The business case for sustainability, particularly the circular economy, is a strong one, and more and more researching is backing it up. A recent report by the Business & Sustainable Development Commission pointed to sustainable business models as the key to unlocking trillions of dollars in economic opportunities, and WRAP revealed that brands across the UK saved over £100 million simply by reducing food waste. These figures are significant, but they’re just the beginning.
In partnership with SYSTEMIQ and SUN, the Ellen MacArthur Foundation released a new report, ***Achieving Growth Within***, today that suggests that scaling the circular economy in Europe offers investment opportunities totaling €320 billion. The report identifies priority investments that could provide a major source of regenerative growth and unlock economic, social and environmental benefits, as well as mitigating the risks associated with investing in conventional assets in an era of rapid change. Businesses and governments could benefit from promising investment outlets, and harness the competitive advantage brought about by a circular economy transition.
“Building on the analysis of our 2015 Growth Within, which demonstrated the additional €0.9 trillion benefit for Europe by 2030 from shifting to circular economy practices, this latest report outlines the first steps needed by businesses and governments to realize these benefits. As our current linear growth model becomes increasingly challenged, this research shows how Europe can begin to exploit new opportunities for innovation, growth and resilience, gradually decoupled from resource constraints,” said Dame Ellen MacArthur, founder, the Ellen MacArthur Foundation.
The circular economy stands to have far-reaching benefits for European household, society and the environment, making it a top priority for European governments. Yet in an era characterized by under-investment and stagnant growth, the investments needed to unlock its opportunities yet materialized. This latest report outlines the priority areas for investment to kick-start the transition.
How to engage consumers as suppliers in a circular economy
Hear more from BBMG, eBay and Williams Sonoma on activating consumers as the critical ‘missing link’ in emerging circular models around clothes, footwear and other CPGs at SB'21 San Diego — October 18-21.
With a focus on the sectors of mobility, food and the built environment, which together account for 60 percent of European household spending and 80 percent of resource use, Achieving Growth Within identifies investment ‘hot spots’ which would, by 2025, create an additional 7 percent GDP growth, reduce raw material consumption by an additional 10 percent and produce 17 percent annual lower CO2 emissions, compared with the current development path. Enabled by digital technologies, these ten investment ‘hot spots’ have the potential to scale rapidly (amount that could be invested by 2025 in brackets):
- Mobility (€135 billion): integrating public transport systems with shared vehicles; designing and producing zero-emission cars with reusable components; remanufacturing car components at scale
- Food (€70 billion): shifting towards agricultural practices that regenerate soil and ecosystems; scaling nutrient and energy recovery from waste; scaling indoor urban farming methods; developing new protein sources
- Built Environment (€115 billion): designing and producing multi-usage, modular, energy-positive buildings from durable, non-toxic materials; boosting reuse of building materials; integrating circular economy principles into urban design and development.
The three ‘hot spots’ are in line with the EU’s long-term circular economy strategy and could be kick-started with modest enabling action by policymakers at European, national, regional and city level. Such action is needed to create a policy framework that sets clear direction, removes barriers and facilitates cooperation and innovation, and re-focuses public procurement, investment and existing subsidies towards the priorities identified.
Business leaders must act quickly to take advantage of the ‘first mover’ opportunities within the ten investment themes, in parallel with scaling back investments at risk of becoming ‘stranded,’ according to the report. The circular economy provides attractive opportunities for businesses to build resilience and growth through innovation in product design, business models, resource flows and value creation.
Furthermore, circular economy principles offer a new lens through which to assess investments and mitigate risk that assets will become obsolete as markets are disrupted by digital technologies, and prices are increasingly required to reflect the environmental and other costs of business activities.
“In our study we asked a very fundamental question: what would it take to make Europe attractive to industrial investors? With the help of 50+ experts from the private and public sector, we found that the potential for growth is high and the risk of stranded assets is low. We found these investment themes across the mobility system, food system and the built environment. Each of them looks very different versus traditional linear investment themes: they are not investments purely in new technology or new products — rather in new systems and require a new investment approach altogether,” said Dr. Martin R. Stuchtey, co-founder of SYSTEMIQ.
Alongside the launch of Achieving Growth Within comes a design thinking guide for the circular economy. The Circular Design Guide introduces users to circular economy concepts as well as design thinking techniques. It comprises 24 methods, as well as video interviews with designers, worksheets, case studies and links to helpful technical tools.
The guide also supports complex circular challenges such as re-thinking global plastics flows. This involves a wide range of stakeholders and a fragmented value chain — here, the guide can act as a central, neutral resource on how to design for the circular economy. As such, participants in the New Plastics Economy initiative are already using it to redesign plastic packaging and the systems needed to manage it after use.