STRATEGY – 6 things Europe can teach NZ on the circular economy

4 July 2017

James Griffin leads the Circular Economy Accelerator at the Sustainable Business Network. He recently returned from a fact finding tour of the UK. Here’s what he learned.  

1. Money is making the circle go round

A circular economy where the lifecycle of materials is maximised, usage optimised and at the end of life all materials are reutilised makes irrefutable financial sense.

Take a recent study of the Scottish manufacturing sector. It suggested increased circularity could create potential savings of £0.8-1.5 billion ($1.42-$2.7 billion). This equates to around 5-9% of its total turnover. Another study looked at 10 consumer goods categories, such as clothes and food. It revealed potential annual cost savings of £1.5 billion ($2.7 billion). Research in London said the circular economy there could create benefits of up to £7bn ($12.4 billion) a year by 2036.

In response the European Union is providing €650 million ($1 billion) under the Horizon 2020 programme. This will target research and innovation as well as the national circular economy.

2. Plans are forming

Cohesive, collaborative and comprehensive frameworks are the key to successful action. Examples include London’s Circular Economy Route Map and the Circular Glasgow City Scan. They are crucial for high level buy-in. They allow current activity to be better leveraged. They identify key points of intervention and provide justification for associated action.

3. The linear economy is ripe for disruption

There is new money being made in the circular economy. Businesses are sprouting up to contend for it. Snact makes snacks from ‘ugly fruit’ that was wasted. Globechain runs a profitable technology platform for connecting businesses with unwanted products. Existing businesses are also cashing in. For example the brewery JawBrew now makes beer from bread waste.

Start-ups and SMEs are innovating in the circular economy. Corporates are collaborating on more systemic circular challenges. One example is the Circular Fibres Initiative. This is driven by the Ellen MacArthur Foundation set up by the renowned sailor to accelerate the transition to a circular economy. It has involvement from H&M and Nike. Once these ideas become competitive, progress will accelerate further.

4. Big bosses are getting on board

High level leadership translates into demonstrable progress. The Ellen MacArthur Foundation has done a fantastic job in this regard. It is helping to highlight the global opportunity. It is identifying the need for change. This has helped make this issue resonate in board rooms. It is reaching the desks of local and national government policy makers.

The Scottish Government launched its first Circular Economy Strategy in 2015. Making Things Last has sparked significant activity, in particular with Zero Waste Scotland. It has helped make Scotland a leading circular economy nation.

Top leaders at Philips and Ikea, to name just a couple, are assisting this transition. Ikea has committed to support customers to care and repair, rent, share, bring back, and resell its products. Philips CEO Franz Van Houten has helped create the company’s Pay Per Lux model.

5. Momentum is building

We are approaching a tipping point. The value of a shift to a Circular Economy is now well accepted. The only debate is about how fast we need to move. For example the Ellen MacArthur Foundation has grown from a team of about five a few years ago to more than 100. They are about to open an office in China. Zero Waste Scotland has seen a similar growth in staff numbers.

Earlier this month the World Circular Economy Forum was held in Helsinki. It attracted more than 1,500 key people from more than 100 countries.

6. New Zealand is in a prime position

Other countries have a head start on transitioning to a circular economy. But New Zealand can still be a leader if we take the right approach. This process is still new. There is a lot of learning still happening.

Dan Epstein led the sustainability initiatives at the London Olympics in 2012. He said: “If any country is going to adopt the circular economy it will be New Zealand. With your close knit community and island configuration you are ripe for adding value by making more of your resources.”

SBN is seeking organisations to collaborate on the circular economy for New Zealand. To be a part of this growing group, contact james@sustainable.org.nz

Many thanks to the following organisations for sharing their knowledge.