In France the recent crisis of the ‘gilets jaunes’ (yellow vests) protest movements provoked by the rise in the carbon tax on fuel, has proved how dangerous this can be.

It would therefore appear that the only answer we can offer to environmental issues is through endless regulations and the beginning of a form of ostracism threatening the freedom of the individual. We must break this stranglehold or risk plunging into ecological rigorism.

The circular economy is a major paradigm shift

There is a need for a holistic approach to our impact on the environment. Since the 2010 decade which saw the creation of a European framework programme and the Report of the Ellen MacArthur Foundation, a new paradigm in economic terms seems to be taking shape: namely a circular economy is replacing the linear economy. Its source is to be found in the new role in which we now place ourselves in the earth’s ecosystem. If the thought of Descartes, who saw Man as “masters and possessors of Nature”, dominated our modes of thinking, nowadays the prevailing mode tends to be the idea of Mankind as one of the players primus inter pares in an ecosystem. Masters and possessors yesteryear, we functioned in the context of a linear economy — We take, we manufacture, we throw away — based on infinite resources and an unchanging environment. Now that we are aware of the fragility and the finite nature of resources, we are repositioning ourselves as borrowers of resources which we will have to return, transformed but reusable.

An economic system, known as the ‘Circular Economy’ lists the guidelines to follow. The ADEME (French government Agency for Environment and Energy Management) defines it as: [ ] a system [ ] “for exchange and production which, at all stages of the life-cycle of the products (goods and services), aims at increasing the efficiency of the use of resources and decreasing the impact on the environment while developing the well-being of individuals”. The powers that be were the first to recognise the interest of setting their policy in the framework of this new system. The European Commission set up a plan of action in 2015. In France the government Bill concerning the campaign against wastage and in favour of the circular economy has been adopted by the Assemblée Nationale.

But what about businesses? We could of course list all the wonderful industrial innovations like lithium-ion batteries or new service offers such as car-sharing. In contrast, what is lacking in our opinion is the adoption of this new paradigm as a principle of management.

Today it is up to business to endorse the principles of circularity

To loosen the hold which we described in the second paragraph, it is now up to the Supply-side to see it through. It is even in its own interests, otherwise it may be boycotted by citizens for whom labels boasting respect of one or other environmental criterion are no longer enough but who want to be sure of a minimum global footprint as well. The challenge is enormous with countless factors involved. Firms will have no other choice than to commit to a major change. A critical review of the whole chain of value will have to be carried out. The capacity and the spirit of innovation will obviously be key.

A common framework organised around six principles will enable us to structure the approach and to evaluate the path to follow. Its first merit will be to grasp all the elements to be considered: eco-conception, sustainable supply, industrial symbiosis, efficient functioning, extending length of use and finally recycling and re-use of waste. For each of these six principles, there are many examples of innovative solutions. Once adapted as required they will still be subject to regulations but they will be way ahead. A circular supply of products and services will truly respond to the ecological aspirations of citizens. Thus fully playing their role they will enable society to emerge from their present dilemma.

This is a road paved with new technologies and a truly societal awareness; which does not require greenwashing nor bankruptcy. It requires expertise in the management of multi-business projects and public-private partnerships. There is no new guru, simply the will to create the road, singing along with the poet Antonio Machado and Joan Manuel Serrat: Caminante no hay camino, se hace camino al andar.

'' Traveller, there is no road. You are treading new ground ''
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