Can the Circular Economy Save Us? Experts are Betting on It

With the global economy in a free fall and much of the world in crisis mode, the tendency can be to focus on putting out the little fires rather than look up and see the real threat on the horizon: a planet in big trouble. For Accenture’s Peter Lacy, co-author of The Circular Economy Handbook, the circular economy is the blueprint to recovery, and there’s no time to waste.

The circular economy offers business a way to step up

“You can't be a successful business in a failing economy or failing planet. That's really where it starts. The global economy has been in free fall at points in the last three or four months in ways that we haven't seen in 200 years of economic history. It’s not the way we would have wanted to go about it, but it has opened up a window of opportunity,” Lacy told TriplePundit. “We've entered a very important and critical juncture in the global economy and maybe even in human civilization, and business needs to step up and be counted on, both in its own interest and also in the interests of societies around the world, if not humanity.”

Lacy is Accenture Strategy's senior managing director for Europe as well as the United Kingdom and Ireland. He also sits on Accenture’s Global Leadership Council and leads the firm’s work with the World Economic Forum. For him, and co-authors Jessica Long and Wesley Spindler, the circular economy is the most palpable way a business can step up. The Circular Economy Handbook is built on insights from 1,500 case studies (300 of which are in the book) to give companies a practical view on how they can take transformative steps toward circularity and create new competitive business opportunities.

A $4.5 trillion opportunity at stake

There is $4.5 trillion at stake by 2030 by radically departing from the traditional “take-make-waste” production and consumption systems, according to Accenture’s 2015 book Waste to Wealth. Lacy says he sees three mandates for business in this current economy — and that the circular economy is the way to rise to those challenges:

“The first is that the model of globalization and the model of capitalism that we've pursued globally has created enormous inequalities and has probably created a situation where it's now going through one of its most fragile phases,” Lacy says. “We need to rebuild a system that is fair, produces social justice, reduces inequalities, and tackles many of the things that many people care about in a way that isn't just beneficial for the few, but for the many.”

He adds: “The second is the Fourth Industrial Revolution is really only rhetoric at the moment in many respects. There is the potential for an incredible cluster of scientific and technological triple breakthroughs to deliver an industrial revolution that truly creates benefits for many different constituencies. But as of yet, those technologies have not been put to use in a way that has truly created the Fourth Industrial Revolution and truly achieve their potential to benefit humanity.”

Finally, Lacy emphasizes how the final mandate adds to the sense of urgency:

“And the third piece is that we have not yet created either a macro- or micro-level model that really hardwires and softwires into the global economy and how companies operate, the absolute necessity to deliver on the U.N. Sustainable Development Goals in the next decade.”

The circular economy is a chance to reinvent a failing system

Now, the novel coronavirus pandemic has broken wide open both the weaknesses and potential strengths in the way the modern world functions. But now there is the chance to inspire economic systems to change on an unprecedented level, as we’ve seen with the Build Back Better movement among some government and business circles.

“There are suddenly tipping points in the next decade that have truly prepared us for a pathway to sustainable development in the future,” Lacy says. “The circular economy is not a panacea, but it is one very important way of reframing and rethinking the relationship between the economy and the use of scarce or harmful natural resources in ways that allow companies to innovate and think creatively about their business models, their products and services, and the partnerships that it takes to deliver those while being commercially successful.”

Circular innovations can yield business benefits

For companies that have successfully applied the concepts of the circular economy, there are numerous benefits, Lacy adds: “Revenue growth comes through cost reduction, through risk management, through intangible assets, brand and reputation, as well as quantifiable material, circular economy and sustainability impacts.”

One example is Winnow, which both won The Circulars “Ecolab Award for Circular Economy Tech Disruptor” and the overall “Winner of Winners Award” at the World Economic Forum in 2019. Winnow’s aim is to have a global impact on food waste reduction in large-scale kitchens. Its technology provides chefs with the digital tools to quickly and easily measure waste and the analytics to pinpoint waste reduction opportunities. Winnow’s existing manual system is already used by thousands of chefs in more than 40 countries, and the company told VentureBeat it has helped save the equivalent of $30 million in food from ending up in landfills.

Another company Lacy raises as an exemplary case is global beer giant AB InBev, the innovations of which 3p has covered previously. AB InBev’s breweries already achieve an average 98 percent recycling rate for packaging material. By 2025, 100 percent of its product will be in packaging that is returnable or made from majority recycled content, the company has pledged.

Then there’s Loop, which 3p and many have described as the “milkman model reimagined.” The company offers a circular shopping platform that focuses on packaging of everyday essentials like shampoos and toothpaste, transforming them from single-use disposals to durable, refillable and feature-packed designs. The pandemic has spiked a rise in single-use plastics, in part out of fears that reusables are less hygienic. But as Heather Crawford, Loop's global VP of marketing and e-commerce recently told 3p, that simply isn’t the case: “Single-use is not sterile, either.”

Pivoting investments toward the circular economy

While Lacy and his colleagues have collected hundreds of examples like these across every industry in The Circular Economy Handbook, there is no one path that will fit every business. And given a recent report suggesting that the world is only 9 percent “circular,” there is still a long way to go. The point, however, is to do something. “If ever there was a moment for large-scale systems change, it is now,” Lacy says.

What makes Lacy optimistic is what he describes as all the good work being done already, and that some governments, notably the European Union, are using the wake-up call of the pandemic to put stimulus funds into a transition toward a low-carbon and circular economy.

As Lacy sums up: “There's a good chance that those chunks of investment can be a pivot and an accelerant of some of the bigger investments that are required. We certainly can't afford to miss that window of opportunity, but I am cautiously optimistic that governments are looking to use the necessary COVID spending to stimulate the economy and to empower companies to use it to pivot their infrastructure.”

Editor’s Note: Amy Brown served as copyeditor for The Circular Economy Handbook.

Image credit: Tine Ivanič/Unsplash; Nicola Ricca/Unsplash