Bringing Circularity to Life
The extraction of resources from the earth at a rate of 1.75 times more than what nature can generate annually highlights a significant flaw in our current economic system. At the 2023 World Economic Forum (WEF) Annual Meeting, Dutch environment minister Vivianne Heijnen emphasized that "every business model that continues to rely on using natural resources will encounter challenges at some point.” To address this, a shift towards circularity in the economy is essential for businesses to achieve long-term sustainability. However, this transformation requires a systemic adaptation of the current value chain and operations, making it a complex undertaking.
A key issue of the circularity model is that companies usually limit their investments to narrow circular solutions within their own four walls while not taking a holistic approach that considers the systemic benefits of resilience, resource efficiency, and sustainable economic growth. One of the ways to accelerate circular transformation is through cross-industry collaborations. According to Prof. Jagjit Singh Srai from the University of Cambridge, cross-industry associations leverage the development of materials, productions, and digital technologies, allowing us to underpin resource-efficient operating and business models of the future. Additionally, Cenk Alpher, a panelist and CEO of Haci Ömer Sabanci Holding, a Turkish finance conglomerate, provided a simple example of a reverse supply chain model. In this instance, logistics and retail companies can collaborate to collect used materials from products to create more opportunities for recycling or refurbishment. Also, as the technology is here, working together allows companies to bring innovation and ensure that things happen because they can happen.
ACTIONS FROM POLICYMAKERS
A circular economy makes it necessary to develop new solutions, but to do so requires well-functioning policy and regulation to increase and speed up the demand for circular solutions. Companies today are innovating at a breakneck pace, but the policies are not always catching up. Governments must expedite the process by providing supportive and interconnected infrastructure and standards for circularity. For example, as some of these technologies are still too expensive, especially for SMEs, policymakers need to explore tools or frameworks to create business incentives. Another important theme from the session is to "break the silo" within the government. It is no longer sufficient for just one government department to support a circular economic system. All public sector branches must acknowledge the system's transformation by supporting global standards, trade rules, and consistent incentive structures.
Circularity is the path to a growing and resilient Net Zero economy. However, for this to be achieved, businesses and governments must collaborate and take bold actions. The circular transformation of industries has the potential to generate economic benefits of over 1.2 trillion euros and create 2 million new jobs in the EU alone. This transformation will bring environmental and societal benefits and improve efficiency and revenue, creating a more resilient economy.
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