Dear systems thinkers: Support a circular economy
Dear systems thinkers,
Rather than solely using a bottom line (even a triple bottom line) and largely linear approach to growth and development, we must imagine, analyze and quantify how circular growth augments our conventional business models.
When thinking of the intent of the United Nations Sustainable Development Goal (SDG) 12: Ensure sustainable consumption and production patterns, we must understand that our current patterns are entrenched in systems of positive feedback loops. Rising demand for energy, water, food and other resources drives further consumption, placing ever greater demands on production. This motif of growth cannot self-regulate, exacerbating threats to environmental degradation and social conflict.
These current systems of consumption and production, more interconnected and complex than ever, never will become "sustainable" when we are so far removed from the equilibrium of natural resource consumption and waste production. Thus, the systems are broken.
But as they stand, the targets of SDG 12 do not adequately address the ideas of production and consumption. The two notions have different underlying drivers, and addressing them simultaneously yet individually would provide more precise solutions for producers and consumers.
Engaging a mass movement of consumers to modify their consumption behavior is a slow and arduous process that must account for political and sociocultural differences. On the other hand, many producers already have begun imagining models beyond "business as usual" and catalyzing the transition to a circular economy. In a circular economy, decoupling growth from resource consumption creates competitive advantage — or, as one might put it, circular advantage.
Now is the time to recognize the synergies between the private sector and the framework of Goal 12. We need a new, circular system that embraces the positive feedback loops of consumer-driven patterns but decouples the growth from continually increasing resource and material consumption. This innovation is emanating from all parts of the value chain that create new value propositions.
ING is rethinking finance in the circular economy (in addition to integrating concepts into its own business). Identifying opportunities for industrial symbiosis has diversified British Sugar’s product offerings while strengthening its business-to-business (B-2-B) relationships, at profit. FLOOW2 brings the sharing economy to a B-2-B sharing marketplace for overcapacity of equipment, skills and knowledge of personnel. And the Circular Economy 100 Group, coordinated by the Ellen MacArthur Foundation, is working to advance this movement across multiple sectors. The business case for the circular economy has been articulated, but the private sector will not realize this added value until it aligns its strategy with Goal 12 in tandem with other SDGs.
To ensure that the circular economy becomes a fully inclusive model of development, we must make it accessible and implementable for all. This means actively creating pathways to success for small-to-medium entities and emerging economies via expertise and funding. Tearfund and the Institute of Development Studies outline the potential of the unparalleled opportunity of the circular economy to create jobs and save lives in low- and middle-income countries.
The circular economy is a system of great potential for economic, social and environmental progress in inclusive and equitable models of strategy and development. But to start on the path to success, we need brave first movers to understand how circular economy expands the core business model — and take actions at decisive points in the system where their impact will be maximized.
We then must create more access points to scale the supporting disruptive technologies, such as 3D printing and customer-to-customer market segments. These segments need to develop the capabilities of business strategy, innovation, sourcing, sales, marketing and reverse logistics. We must be careful not to increase the gap between developing and developed infrastructures — and we must not merely improve the current "take, make, waste" system of production and consumption, but reimagine, nurture and legitimize a new model for all.