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Case Study: The End of Packaging Trash in Fashion?
Case Study: The End of Packaging Trash in Fashion?Case Study: The End of Packaging Trash in Fashion?Read more
Case Study: The End of Packaging Trash in Fashion?Case Study: The End of Packaging Trash in Fashion?
September 18, 2018
Case Study: The End of Packaging Trash in Fashion?

It’s no secret that the apparel industry has a problem with plastic waste. The challenge of maintaining quality across various aspects of the textile value chain has meant that historically, disposable plastic packaging has remained a necessary evil.  A 2014 internal case study reviewing Patagonia’s use of polybags found they were, “critical to ensuring that garments stay clean from the finished goods factory through to the distribution centre.” Eliminating these bags would result in significant financial and environmental costs through the damage done by exposing garments to dirt and moisture.While Patagonia tested various alternatives, such as paper mailers, none were able to offer the same level of protection that polybags could. Until recently, solutions had centred on reducing the size and amount of disposable plastic used in the delivery of clothes. Now though, with the growing availability of reusable packaging systems to a mass market of retailers, plastic waste is becoming an unnecessary, potentially absent, part of the delivery process.One of the leading systems available to retailers in Northern Europe is RePack, whose sleek yellow pouches can be used up to 20 times, coming in a range of sizes to fit the garment being delivered. Consumers can return them hassle-free using the postal return sticker included in the original package.

RePack

“My name is RePack. Thanks for checking me out! The special thing about me is that I am a 100 % reusable package. Not to brag, but I can easily be used at least 20 times.”

For this study we spoke to brands utilizing RePack for e-commerce sales, as well as end users, to find out how a reusable packaging system changes the retailer-consumer relationship. Aligning with many organisations’ circular strategy, reusable packaging allows them to engage with consumers  in the most circular way possible. Mud Jeans listed this as a key advantage, having a delivery system in keeping with the wider values of an environmentally conscious brand. With many retailers signing up to sustainable goals recently, such as the GFA’s 2020 commitments, the practical difficulties of fulfilling those pledges are becoming increasingly evident. While the desire from brands to improve their systems is clear, the ‘how’ of implementing change has often been lacking. Systems like RePack are one piece of the puzzle that will allow brands to fulfil their sustainability KPIs.Currently working with Makia and Pure Waste, brands that cater specifically to a sustainably savvy consumer, RePack is offered as the only delivery option. This allows both brands to achieve their waste reduction goals, and interact with their consumers in a new way. For those consumers, engaging with circularity comes in a very practical way. After opening the package, they're instructed how to fold the Repack back up and use the sticker provided to send the bright envelope back on its way. When asked if RePack improved the online shopping experience (on a scale of 1-5), respondents gave an average response of 4.6 to the RePack research team.

What do you get

RePack also positively incentivises both brands' consumers to return the packaging by offering a reward or voucher to be claimed at partner stores also using RePack. The voucher entices consumers to tryout other brands within the RePack community, creating a collective of loyal customers around brands that use the system. RePack’s own data suggests that up to 60% of the vouchers are claimed, with each RePack delivery creating future return customers, indicating clear opportunity for growth.This incentivisation scheme has been used differently with individual brands, where the brand itself encourages the use of RePack by allowing consumers to opt for the environmentally friendly packaging option. Circle economy’s own end consumer research suggests a prevailing preference for multiple use packaging already exists. One happy customer told us, “If I had any influence on the shipping methods of companies I would have them all use Repack.” (End user research)While RePack's relevance in reusable packaging for e-commerce is an apparent case, what makes the system unique to circularity is its ability to engage consumers directly in a take-back scheme. Brands are able to offer an end of life service for their products, while integrating circular strategies and educating the consumer at the same time. This kind of grassroots circularity has the power to inspire a wide consumer base to turn their own used clothes into another’s treasure.The recent product take back and material upcycling partnership with Finlayson accomplished this. In February 2017, Repack helped collect 11 tonnes of worn denim from Finlayson's customers which was then upcycled into towels and sold again in their retail stores and online. Before RePack, take back campaigns tended to remain exclusive to the offline environment, limiting participation to geographical or other constraints. At the time of writing Finlayson and RePack have run three take back campaigns for different textiles in the online environment and more consumers have been opting to have their products shipped in RePack with every campaign.

Woman with child unpacking

It’s clear that reusable packaging systems have the potential to remove a key obstacle in the movement towards a circular clothing industry, that of plastic packaging waste. The development of reusable delivery systems thus accelerates that movement by providing brands with a practical solution to the challenges of meeting sustainability targets. Systems like RePack allow participation in these developments by both brands and consumers. As the community continues to grow, RePack has the potential to expand consumer loyalty amongst brands. A unified movement of brands and consumer towards the circular economy? Sounds like a plan. Find out more here.

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Financing for circular construction: towards collaborative value creation
Financing for circular construction: towards collaborative value creationFinancing for circular construction: towards collaborative value creationRead more
Financing for circular construction: towards collaborative value creationFinancing for circular construction: towards collaborative value creation
July 26, 2018
Financing for circular construction: towards collaborative value creation

AMSTERDAM, 26 July 2018 – Experts bundle their knowledge to tackle challenges in the construction sector to finance circular construction. The Community of Practice 'Financing Circular Construction’ will provide a practical roadmap to design and create a viable and financeable circular residential housing project in Amsterdam.A circular building is designed in a way that it can be entirely disassembled and individual components can be readily repaired, reused or repurposed. In the construction and use phase, resources are optimally used and the use of raw or toxic materials is minimised.

Conference

Community of Practice (CoP)The working group format Community of Practice (CoP) is an initiative of NederlandCirculair! and emphasises the importance of a collaborative approach, connecting relevant industry stakeholders. The Circular Construction CoP follows the 2017 Circular Phone CoP, where accountants, legal and financial experts created several practical, open-source tools that support entrepreneurs in their ambition to realise service-based business models.

After the successful Circular Phone CoP last year, we are happy to have, once again, gathered such an impressive group of experts that will help overcome legal, financial and valuation barriers for the construction industry. We are very optimistic that we will be able to create practical tools that accelerate a circular built environment.-  Fieke de Haan, Lead Finance Program Circle Economy

Focus on construction sector; participation Eigen HaardCircle Economy's Circularity Gap Report states that the built environment is the largest consumer of raw materials, using 42.4 billion tonnes annually. This is 40% of our total annual resource use. Social Housing corporation Eigen Haard is aware of the impact of the built environment on the environment. Circularity in constructing and maintenance is one of its long-term goals.  

At Eigen Haard we have recently defined our circular ambitions. This CoP offers an ideal opportunity to source and apply expert knowledge to one of our residential housing projects and accelerate our circular ambitions.-  Jeffrey Hirs, Projectcontroller Eigen Haard

A new model for the construction sectorThe CoP aims to develop new, circular business models that accelerate the transition to a circular construction sector. To do so, the sector has to evaluate aspects like design, material choice, and possibilities of maintenance and reuse. Circular strategies force the industry stakeholders to redesign the way they work together, change cash flows and risk evaluation mechanisms. Questions that will be tackled during the CoP focus on harvesting, circular design, new perspectives on ownership, legal constructions and the valuation and financing of buildings. The outcomes and practical tools following the project will be published in an open source whitepaper.The 'Financing Circular Construction’ CoP takes place from June until October 2018, is co-funded by NederlandCirculair! and brings together ING, Allen & Overy, Eigen Haard, The Royal Netherlands Institute of Chartered Accountants, Alfa Accountants and Advisors, RICS, Madaster, Arcadis, Arup, Sustainable Finance Lab, DOOR Architecten and Circle Economy.

For more information about the CoP Financing Circular Construction, contact us:

Aglaia Fischer: aglaia@circle-economy.com

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Linear Risks webinar recording now available
Linear Risks webinar recording now availableLinear Risks webinar recording now availableRead more
Linear Risks webinar recording now availableLinear Risks webinar recording now available
July 25, 2018
Linear Risks webinar recording now available

Webinar centres around urgency for businesses and investors to take 'Linear Risks' seriousWelcoming an international audience Circle Economy was happy to co-host the 'Linear Risks' webinar together with PGGM, KPMG, the European Bank for Reconstruction and Development, and the World Business Council for Sustainable Development after launching the 'Linear Risks' Essay in June 2018. Over 120 participants from various corporations, SMEs, governmental organisations, NGOs, and advisory firms attended the webinar to learn more about ‘Linear Risks’ from the perspectives of Circle Economy as a circular economy expert, WBCSD as a global business network, PGGM and EBRD as financial institutions, and KPMG as an advisory firm.Key discussions from the webinar centered around the urgency for businesses and investors to take ‘Linear Risks’ into account in their decision making, particularly as companies and government agencies are increasingly coming to realise the impacts of ‘Linear Risks’. Questions from the audience highlighted the need to start developing more concrete metrics, models, and disclosure guidelines for ‘Linear Risks’, as well as start to adapt and improve existing risk management models and ESG frameworks to incorporate ‘Linear Risks’.As the 'Linear Risks' essay demonstrates, linear economic business practices are creating real business threats, including risks associated with the use of scarce and non-renewable resources; prioritisation and sales of products produced with virgin resources; the failure to collaborate; and failing to innovate or adapt. These are all factors that will negatively impact the ability of organisations to continue business as usual and prevent us from closing the circularity gap.With the ‘Linear Risks’ webinar, we started taking the first steps to raise awareness and engage in a constructive dialogue with the financial and business community to better understand and model ‘Linear Risks’. We were very happy to see so much interest, engagement, and feedback from the community, and we look forward to continuing our efforts to ensure that ‘Linear Risks’ become an integral part of financial and business decision-making.

[cta link="https://www.youtube.com/watch?v=tWuXl1Y36M4"]Watch the Webinar[/cta]

"LINEAR RISKS" Webinar
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Circular Economy "in Vogue" at Helsinki Fashion Week
Circular Economy "in Vogue" at Helsinki Fashion WeekCircular Economy "in Vogue" at Helsinki Fashion WeekRead more
Circular Economy "in Vogue" at Helsinki Fashion WeekCircular Economy "in Vogue" at Helsinki Fashion Week
July 16, 2018
Circular Economy "in Vogue" at Helsinki Fashion Week

As part of Circle Economy's ambition to place circularity on an international stage and bring the topic to a wider audience, we are proud to announce our official partnership with Helsinki Fashion Week. Helsinki Fashion Week is the world’s first Fashion Week aiming to be 100% sustainable and is taking a ground-breaking stance by putting the circular economy front and center. Circle Economy is thrilled to become an official knowledge and content partner to this progressive platform. Circle Economy will support Helsinki Fashion Week in presenting the topic of circularity to a wider fashion audience.   This year’s event, that takes place from the 20-25th July, rests on the twin pillars of the circular economy and sustainability. 30 brands, who are all integrating environmental and social sustainability at their core with garments crafted from recycled materials or natural and reusable fabrics, will be brought together in a celebration of all things circular. Pick of the bunch is The New Normal project, a closed loop fashion collection produced in collaboration with WFF and the Infinited  Fibre Company. Since an estimated 80% of a product’s environmental and economic impact is determined at the design stage, empowering designers to make the right decisions, and rewarding those who are already are, will undoubtedly accelerate the industry's transition to a sustainable and circular economy.

We are thrilled to be able to support Helsinki Fashion Week in becoming circular and applaud the bold stance they've taken. It's time that the concept of the circular economy reached the wider fashion community and partnerships like ours are critically needed in order to bring this urgent topic from books to the runway. Circular fashion needs to be the new normal. - Jade Wilting, Head of Partnerships Textiles Programme, Circle Economy

This year’s runway spectacle will be supported by The EcoVillage infrastructure, utilizing green technologies and renewable energy sources to provide for a  ‘zero waste’ event. By showcasing the latest developments and innovation in technology, electronic transportation, mobility and robotics, the village will offer unique experiences by questioning the nature of being, existence, and reality in the evolving world and the fashion industry. Circle Economy is thrilled to see these innovations implemented in practice.

"It is most vital to work and collaborate across industries. It's the ultimate key to realise a circular economy in all sectors and aspects of human life. Circle Economy is a great partner whose knowledge and expertise spans many different sectors and industries and has the ability. Together, I believe we have the power to  inspire people to see the benefits and adopt a circular lifestyle."- Evelyn Mora, Founder Helsinki Fashion Week

Helsinki Fashion Week are clearly focused on and dedicated to creating a more circular and sustainable fashion industry through cross-industry partnerships. If you want to hear more about their commitment to the cause, their Advantage podcast series offers insightful discussions on the challenges and rewards of implementing circularity within the industry and everyday life.

Learn more about our work within textiles here: [cta link="https://www.circle-economy.com/textiles/"]Circle Textiles[/cta]

About Helsinki Fashion WeekHelsinki Fashion Week 2018 showcases sustainable fashion designers to international buyers, press, and other professionals in the fashion industry. The event offers new experiences and information to visitors through the EcoVillage platform which is built based on circular and sharing economies. The event aims to inspire sustainable urban development and cross-industry solutions to current and future environmental challenges in the fashion business.About Nordic Fashion Week AssociationNordic Fashion Week Ry (NFW) is an internationally recognised, not-for-profit nongovernmental fashion organisation, working to advance the Nordic and international export of sustainable fashion and business. NFW collaborates and consults several organisations, enterprises, research institutes and other industry events on the themes of circular economy and sustainability. NFW's yearly main project Helsinki Fashion Week (HFW), is held during July 20–25th. The event supports Finnish and international designers by offering them a sustainable and free-of-charge platform, to showcase their creations for the international fashion buyers and press.

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Prague’s Circular Journey Begins With City Scan Announcement
Prague’s Circular Journey Begins With City Scan AnnouncementPrague’s Circular Journey Begins With City Scan AnnouncementRead more
Prague’s Circular Journey Begins With City Scan AnnouncementPrague’s Circular Journey Begins With City Scan Announcement
July 12, 2018
Prague’s Circular Journey Begins With City Scan Announcement

As the recognition of the circular economy continues to grow internationally, so too does Circle Economy's reach; this time into the Czech Republic. Here, Circle Economy will lead city changemakers within Prague through a multi-phase process, from orientation to implementation aimed at creating a practical roadmap for the transition towards a circular city. The innovative methodology has been applied to cities and regions throughout Europe, including Amsterdam, Glasgow and Bilbao-Bizkaia. This new additionally follows the announcement of Circle Economy expanding to China.In late June 2018, Circle Economy and INCIEN officially kicked off Prague’s Circle City Scan with a collaborative workshop marking the beginning of the city’s journey towards a circular economy. The project focuses on the creation of an inclusive circular vision for the Czech capital and supports the co-development of tangible circular strategies, weaving circularity into the fabric of the city. Launching the project in the same spirit in which it will continue, the kick-off brought together stakeholders from a broad array of sectors, including local government, waste management, innovation and urban development. Hosted at the United Nations Information Centre, the collaborative workshop aimed to collectively determine how the circular economy can synergise with the character of the city. Similarly, the project will be conducted in partnership with INCIEN; a Czech, non-profit organization that focuses on innovative environmental management and on projects that share a common goal; to transition from a linear to a circular system.

"We are really excited about the collaboration with Circle Economy. With this partnership, we can combine unique circular knowhow, and experience, within a local context and network in order to develop scalable solutions with a positive impact on the local economy and the environment. We hope Prague is just the beginning and other cities in Czech and Slovakia will soon follow. " - Vojtěch Vosecký, Co-founder, Operations Manager, INCIEN

Importantly, no two cities are identical. Therefore, the workshop provided an important first step to rooting local knowledge and ambitions for the city within the core of the project. This approach allows the identification of key areas in the city with the greatest transformative potential.

“Prague’s rich history and dynamic recent growth present a compelling opportunity to embed circularity into the city’s future development. Combined with its strategic location within Europe, Prague can act as a circular beacon, helping to accelerate the broader growth of the circular economy over the continent. The knowledge and commitment of INCIEN are invaluable and we are excited to work together to develop Prague’s circular vision. ” - Ilektra Kouloumpi, Senior Project Manager, Circle Cities Programme
Circle Cities Programme

Building on the momentum of the kick-off workshop in Prague, this project will move on to further scope the inner material workings of the city, analysing its resource flows and pinpointing the sectors within the city that hold the greatest potential for impact in the circular transition. The third and final phase identifies tangible pilot projects to be implemented within the city which serve as a starting point for the transition towards a circular economy. An Action Agenda is created to provide an overview of the immediate actions that the municipality and its stakeholders must take, both in the short and the long term.

“The creation of a circular vision for the City of Prague will provide a foundation for the realisation of new and purposeful collaborations between government, businesses and citizens to implement circular strategies. A city that works for all of its citizens cannot be realised in isolation. We, therefore, call upon Prague’s citizens, businesses and city officials to join us in this collective journey towards the creation of an inclusive and circular Prague.”- Annerieke Douma, Director Program and Business Development, Circle Economy
INSTITUT CIRKULÁRNÍ EKONOMIKY
CIRCLE ECONOMY

Learn more about our work with cities here:

[cta link="https://www.circle-economy.com/tool/cities/#.W0MbNtgzZE4"]Circle Cities[/cta]

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Circle Economy and ICLEI embrace a global approach to create circular cities locally
Circle Economy and ICLEI embrace a global approach to create circular cities locallyCircle Economy and ICLEI embrace a global approach to create circular cities locallyRead more
Circle Economy and ICLEI embrace a global approach to create circular cities locallyCircle Economy and ICLEI embrace a global approach to create circular cities locally
July 8, 2018
Circle Economy and ICLEI embrace a global approach to create circular cities locally

On July 8, at the Eco Forum Global Annual Conference in Guiyang, China, Circle Economy and ICLEI-Local Governments for Sustainability officially launch their partnership to accelerate the global transition to a circular economy through cities. In addition, the announcement also kicks off collaboration with ICLEI East Asia on developing the first regional partnership towards the practical implementation of the circular economy within East Asian and European cities.

MOU

The announcement marks the beginning of a multi-year collaboration between Circle Economy - an impact organisation committed to delivering practical and scalable solutions to transition towards a circular economy - and ICLEI, a leading global network of 1,500+ cities, representing 25% of the global urban population and committed to building a sustainable future. The partnership will leverage the expertise, experience and ambition of both organisations, with the objective to support local governments in decoupling urban economic development from resource consumption and environmental degradation.

We all overuse our resources. “Overshot day,” the day we’ve spent more resources than we can renewably supply, arrives on the 10th of August this year. Every day after that is a day we live from the earth’s substance itself.Thus, we all have to change the way we purchase, consume, and manage our resources and waste. This is the responsibility of individuals, citizens, inhabitants, businesses, and governments, and this change must be focused through local governments.As ICLEI we are committed to supporting our Members and all other committed cities to develop and implement strategies towards sustainable procurement, avoiding waste, and creating synergies in which the output of the one becomes the input of the other - in brief, creating the "cyclical economy".ICLEI Deputy Secretary General Monika Zimmerman

Cities are now responsible for 70% of resources that are consumed globally and 70% of global greenhouse gas emissions. Acknowledging the huge environmental footprint of cities, both organisations recognise the crucial role of the circular economy to help close the global resource Circularity Gap, as well as create liveable and future-proof cities that also provide employment opportunities for every citizen. During the ICLEI World Congress in Montreal in June 2018, ICLEI reaffirmed its commitment towards the circular transition in cities, underlining Circular Development as a fundamental transition pathway within ICLEI’s Strategic Vision 2018-2024. Embodied in this partnership is the commitment to deep collaboration through the sharing of knowledge, resources, good practices and expertise to drive the co-development of urban circular economy initiatives. With this agreement, Circle Economy also becomes an official partner of ICLEI’s Urban Transition Alliance, which empowers cities with industrial legacies across the world to become leaders of sustainable urban development. Taken together, this partnership creates a global approach in the creation of the circular cities of the future and presents a key step in the pathway towards circular urban developmentContinued work surrounding circular cities is continuing to demonstrate the many tangible benefits a circular economy can bring to cities. Not only can circularity make huge contributions in the reductions of greenhouse gases to achieve the Paris Climate Agreement as 67% of these emissions are related to material management, but within the socio-economic sphere, circular strategies can also generate net increases in employment throughout a city to support the creation of a competitive and future-proof workforce.

Harnessing the power of cities is vital towards a sustainable future that can thrive within the boundaries of our planet for all its citizens. This partnership between Circle Economy and ICLEI enables an actionable approach to accelerate the transition towards a circular economy in cities. The impact for cities is clear: improvements to net employment and social cohesion as well as reductions in carbon dioxide emissions - in short, answers to the big challenges cities face today” Annerieke Douma, Director Programme Development, Circle Economy

Recent decades have witnessed dramatic urban growth, particularly in East Asian cities. To support this growth in a sustainable way, these cities should strive towards circular economies that are productive and human-centered instead of extractive driven. Cities alone have the potential to reduce China’s CO2 emissions by 30%, which is a practical and realistic answer to environmental degradation and will provide solutions for job creation. Today’s announcement also marks the beginning of a close collaboration between Circle Economy and ICLEI East Asia with the goal to facilitate the practical implementation and measurement of circular economy strategies within the member cities of ICLEI East Asia. These innovative methodologies, developed by Circle Economy, have been applied in cities throughout Europe, and ICLEI East Asia will utilize their local expertise, and that of their member cities, to jointly apply these practices into regional action and create feedback loops to further improve the approaches.

Read more about our cities work:  

[cta link="https://www.circle-economy.com/tool/cities/#.W0MbNtgzZE4"]Circle Cities[/cta]For questions and press inquiries please contact: Circle Economy: melanie@circle-economy.com

CIRCLE ECONOMY

ICLEI: dana.vigran@iclei.org

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‘Linear Risks’: How Business As Usual Is A Threat To Companies And Investors
‘Linear Risks’: How Business As Usual Is A Threat To Companies And Investors‘Linear Risks’: How Business As Usual Is A Threat To Companies And InvestorsRead more
‘Linear Risks’: How Business As Usual Is A Threat To Companies And Investors‘Linear Risks’: How Business As Usual Is A Threat To Companies And Investors
June 28, 2018
‘Linear Risks’: How Business As Usual Is A Threat To Companies And Investors

Circle Economy, PGGM, KPMG, WBCSD, and EBRD have joined forces to co-author the 'Linear Risks' essay which demonstrates the real business threats linear economic business practices are creating, including risks associated with the use of scarce and non-renewable resources; prioritization and sales of products produced with virgin resources; the failure to collaborate; and failing to innovate or adapt. These are all factors that will negatively impact the ability of organizations to continue business as usual.

More and more companies are confronted with ‘Linear Risks’ like price volatility, supply chain failures as well as fines or lawsuits due to changing legislation. This linear approach does not only cause serious business threats, it also hinders our ability to achieve the Sustainable Development Goals, the Paris Agreement, or close the global circularity gap of 91%. As these risks are grounded in the linear setup of our economy, there is an urgent need to start a dialogue with the financial and business community on the potential implications with a view to exploring solutions.

This essay, co-authored by Circle Economy, PGGM, KPMG, WBCSD, and EBRD, aims to raise awareness and create a constructive dialogue with the financial and business community to better understand and model ‘Linear Risks’ - the exposure to the effects of linear business practices which will negatively impact an organisation’s ability to continue as a going concern. Businesses face these risks if they utilize scarce and non-renewable resources, prioritize sales of new products, fail to collaborate, and fail to innovate or adapt. If unresolved, these could have serious effects on the financial industry and our global economy.

The circular economy can provide a solution to mitigate these ‘Linear Risks’. The circular economy is an emerging economic concept that provides new business models and strategies to continuously reuse materials and resources to their fullest potential and is aimed at achieving social well-being while operating within the boundaries of our planet. We call upon all relevant stakeholders to effectively address ‘Linear Risks’. We suggest four distinct follow-up measures:

  1. Collaborate to deepen the understanding of ‘Linear Risks’ by building on this essay with risk managers and translate ‘Linear Risks’ into financial risk management language
  2. Understand the short-term and long-term implications of these 'Linear Risks' and how they influence the business and financial community across various time scales
  3. Create forums with investors and business stakeholders to test the concept of ‘Linear Risks’ and work towards a practical implementation agenda to integrate ‘Linear Risks’ into established enterprise risk management (ERM) processes
  4. Specifically address the disclosure challenges of ‘Linear Risks’ and explore how the current movement for disclosure of climate change risks in portfolios can serve as a model to incorporate ‘Linear Risks’.

Building on this essay, we intend to spark further research to develop specific ‘Linear Risks’ metrics and tools that make it easier for investors to account for them in their analysis. And eventually, we hope that ‘Linear Risks’ will become an integral part of decision-making in the financial and business community.

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Blockchain and the Circular Economy: An Exploration
Blockchain and the Circular Economy: An ExplorationBlockchain and the Circular Economy: An ExplorationRead more
Blockchain and the Circular Economy: An ExplorationBlockchain and the Circular Economy: An Exploration
June 26, 2018
Blockchain and the Circular Economy: An Exploration

“The best thing since the Internet” or a solution looking for its problem? Could it be both?

Blockchain is often touted as the key to improving trust and transparency across industries and moving towards more equitable and collaborative systems. But could it also be the key to a circular economy?To explore the potential for blockchain to support and accelerate circular supply chains, Circle Economy and Circle Lab hosted a series of Twitter chats on June 12, 13, and 14, where they invited people around the world to join the discussion online, share their insights, and explore what problems currently hindering circular supply chains the technology could help solve.Insights from our conversation below:

A primer on blockchain

First things first: what is blockchain, and what problems is it really trying to solve? Blockchain is essentially a ledger or a spreadsheet that is duplicated thousands of times across a network of computers (or “nodes”) and is designed to be regularly updated and continually reconciled. It’s the technology powering Bitcoin, but its applications go beyond cryptocurrency:

A6 My favourite one is @bext360 - really cool application of blockchain for to make the coffee supply more fair and transparent #circlechat

— Shyaam Ramkumar (@shyaamramkumar) 12 June 2018

A6 Another interesting case is @CryptoKitties: “collectible, breedable, adorable” digital cats, and one of the most popular use cases for #blockchain outside of #crypto! Do you know of other examples? #CircleChat

— Circle Lab (@thisiscirclelab) 12 June 2018 

What really makes blockchain unique is its decentralisation, and as such, using the technology really only makes sense in situations where no alternative, centralised solution can do the trick:

Any problem that can be solved with a central database. E.g. storing data for yourself, large volumes of data or even any system where you can simply trust a central party. #circlechat

— Circularise (@circularise) 12 June 2018

Thanks! Not saying it’s impossible, only that the benefit of using the tech and decentralizing trust needs to be substantial to justify its impact

— Daniel Hires (@projecthires) 11 June 2018

Blockchain and the circular supply chain

From a lack of proofs of concept and economic incentives to a regulatory environment that still favours linear business practices, we’re in no shortage of barriers to circular supply chains. Most relevant here, however, is the current inability of supply chain actors to track the provenance of materials, components, and products throughout the chain so that anyone along the way can assert their circularity – from the moment they were first extracted or created, all the way through their (many) life cycles.

A3 Supply chains have become so complex that it is difficult to have an understanding of the types of materials in products, or where it is sourced from #circlechat

— Shyaam Ramkumar (@shyaamramkumar) 13 June 2018

Plus who made it, how and where. As we go down the tiers, the visibility and traceability diminishes. #circlechat https://t.co/hGPEpn5Ed3

— Shijo Thomas (@shijothom) 13 June 2018

A3. #circlechat

It is not so much related to transparency and trust, but more related to opaque trace-ability and visibility. How certain can I be of the materials used in a product and the origins of those materials? How scalable is achieving visibility?— Shijo Thomas (@shijothom) 13 June 2018

By translating complex chains of custodies into distributed, immutable, digital trails, blockchain could enable manufacturers, recyclers, all the way to consumers to confidently assert the circularity of their products:

#Blockchain may actually help to share dismantlement & BOM information at end of life content across multiple owners, if may help to share information on circular assets - from cars to industrial machines or spares.#circlechat

— Stefan Weisenberger (@belobregovic) 14 June 2018

A6 #circlechat1. If the solution can capture all circular transactions from manufacture to re-manufacture.2. Maintains traceability of materials and processes.3. And the above is verifiable and scalable.

— Shijo Thomas (@shijothom) 13 June 2018

#Blockchain plays it advantage where multiple parties are involved. Supply chain work more efficiently if you can share information between parties (and do not wait for paper trail) .#circlechat

— Stefan Weisenberger (@belobregovic) 14 June 2018

And applications already exist! Bext360, for example, uses a combination of new technologies, including blockchain, to monitor coffee beans and provide fair compensation to farmers, and A Transparent Company also uses blockchain to improve transparency in the fashion industry!But it’s not all that easy.

Garbage in, garbage out

Blockchain is often cited as a particularly effective solution to situations where there is fraud or lack of trust in a system – but is that really the case?

Blockchain's is relevant in scenario with multiple parties that do not trust each other. Just thinking of scrap recycling where you need to proof whether the material is stolen or not.#circlechat

— Stefan Weisenberger (@belobregovic) 14 June 2018

The notion that blockchain can guarantee all data authenticity and cut out the need for trust entirely quickly falls apart when data entered in the blockchain is wrong or tampered with in the first place. This is how someone managed to convince the technology they were the original artist behind the Mona Lisa, for example:https://twitter.com/projecthires/status/1007305539670429698Humorous as it may be, this example sheds light on the serious implications of assuming data on the blockchain is always authentic – from fraudulent information on data of origin for different materials to potentially much more harmful implications on e.g. child labor or fair working conditions:

100%! In its most low-tech version, it could simply be a bribery to the person who certifies e.g. that a fisher was fishing in a certain area or with certain "sustainable" methods..

— Daniel Hires (@projecthires) 14 June 2018

#CircleChat @thisiscirclelab

A1 - If it can guarantee that all supply chain stakeholders provide accurate, uniform and verifiable data, then #blockchain is suitable. Else, it would be another system with garbage in and garbage out.— Shijo Thomas (@shijothom) 14 June 2018

Not a bandaid for trust

If blockchain cannot guarantee data authenticity in a system with inherent trust gaps, what can? Could pairing the technology with additional processes and on-the-ground, independent certification help ensure the validity of the information?

A4 #blockchain is a silver bullet in many people's minds and will automatically enable authenticity, but the data that you put into the blockchain needs to be authentic in the first place and a community to verify this #circlelchat

— Shyaam Ramkumar (@shyaamramkumar) 12 June 2018

A2: Transactions are unalterable. That's great. Now you need to create the link between a physical object and the digital representation - anything from identifying characteristics, to QR codes etc. . #circlechat

— Stefan Weisenberger (@belobregovic) 14 June 2018 

It seems like third party audits, tamper-proof technology linking physical objects to their digital identity, and trustworthy partners still have useful purposes to serve in a blockchain-based system – especially where sensitive and hard-to-measure information is involved.

Well a good example, I think this was with diamonds, to use measurable characteristics of an object that uniquely identify it. This ID can then be linked to movements.#circlechat

— Stefan Weisenberger (@belobregovic) 14 June 2018

That's one of the issues with certifying working conditions for fair clothing. You need to have a independent certifier on the ground that you trust, I believe. #circlechat

— Stefan Weisenberger (@belobregovic) 14 June 2018

Exactly. Third party audits. But even that can be tricky in countries with high corruption. #circlechat

— Agnes Krown (@AgnesKrown) 14 June 2018

Changing mindsets: from competition to collaboration

If trust still has a role to play in a blockchain world, then so should education, as a change in mindset will be key in getting stakeholders to work together, rather than against each other.

Tech are there, or can be built. But in a larger system, awareness and changing perception is a harder nut to crack. Without that, you can't force anyone to invest, and hence no tech can help

— Anti-National Indian (@IndianChutney) 13 June 2018 

Since the industrial revolution, supply chains have mostly followed a competitive model of doing business, limiting their opportunities to find, create, and leverage synergies.

A3 Sadly, supply chains can be very conservative in the way they deal with relationships and trusted parties, which can hinder collaboration towards #circular #supplychains #circlechat

— Shyaam Ramkumar (@shyaamramkumar) 13 June 2018 

A reluctance to share information, deeply rooted in the global race to low costs, coupled with information asymmetry that continues to benefit many actors in the supply chain – regardless of efforts being unnecessarily duplicated – all contribute to a competitive and counterproductive mindset.

Complete transparency is a risk. e.g. as a trader you can be willing to share product features (conflict mineral free), but you do not want to share the identity of the mine and be cut out next time. #circlechat

— Circularise (@circularise) 13 June 2018

It is still easier to just do your own thing and make money. Also, a lot of money is made by keeping information secret. Information = value in supply chains. #circlechat

— Circularise (@circularise) 13 June 2018

A4 #circlechatI think the monopolization is a result of limited knowledge in the industry on where to compete and where to collaborate. In supply chains, there can be a thin line between the two. The result is a duplication of efforts for all parties.

— Shijo Thomas (@shijothom) 13 June 2018

Consortium blockchains, and other versatile uses

To nudge supply chain actors further towards collaboration, initiatives like Circularise are leveraging blockchain, zero knowledge, and smart questioning to enable privacy and confidentiality among those that want to remain anonymous, don’t necessarily trust each other, but are still committed to greater transparency and collaboration within their supply chains.

A5: At second thought: #blockchain may actually help to expore just the data you need to share - between partners or competitors that do not trust. Thus, #blockchain could help to deal with confidentiality.#circlechat

— Stefan Weisenberger (@belobregovic) 14 June 2018

Consortium blockchains are another alternative for those supply chain participants that already trust each other but are not willing to share their data in a public forum. Semi-private and partially decentralised, consortium blockchains are controlled by a number of pre-selected nodes and deliver a number of advantages at the intersection between centralised systems and fully public blockchains.

A5: I believe it helps if you operate not an open, but a consortium #blockchain. This would be between business partners that normally have a certain level of trust. #circlechat

— Stefan Weisenberger (@belobregovic) 14 June 2018

Collaboration and transperency for sure. I may prefer to expose information on current transports or transactions rather in a protected environment of customer supplier and service provider - and not with everyone.#circlechat

— Stefan Weisenberger (@belobregovic) 14 June 2018

Designed properly, a blockchain could enable its participants to collaborate without compromising on key competitive advantages or on confidentiality and privacy issues, and would, in and of itself, present advantageous gains not to warrant additional incentives for participants.

There should be an agreement on standardized information to be shared. It should also consider safety of all supply chain participants, because we're dealing with multicultural industries. #circlechat

— Agnes Krown (@AgnesKrown) 14 June 2018

A6: My POV: a good #blockchain scenario has inherent value through cost savings or efficiency. You would not even need incentives.If you look at it from an end-consumer side: if I can trust a product is genuine and "purposeful", I might pay a premium.#circlechat

— Stefan Weisenberger (@belobregovic) 14 June 2018

Hammering the right nail in

Finally, it is worth noting that because blockchain is, to some extent, a solution looking for the right problem to solve, it’s just as important to recognise when not to use the technology. Taking a problem-first approach and asking the right questions is often crucial in identifying what an appropriate solution should, or shouldn’t look like. For example:

#CircleChat @thisiscirclelabA2 ; Honestly, i don't think this is a valid question. Is lack of trust and transparency a technology problem? Would implementing Blockchain, magically increase trust and transparency?

— Shijo Thomas (@shijothom) 14 June 2018

I don't get why this needs to be on a blockchain though? Isn't the biggest trust issue that the temperature measurement is not being tampered with (rather than the data collector being untrustworthy)?

— Daniel Hires (@projecthires) 14 June 2018

Why do we need Blockchain for tracking and monitoring? This is already being done by so many logistics systems.

— Shijo Thomas (@shijothom) 14 June 2018

This is a good point, many applications seem to plug #blockchain technology because of the hype rather than it having an actual use case #circlechat

— Shyaam Ramkumar (@shyaamramkumar) 12 June 2018

As tempting as delving into the world of blockchain is, we should be cautious not to try and fit square pegs into round holes.

What about today?

Is the technology appropriate for circular applications, as it currently stands today?

#Blockchaintechnology is in its infancy & lots of teams around the world are working on fixing the most fundamental flaws in the technology. Energy consumption in #blockchain is an issue today, but does that mean that we should wait with #circulareconomy applications? #circlechat

— Circularise (@circularise) 12 June 2018

Is the energy use of blockchains offset by the environmental positive impact they can make by improving circular economy applications? Is there any research or scientific evidence on this? #circlechat

— Nosy Noah (@nosy_noah) 12 June 2018

To drive the adoption of and improve the technology, we definitely need more organisations and individuals experimenting with blockchain, and there is great potential for the technology to address key circularity barriers. But ultimately, the circular economy calls for systemic change, and technology is but one of the many drivers we need along the way.

Key takeaways:

  1. Make sure blockchain is the right solution to your problem
  2. Educate your ecosystem to move away from competitiveness to collaboration
  3. Design your blockchain so it delivers value and meets the needs of supply chain participants
  4. Make sure you have the right mechanisms in place to ensure data is authentic

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June 21, 2018
City-as-a-Service

During the WeMakeThe.City festival celebrated in June, Circle Economy launched the ‘City-as-a-Service’ publication, which offers a first glimpse into the ‘circular city of the future’. This publication is an initial and practical exploration of how service models will shape the way in which societal needs can be met in a future urban environment and how cities can take a leadership role in a transition towards a circular economy. The publication builds upon the concepts of the ‘City-as-a-service’ report, as initiated by ABN AMRO.

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