5 guiding principles for an inclusive circular economy

June 2, 2017

An inclusive circular economy focuses on creating positive social externalities at every step of the way. This means making social impact the driving force rather than the afterthought.

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Our new CEO, Harald Friedl, and senior lecturer on the circular economy, Alexandre Lemille, joined us on Twitter for our monthly edition of #circlechat last Wednesday to share their vision for an inclusive circular economy and take questions from other participants. We compiled the main insights from our conversation here.

 
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The argument for the circular economy has traditionally been an economic argument first and foremost: resource scarcity threatens a healthy bottom line, so reuse, remanufacturing, and refurbishment strategies provide a sound solution for mitigating our reliance on fraying natural capital. Because the circular economy can hardly be divorced from the benefits it brings our planet, the environmental argument for it has also steadily grown stronger as a result.
 

We believe it is high time the concept also evolves to put people on an equal footing with profit and planet.

 
We explored this idea during our latest Twitter chat — Circle Economy’s monthly initiative to bring the circular economy community together online. Here are 5 guiding principles that came out of our conversation:
 

1. Designing for positive social externalities at every level is key.

 
Whereas economic agents have been encouraged to limit or internalise negative externalities in the past, an inclusive circular economy focuses on creating positive social externalities at every step of the way. This means making social impact the driving force rather than the afterthought.

 
For example: governments can establish laws that support and enable social inclusion; businesses can involve and empower informal workers; industry leaders can ensure smaller players are accounted for across sectors; product developers can design for all abilities; consumers can signal a demand for fairer products; and entrepreneurs can adopt work-integration business models… The list goes on.


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2. Poverty is an important item on the inclusiveness agenda.

 
Poverty, just like waste, is a human construct that needs to be designed out. Ensuring everyone’s physiological and safety needs are met is an important first step in the way of empowerment, as poverty and inequality often feed into each other. It is also an important step in bringing the circular economy discourse closer to emerging countries, where inequality gaps are often extreme and environmental incentives not necessarily appropriate.

 
A universal basic income, for example, could not only help eliminate poverty, but it could also offset the job losses involved in work automation. Finland, ever the social innovator, is already experimenting with the idea.
 

3. But it’s not the only one.

 
In order for the circular economy to be truly inclusive, it needs to — at least aim to — address all of the SDGs. Alexandre Lemille’s work on circular human flows puts humans at the heart of the circular economy’s biological and technical spheres, where people profit just as much from gaining access to vital resources as they do from nurturing their skills, knowledge, and education.

 

4. Growth doesn’t have to be the enemy if it is properly designed.

 
There is definitely room for economic growth in an inclusive, circular economy, as it allows for the creation of additional jobs, but we do also need to shift perspectives, redefine the notion of growth, and develop new ways to assess it.

 
GDP, for example, has always been a poor reflection of a country’s prosperity; employment, similarly, fails to capture the larger picture; and while indicators like Bhutan’s Gross National Happiness are a step in the right direction, we still need tools to effectively measure and benchmark the circular economy in its multidimensionality.

Few are currently available, but we’re working on it.
 

5. Technology as a force for good.

 
Technology in and of itself is not deterministic, and so it is up to us to put it to good use. Just as the circular economy draws on science to mimic natural systems in order to restore balance to both our industries and our planet, so too can it use technology to cast the inclusion net wide.

 
Blockchain technology, for example, could be key in enabling inclusiveness as it provides increased transparency, decentralises power, and is already being used in ensuring fair supply chains.

 


 

We need to design for all three dimensions from the onset. The circular economy is a systemic, long-term, and tangible approach to both doing business and doing good. The economic benefits it brings with it make it an appealing and sound concept to rally those in power around it, and it is environmentally beneficial by definition. Let’s make it socially inclusive by design.

It’s not too much to tackle at once if we all collaborate.

Look back on the full conversation here:

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