The Circular Economy Is Coming

Three panelists at Product Stewardship 2017 shared diverse perspectives on the circular economy – its challenges and opportunities for industry.

Ingvild Sorenson, senior manager at the United Nations Global Compact, started by listing problems the world faces. “When we talk about creating the world we want, there are a lot of challenges,” she said, including climate change, widespread pollution, rising inequality, mass migration, gender discrimination, water scarcity, and so on. In response, the UN has generated a set of sustainable development goals, such as zero hunger, no poverty, quality education, gender equality, and clean water and sanitation.

“We know where need to go, so then how do we get there,” asked Sorenson. The UN is calling for principle-based leadership from industry, in which companies take a holistic look at the positive and negative impacts that they have as a business. “To me, the circular economy is where we have the opportunity to really think big,” she said.

When the UN thinks about circular economy, it promotes new ways of thinking about materials, supply chains and so on. The emphasis is on breakthrough rather than incremental change. “This means it’s not always the easy solution,” she noted.

Patrice Szczygiel, REACH Manager and Europe Product Stewardship & Regulatory Affairs Manager, agreed that the circular economy approach requires a change in mindset. “Circular economy is not all about recycling. Recycling is one part of it,” he noted.

One of the issues is that there will be 3 billion more middle-class consumers by 2030, creating unprecedented rise in demand for finite resources. Countries driven to adopt circular economy models want to reduce independency on natural resources, create local jobs for social integration and cohesion, and reduce CO2 emissions.

Szczygiel predicts that there won’t be a single circular economy regulation but instead regulations of many steps. What companies have to do is think seriously about challenges and opportunities created by these drivers. Among the opportunities, he said, will be new demand for products with lower raw-material costs and lower energy costs. Taking leadership in this area also has “a tremendous potential to improve the chemical industry image,” he added.

He cited liquid lubricants as an example of an opportunity, from the perspective of an upstream chemical supplier. Liquids can be refined, but there’s a logistical challenge to collection. “We can recycle them, piece of cake,” he said. “The task is to bring them all to the same place.”

Richard Northcote, chief sustainability officer at Covestro, also focused on the opportunities presented by circular economy models. His company produces polyurethane and polycarbonate, both of which contribute to energy efficiency, he said, by making products lightweight.

But rather than focus on sustainability in products only, he helps the company incorporate sustainability in everything, as a way to grow the business and increase its effect on the rest of world. To that end, Covestro has adopted several targets for 2025, including reduce CO2 emissions by 50 percent; aligning R&D activities with the UN Sustainable Development Goals, and aligning its entire supply chain the company’s sustainability strategy.

The company also strives to reach 10 million people in underserved markets with technology that will allow them to grow economically their way out of poverty. It’s not just about doing good, said Northcote. It’s about also about extending the market and creating new opportunities.