Under the collective experience of the covid-19 pandemic, the need to boost the resilience of our economies and labour markets to future shocks has never been more salient. But while talks about the need to 'build back better' have dominated public debate, concrete long-term actions are yet to materialise. By being clear about how and when the circular economy can or cannot contribute to resilience, circular economy strategies and policies that promote long-term social and environmental prosperity can be designed and implemented, latest research by Circle Economy finds.
The question is: How can we achieve a circular economy that strengthens resilience while avoiding unwanted side-effects?
In December 2020, we have invited circular economy and resilience enthusiasts to explore the answers to this question by drawing on real life examples.
The event was moderated by Esther Goodwin Brown, Lead of the Circular Jobs Initiative at Circle Economy, with opening words from Martijn Lopes Cardozo, CEO, at Circle Economy.
Below you find a summary of key insights as well as answers to questions asked by participants during the webinar.
The circular economy can boost resilience, but it's not a silver bullet, explains Natalia Papu during the webinar. Drawing on findings from Circle Economy's latest research on the links between the circular economy and resilience, she highlights three factors that can boost resilience but also cause trade-offs:
Opportunities: Decentralised activities are a growing trend in the circular economy because they support the efficient management of material flows locally. Decentralisation also contributes to resilience by bringing governance systems closer to their communities and providing local stakeholders with opportunities to actively engage in a more diverse range of activities.
Trade-offs that require management: Moving towards decentralised activities also warrants caution. For example, a shock in a specific activity that has a pivotal role in the physical or financial flows of the region, will have an impact on other activities or operations from sectors present locally as well. Hence, moving towards more varied and localised value chains and sectors does not necessarily reduce the vulnerability of them to shocks if they are intrinsically connected to other sectors in the region.
Opportunities: Resource efficiency is the use of less materials and energy to achieve the same output, including using as many secondary and renewable resources. This can help to boost resilience across supply chains because it means becoming less reliant on heavily globalised value chains and reduces the risk of stocks being affected by disturbances in other regions.
Trade-offs that require management: But at the same time, it may also reduce buffers and the level of additional stock that we might want to fall back on in times of need.
Opportunities: Skills transferability is put forward as a way of contributing to resilience by allowing workers to more easily adapt to different roles and tasks, and even open up the possibility of people to switch more easily between industries. Clearly working and utilising our skills in this way also requires a different way of teaching and learning and a level of resilience.
Papu concludes that "applying resilience thinking to efforts to shape the circular economy transition may help to ensure this new economic paradigm creates positive value for both society and planet." Possibilities to boost resilience by integrating resilience thinking and circular economy strategies exist across various levels—from communities and subnational regions (i.e through sound local management of common resources that are looped back into the production cycle) to businesses and individuals (i.e. when cascading strategies such as reuse, repair, remanufacture and recycling reduce and diversify resource use and create new opportunities for employment).
People around the world already work to integrate resilience thinking and circular economy strategies in their policies, businesses and communities. They hold the experiences and knowledge we need to tap into to boost the resilience of entire systems.
David Jacome-Polit, Chief Resilience Officer for Quito, is one of these practitioners. Decentralisation has become a cornerstone in his work and it is a key element of the Resilience Strategy for Quito. During the webinar, Jacome-Polit shares his experiences with working at the intersection of different organisational levels and with implementing strategies.
He recommends other policymakers to
My Sellberg, Researcher at the Stockholm Resilience Centre, recently ran a training programme for municipal stakeholders in Sweden to promote transferable skills.
In her experience, resilience can strengthen circular economy policies at the regional or city level but practitioners need to take the following into consideration:
She recommends the following actions:
Our resilience report showcases Pratibha Syntex, a vertically-integrated manufacturer of cotton textile knitted products in India. Pratibha Syntex offers an interesting example of how a company can combine resource efficiency and diversity for greater resilience.
Pratibha Syntex opts for water and energy efficiency in manufacturing facilities:
The company's (regenerative) agricultural practices are characterised by diversity:
How could labor mobility and skills transferability be encouraged in circular companies to build more resilience ?
Top management needs to align with this goal and proactively offer opportunities for the workforce to participate in training courses beyond their main responsibilities and tasks. Companies can also adopt a cross-cutting approach and incentivise a project ownership strategy that allows employees to appropriate certain cross-cutting projects. This can help to empower employees and increase their confidence to acquire more skills.
What governance systems work well for innovation enterprises/start-ups in the circular economy field?
Policymakers need to build and support skills capacity for local businesses that attempt to enter the sustainable development arena. The Stockholm Municipal Government is a good example because it supports local businesses that want to participate in the region's food sector.
David, how does Quito mitigate risks that circular strategies present with regards to potential job losses (in extraction and primary processing industries) and hyper flexible contracts?
Quito's resilience program is part of a much larger policy that aims to improve access to the labour market by identifying the productive sectors capable of offering opportunities for women and by improving human resource capacities. We also coordinate our work with the Labour Ministry, because we do not have all the competencies needed.
Do you have any examples of polycentric governance?
The R-Urban is a bottom-up strategy that explores the possibilities of enhancing urban resilience by introducing a network of resident-run facilities (civic-hubs hosting economic and cultural activities).
The Food Council brings together agriculture groups, unions and associations, knowledge institutions, traders and academics to oversee, align and support the local food policy 'Gent en Garde' in Ghent, Belgium.
How can SMEs or startups adopt a circular model in their early stages, particularly given the financial restrictions they might experience around ensuring diversity or technical innovation?
Many emerging startups and SMEs specialise in circular business models, such as Excess Materials Exchange, Worn Again, The Renewal Workshop, Kenoteq and Cuantec. However, there are multiple barriers that small scale businesses face in terms of fully adopting the circular economy such as financial ones. To help address this in European Member States, the European Commission between 2017 and 2019 has implemented a pilot project to support SMEs in adopting circular practices. Nevertheless, there is still a larger need for SME support and access to enable these enterprises to compete fairly in the market with larger players.
How can innovation boost resilience in manufacturing companies that are based on the Circular Economy?
Innovation may boost resilience in companies as it contributes to fostering complexity, agility and adaptability, as well as contributing to encourage learning within the company. For example, within the report we refer to the case of Pratibha Syntex, an Indian textile manufacturer, that through continuous learning and R&D opportunities enhances the possibilities of manufacturing workers to acquire new skills, while fostering a flexible and growth mindset. This in turn increases the resilience of the company against changes and adaptation. You can read the full case study in the report here.
What indicators are there for circularity?
Circle Economy has developed the Circularity Gap Metric, which combines a circularity index (degree of circularity of an economy) and its inverse – the gap – which measures the share of non-circular inputs to an economy. More information on the Circularity Gap Metric is available here. The Circular Jobs Metric calculates the number of jobs generated by the circular economy to facilitate insights into the relationship between the circular economy and the labour market and support the design of evidence-based circular strategies. More information on the Circular Jobs Metric can be found here.
What examples are there of localised/decentralised energy initiatives?
There are multiple examples of decentralised renewable energy generation and peer-to-peer grids.