Environment

Sharing best practice

22/07/2014

The transition to a circular economy requires private and public sectors to work together, as well as international, national and local-level initiatives and policies. The Green Week session on ‘Circular economy: scaling up best practices worldwide’ was on the lookout for successes, examples and lessons from around the world.

Friends of Europe Trustee Monica Frassoni kicked off the discussion, asking: "How can best practice become mainstream, in order to change the world?"

"Technology alone is not delivering", said Michael Kuhndt, Director of the Collaborating Centre on Sustainable Consumption and Production (CSCP), "we need to address consumption itself." He recommended exploring lending and leasing models, although he warned that consumers can never be sustainable when surrounded by unsustainable infrastructure.

"We find that consumers of new technologies are also ready for new business models."

Social inclusiveness is vital, said Valdemar de Oliveira, Impact Business Director for Fundación Avina, making the case for price-points and uses that are accessible to the poor, as "new technology only reaches the poor decades after it has become obsolete".

"Technological progress is step by step," said Hongchun Zhou, Director of the Department of Social Development Research at the Development Research Centre of the State Council of China, who also emphasised the needs of poorer consumers.

Jean-Philippe Hermine, Vice President for Strategic Environmental Planning for Renault-Nissan Alliance, said that the company is developing a closed loop for plastics, copper and catalytic convertors. "Around 70 % of our R&D budget is dedicated to reducing consumption and emissions", he said, because "20 % of a car's price is now the cost of the raw materials."

"Today, there is a mismatch between demand and supply systems," said Jane Feehan, Natural Resources Specialist at the European Investment Bank (EIB). "Resource-use is out of step with what the planet can sustain."

Investors have a role in making the circular economy a reality, and the EIB has put social and environmental safeguards in place – such as excluding tropical logging to protect biodiversity. The bank also has a target to make 25 % of its loans to climate actions.

Taking a holistic view

"Consumers of new technologies are also ready for new business models," explained Hermine, noting how electric vehicle customers are interested in buying 'kilometres of mobility' and leasing rather than buying batteries. "We also need tax-deductible incentives, such as VAT reductions for reused products," he added.

"The circular economy is not just about waste," said Kuhndt. "Products are manufactured by many companies with different philosophies in the value chain. We need a holistic understanding."

De Oliveira agreed: "We need to design new business models based on understanding the value chain."

"The EIB has an increasingly transparent process for investment decisions," said Feehan. Investors need to make information on sustainability criteria available to the public.

Kuhndt noted how 50 % of products stay in our homes for only one year. "We can't wait for consumers to change. In a world where marketing often glamourises unsustainable behaviour, supply-side solutions are key, with 'smart, sustainable business models'," he said.

 

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