Turning waste into raw materials creates value for businesses

Circular Economy just became sexy!

Did you know that the EU is going to save EUR 600 billion and create 580.000 jobs by transforming to a circular economy? Oh, and reduce green house gasses by 2-4%, too.   Today’s linear economy is outdated. We produce massive amounts of waste just in production of goods and only a small portion of that waste is recycled or reused. Why? Just because of old habits, old business models and old ways of thinking. So can we think and work differently in in how we handle waste? And earn money on it as well?  Yes, we can. And it is called circular economy. Simply put, circular eceonmy  is a system where one persons waste is another persons raw material. And the beauty of it is that you create more value while doing it.   

Did you know that the EU is going to save EUR 600 billion and create 580.000 jobs by transforming to a circular economy? Oh, and reduce green house gasses by 2-4%, too.

 

Today’s linear economy is outdated. We produce massive amounts of waste just in production of goods and only a small portion of that waste is recycled or reused. Why? Just because of old habits, old business models and old ways of thinking. So can we think and work differently in in how we handle waste? And earn money on it as well?  Yes, we can. And it is called circular economy. Simply put, circular eceonmy  is a system where one persons waste is another persons raw material. And the beauty of it is that you create more value while doing it. 

 

Image caption: A circular economy is an industrial economy that promotes greater resource productivity aiming to reduce waste and avoid pollution by design or intention, and in which material flows are of two types: biological nutrients, designed to reenter the biosphere safely, and technical nutrients, which are designed to circulate at high quality in the production system without entering the biosphere as well as being restorative and regenerative by design. This is contrast to a linear economy which is a 'take, make, dispose' model of production. Definition by Ellen McArthur Foundation.     Let’s not even begin to talk about garbage OK, let’s talk about it a little bit. In the EU, 800 million tons of waste still go into landfills according to David Parker Jones, the President of  the European Federation of Waste Management. And God knows how much goes into our oceans. Even after years of Lean Manufacturing, we still let so much value go to waste. It is very important to note that circular economy is not just about recycling. Actually, recycling is the least value-capturing loop according to product development specialist Eric Hannon of McKinsey (link: http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/why-the-circular-economy-is-all-about-retaining-value).  

Image caption: A circular economy is an industrial economy that promotes greater resource productivity aiming to reduce waste and avoid pollution by design or intention, and in which material flows are of two types: biological nutrients, designed to reenter the biosphere safely, and technical nutrients, which are designed to circulate at high quality in the production system without entering the biosphere as well as being restorative and regenerative by design. This is contrast to a linear economy which is a 'take, make, dispose' model of production. Definition by Ellen McArthur Foundation.

 

 

Let’s not even begin to talk about garbage

OK, let’s talk about it a little bit. In the EU, 800 million tons of waste still go into landfills according to David Parker Jones, the President of  the European Federation of Waste Management. And God knows how much goes into our oceans. Even after years of Lean Manufacturing, we still let so much value go to waste.

It is very important to note that circular economy is not just about recycling. Actually, recycling is the least value-capturing loop according to product development specialist Eric Hannon of McKinsey (link: http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/why-the-circular-economy-is-all-about-retaining-value).

 

Image caption: In this edition of Euro News’ Real Economy, you will be taken on a journey to discover how our waste can become sustainable gold – powering the circular economy of tomorrow. Playin time 12 minutes.   (link: http://www.euronews.com/2016/01/25/cradle-to-cradle-powering-europe-s-circular-economy ).   Those who get it and those who don´t You no longer have to be an environmental saint, a climate fanatic, or live off the grid to get devoted to the idea of circular economy. The good news for all the spreadsheet loving men and women out there is that there is a positive business case! The bad news is: if you haven’t started re-thinking your business models or production lines yet, you’re probably in trouble.   ”There are those who get it, and those who don’t. And those who don’t basically live in the past. First, they will be punished with massive extra cost, as regulations will push the change to circular economy. Then, they will miss out on the value that their competitors have created by being first movers in applying circular economy principles.“ -       Parker Jones   Why am I so excited? Well, first of all I love the idea of doing well by doing good. I know that in order to make the green shift - or any shift for that matter - in business, it has to be economically viable. We have been told about the threats for years now on how the planet is about to be deprived of natural resources and in fact; According to WWF we will need 1,6 planets in 2050 if we carry on spending resources like today. That’s 0,6 of planet that we don’t have.   And why do we continue doing all the wrong things? It is because it is so hard to change our behavior and it is so hard to make environmental change only by punishments and threats. Why? Probably because we are humans. And humans seek instant gratification and generally resist change. And because we are business leaders, and our KPI’s are about short term economic value to the business; Money. Change happens slowly if we don´t see the upside. The beauty of Circular Economy is that the upside is huge; we just need to see how to make it happen.   -       We don’t even have to rely on business leaders being socially responsible. We just have to rely on them making sane business decisions.   And that is what we are paid to do. Businesses simply need to go circular to remain competitive. Also for me - as a leader of a design agency - I am specifically excited about the fact that we can have a huge impact in making the change towards a more sustainable world. And that is an attractive position to be in!   The designer’s role There are several roles designers can play in making this change. Some of them are described below. Please feel free to make more suggestions. ·      Industrial design. As David Parker Jones says it: “80% of the of the environmental footprint lies in the design of the products”. Of course, we are constrained by the customers’ business models and existing linear production lines. But if we don’t start designing products that can be taken apart and reused and easily fixable, who will?  Also, when it comes to packaging, we naturally need to be wise in selecting materials that are naturally degradable or recyclable. Or even better, re-usable! And ultimately, no packaging at all. ·      Design systems, not products. Instead of just designing what the customer wants, try looking for ways of changing the business model to use instead of buy. For your business, is it possible to create a service that let people get access to what they need instead of owning a product? Example: A drill gets used for approximately 13 minutes in its lifetime… A design team can work creatively in identifying new approaches to fulfill your value proposition and your customers’ needs. ·      Facilitation. Companies that want to move to a circular economy need to organize the work in cross functional teams. Designers are excellent in facilitating multidisciplinary teams, and make specialists come to a common understand based on the needs of the people, the businesses and the world. ·      Complexity crunching. Designers are brilliant when it comes to simplification. System designers understand complexity and are able to visualize the new ways of working that are necessary to get started with circular economy. Understanding complexity, connecting the dots, simplifying, and then visualizing new, believable concepts can be redemptive and release the motivation to try out new ways.  

Image caption: In this edition of Euro News’ Real Economy, you will be taken on a journey to discover how our waste can become sustainable gold – powering the circular economy of tomorrow. Playin time 12 minutes.

 

(link: http://www.euronews.com/2016/01/25/cradle-to-cradle-powering-europe-s-circular-economy ).

 

Those who get it and those who don´t

You no longer have to be an environmental saint, a climate fanatic, or live off the grid to get devoted to the idea of circular economy. The good news for all the spreadsheet loving men and women out there is that there is a positive business case! The bad news is: if you haven’t started re-thinking your business models or production lines yet, you’re probably in trouble.

 

”There are those who get it, and those who don’t. And those who don’t basically live in the past. First, they will be punished with massive extra cost, as regulations will push the change to circular economy. Then, they will miss out on the value that their competitors have created by being first movers in applying circular economy principles.“

-       Parker Jones

 

Why am I so excited?

Well, first of all I love the idea of doing well by doing good. I know that in order to make the green shift - or any shift for that matter - in business, it has to be economically viable. We have been told about the threats for years now on how the planet is about to be deprived of natural resources and in fact; According to WWF we will need 1,6 planets in 2050 if we carry on spending resources like today. That’s 0,6 of planet that we don’t have.

 

And why do we continue doing all the wrong things? It is because it is so hard to change our behavior and it is so hard to make environmental change only by punishments and threats. Why? Probably because we are humans. And humans seek instant gratification and generally resist change. And because we are business leaders, and our KPI’s are about short term economic value to the business; Money. Change happens slowly if we don´t see the upside. The beauty of Circular Economy is that the upside is huge; we just need to see how to make it happen.

 

-       We don’t even have to rely on business leaders being socially responsible. We just have to rely on them making sane business decisions.

 

And that is what we are paid to do. Businesses simply need to go circular to remain competitive. Also for me - as a leader of a design agency - I am specifically excited about the fact that we can have a huge impact in making the change towards a more sustainable world. And that is an attractive position to be in!

 

The designer’s role

There are several roles designers can play in making this change. Some of them are described below. Please feel free to make more suggestions.

·      Industrial design. As David Parker Jones says it: “80% of the of the environmental footprint lies in the design of the products”. Of course, we are constrained by the customers’ business models and existing linear production lines. But if we don’t start designing products that can be taken apart and reused and easily fixable, who will?  Also, when it comes to packaging, we naturally need to be wise in selecting materials that are naturally degradable or recyclable. Or even better, re-usable! And ultimately, no packaging at all.

·      Design systems, not products. Instead of just designing what the customer wants, try looking for ways of changing the business model to use instead of buy. For your business, is it possible to create a service that let people get access to what they need instead of owning a product? Example: A drill gets used for approximately 13 minutes in its lifetime… A design team can work creatively in identifying new approaches to fulfill your value proposition and your customers’ needs.

·      Facilitation. Companies that want to move to a circular economy need to organize the work in cross functional teams. Designers are excellent in facilitating multidisciplinary teams, and make specialists come to a common understand based on the needs of the people, the businesses and the world.

·      Complexity crunching. Designers are brilliant when it comes to simplification. System designers understand complexity and are able to visualize the new ways of working that are necessary to get started with circular economy. Understanding complexity, connecting the dots, simplifying, and then visualizing new, believable concepts can be redemptive and release the motivation to try out new ways.

 

Image caption: The Urban High Rise Concept /2013 is an example of a circular economy solution that EGGS did with a client. The purpose was to create a future concept for sustainable water handling in green buildings.   You’ll see it when you believe it Very often, when we work with innovation, we have to change not only what people think, but how they think. Without the right mental model, they won’t see the problem, understand the benefits, or make the change. Fortunately, there are now a number of companies, and even cities that are showing the way. One of my personal favorites is how Amsterdam has become a laboratory for the circular economy.   What about you? Do you have any good examples of circular economy you can share with us? Please write and linkin the comment field below. I look forward to hearing from you!   PS. If you want to dig into the details of what Circular Economy means for business, I recommend Ellen MacArthur Foundation’s guide (link: https://www.ellenmacarthurfoundation.org/assets/downloads/TCE_Ellen-MacArthur-Foundation-9-Dec-2015.pdf)

Image caption: The Urban High Rise Concept /2013 is an example of a circular economy solution that EGGS did with a client. The purpose was to create a future concept for sustainable water handling in green buildings.

 

You’ll see it when you believe it

Very often, when we work with innovation, we have to change not only what people think, but how they think. Without the right mental model, they won’t see the problem, understand the benefits, or make the change. Fortunately, there are now a number of companies, and even cities that are showing the way. One of my personal favorites is how Amsterdam has become a laboratory for the circular economy.

 

What about you? Do you have any good examples of circular economy you can share with us? Please write and linkin the comment field below. I look forward to hearing from you!

 

PS. If you want to dig into the details of what Circular Economy means for business, I recommend Ellen MacArthur Foundation’s guide (link: https://www.ellenmacarthurfoundation.org/assets/downloads/TCE_Ellen-MacArthur-Foundation-9-Dec-2015.pdf)