Today, Circle Economy launches the Circularity Gap Report 2020 in Davos. Our world is now only 8.6% circular. Of all the minerals, fossil fuels, metals and biomass that enter it each year just 8.6% are cycled back. This has fallen from 9.1% in the two years since our annual report was first launched in 2018.
Closing the circularity gap serves the higher objective of preventing further environmental degradation and social inequality. The end goal is to establish an ecologically safe and socially just operating space for mankind, in which countries have a pivotal role to play.
Some countries operate well within the ecological boundaries of our planet, but without satisfying basic social needs. Other countries do fulfil societal needs but do so by overshooting the sustainable means of the planet. Therefore, all countries are developing. All countries are unique when it comes to their ecological footprint and ability to provide for their people. Some face similar barriers and many are confronted with the same global trends. This year's Circularity Gap Report examines and extrapolates common challenges and opportunities experienced by distinct country groups and provides action pathways for each.
Explore how countries can help close the global circularity gap!
A pilot project of Dura Vermeer and Overijssel Province has provided a practical case for investigating how a circular road can be exploited as a Road-as-a-Service. A white paper on this project, launched by a new coalition for circular accounting, demonstrates how to modify and rethink current financing and reporting practices for the circular economy.
A discussion about contractual structuring and its implications has led to new insights. Dura Vermeer wants to retain the economic ownership of the road while providing its functionality (i.e. the use of the road) as a service to their client Overijssel Province. This incentive ensures that it will maintain the road as well as possible from its knowledge and expertise. This will ultimately lead to a higher residual value.
The participants formed a Coalition Circular Accounting (CCA). This is a collaboration between Circle Economy, Sustainable Finance Lab, The Netherlands Institute of Chartered Accountants (NBA), Dura Vermeer, ABN AMRO, Rabobank, KPMG, Provincie Overijssel and scientists of Erasmus University, Open Universiteit, University of Groningen, Nyenrode Business University and Avans University of Applied Sciences. The CCA was co-funded by Nederland Circulair!
To sell or not to sell
The fundamental question is “to sell or not to sell”, according to CCA. Financial reporting is about economic ownership and the transfer of risks and rewards. If at the end of the contract, economic ownership is transferred to the client (in this case Overijssel Province), it still appears on their balance sheet from the start as it would in a ‘normal’ sale. The alternative is to specify explicitly the ongoing nature of the agreement, which excludes a transfer. This ownership question has implications for the reuse of the road and its materials at the time of harvesting. The owner of the road is incentivised to optimize the durability of the road, its maintenance and (re) use of raw materials, with potential effects such as a longer lifespan, lower overall maintenance costs, and higher residual material value.
Combining different financial structures
This above decision has important consequences for the balance sheet of both parties and how to obtain financing for the investment. When no sale takes place, we have to alter our traditional financing perspective. A possible solution is to create a combination of financing projects, while also having some corporate debt that should lead to a different type of financing.
A surprising result is the fact that the actual accounting of the circular road turned out not to be the main challenge in this case. Creating a financial incentive for circularity is the foremost objective. A contractual agreement should express circular incentives and the distribution of risk and reward. The actual accounting ultimately follows.
Next steps
The open-source report of the CCA on the project is freely available online.
In 2020, the CCA will conduct 3 more circular case studies with the goal to identify the barriers in accounting, reporting and valuation and come up with practical solutions and combining the learnings in a white paper.
Amsterdam, December 20, 2019 – Today, Circle Economy announces the start of a CEO transition: as of February 1st 2020, Harald Friedl, Circle Economy’s current CEO, will step down, handing over his responsibilities to Martijn Lopes Cardozo, currently a board member of Circle Economy, who will take over as ad interim CEO. While the search for a new CEO is underway, Circle Economy wishes to thank Harald Friedl for his support to the organisation in his 3 years of service.
Robert-Jan van Ogtrop, Chairman of the Supervisory Board: “We want to thank Harald for his great work in the last 3 years. Under his leadership the organization has grown significantly and has developed many new initiatives and global alliances. Great examples are the global Circularity Gap Report, the collaboration with Kate Raworth around the work on circular economies in cities – and also scaling up our programmatic work on Textiles, Finance, Jobs & Skills, and Design and Brands. Internationally we have built successful partnerships, such as our work with the World Economic Forum through the Platform for the Acceleration of the Circular Economy. Harald leaves Circle Economy in a strong position – both from a strategic and operational perspective. Together with the management team he has taken Circle Economy from a start up to a scale up. We are grateful to him and welcome his ongoing support for the organization.”
Moving on from his role as CEO, Harald Friedl will continue to support and be engaged with Circle Economy as an ambassador for the organisation and as a member of its international advisory board.
Harald Friedl: “I came to Circle Economy to give the circular economy transition a global push and to voice key topics – such as the societal perspectives and the need for new financial and business models. I focused on building practical and scalable solutions on the ground and a movement based on multi-stakeholder models, collaboration, transparency and community. I would like to thank everyone who I had the pleasure to work with and who supported our mission. Together we have accomplished so much, driven by purpose, heart and a sense of urgency. I am proud to say that in the last 3 years, I have been able to achieve the set KPIs: internationalise, focus and grow this organization. A lot remains to be done - the circular economy transition is bigger than all of us, it is one of the greatest tasks of our time. We have no time to lose as we only have another decade to change the course we are on right now.
Therefore I am looking forward to embarking on the next journey to ignite a sustainable future by putting vision into action: building and supporting more impact organizations in the public and private sector, businesses and scale-ups such as Circle Economy to ensure action is happening. We have grown Circle Economy together and I am confident my successor will continue building its bright future together with our excellent team."
On 21st January 2020 Circle Economy will launch for the 3rd time with its partners the “Circularity Gap Report” during the World Economic Forum in Davos.
Press contact:
Please reach out to our press office at press@circle-economy if you are interested in featuring the press release and/or have an interview request.
About Circle Economy
We work to accelerate the transition to a circular economy. As an impact organisation, we work to identify opportunities to turn circular economy principles into practical reality.
With nature as our mentor, we combine practical insights with scalable responses to humanity’s greatest challenges. Our vision is economic, social and environmental prosperity without compromising the future of our planet. Our mission is to connect and empower a global community in business, cities and governments to create the conditions for systemic transformation.
More than 50 businesses are now part of our membership community (from large multinationals to active SMEs and innovative start-ups) with whom we co-create practical and scalable solutions, making the circular economy happen. In addition, we work with cities, governments, CSOs, NGO’s, advisory boards and intergovernmental bodies.
Circle Economy is happy to welcome allnex, a leading supplier of speciality chemicals, offering a broad range of coating resins, additives and crosslinkers to its membership community. The company has adopted the circular economy as one of its five sustainability pillars and sees it as the perfect model to reconcile their environmental and profit pillars of sustainability through product and process innovation – both of which are essential to the allnex identity.
“We’re thrilled to be a member of Circle Economy. It’s the responsibility of each of us to make a dedicated effort to protect our planet, and at allnex we are committed to contributing to the achievement of the United Nations Sustainability Development Goals (UNSDG). We launched our inaugural Primavera Day at ECS this year and took extra steps by publicly announcing our goals as well in April. We’ve also already begun challenging our sites to push the goals even higher for 2020 – including using our history of Innovation to create new products that support a circular economy.” – Michela Fusco, Head of Sustainability at allnex.
To enable repairability and recyclability of products, collaboration with a company like allnex is vital. By collaborating with product developers and recyclers the company can develop secure and advance the possibility to disassemble or recycle products.
By becoming a member of Circle Economy, allnex will have access to other businesses and industries that are also working to realize the circular economy and can share ideas and best practices while working with industry leaders to make a positive change in our world.
More about allnex
allnex is a leading global producer of industrial coating resins and additives for architectural, industrial, protective, automotive and special purpose coatings and inks. allnex is recognized as a speciality chemicals pioneer and offers an extensive range of products including innovative liquid resins and additives, radiation cured and powder coating resins and additives, and cross linkers for use on wood, metal, plastic and other surfaces. Today, allnex has a strong global presence with 4000 employees worldwide, 33 manufacturing sites, and 23 research and technology support facilities. www.allnex.com
In terms of size and location, the Port of Rotterdam is strategically well-positioned to develop into a circular hub. The local industry, logistics sector and surrounding region are all major consumers of raw materials and generates a wide variety of waste flows. Valorising and recycling these residual flows offers Rotterdam new economic opportunities and societal benefits.
This was the main message from the report 'Rotterdam towards a circular port - a deep dive into Waste-to-Value opportunities' that is published today by the Port of Rotterdam Authority and Circle Economy. The report maps out the current waste flows in the port, as well as developments within a number of innovative industrial companies that are already committed to circular activities. The report also provides insights into promising new circular activities that could be developed.
Even though most of the industrial waste within the Port of Rotterdam is already recycled or used as fuel, a significant proportion of the waste is still incinerated or sent to landfill. By creating value from residual flows, Rotterdam can strengthen its position as a circular port and an international Waste-to-Value Port with a leading position in raw material productivity and low-carbon, circular production.
Ports are engines for the economy - and can become accelerators for the circular economy. Ports like the Port of Rotterdam are where material flows from all over the world and all stages of value chains come together, especially of industries that are huge consumers of raw materials. It's great to see that the Port of Rotterdam is taking a leadership role to explore how circular economy strategies can be realized and contribute to environmental, social and economic prosperity." – Harald Friedl, CEO at Circle Economy
The circular ambitions of The Port of Rotterdam will at first, focus on encouraging innovation by attracting new circular initiatives and scaling start-ups. Looking towards the future, the Port will focus on promising technologies that can cope with the large volumes of the Rotterdam region. Secondly, sorting and recycling are priorities. This is a perfect match because all the links of a variety of value chains are present in Rotterdam: from primary production, transport, sorting and recycling to a market for a range of secondary products. The third focus area is industrial symbiosis. The concentration of industrial and logistical activities makes it relatively easy for companies to exchange products and residual flows, and make use of shared facilities. Finally, there is an emphasis on CCU (Carbon Capture & Utilisation), a technology in which CO2 is captured and reused as a resource for the industry.
The focus on circularity fits in with the broader ambition of the Port of Rotterdam to align with the Paris Climate Agreement goals. The Port aims to play a leading role in the international energy transition and has created a roadmap to achieve the national climate goals for 2030 and 2050 in three stages. Circularity plays an indispensable role to achieve these goals.
The Fibersort project aims at realising the widespread implementation of the automated sorting technology by validating it as a key value adding innovation to enable textile-to-textile recycling.
While the challenges and opportunities of used textiles are increasingly in the spotlight of governments, industry, and civil society, considerable system changes are required to transition towards a circular economy for textiles. Throughout this report, policy recommendations are formulated showing the legislative, economic and soft instruments that regional, national and the European governments have at their disposal to allow the Fibersort, as well as other automated sorting technologies, to live up to their full potential.
We are actively seeking textile collectors and sorters, recycling technologies, brands and retailers, and other circular textiles projects to join our team of collaborators. Be part of the change here.
Apparel brands Asket and Lindex are the first of four brands to join Circle Economy’s Switching Gear project in order to explore circular business models and connect with a global network of rental and recommerce experts.
“Circular business models such as recommerce and rental offer commercial opportunities for brands to innovate their business model while optimising the useful life of clothes to their full potential and reducing the overall impact of the industry. With Switching Gear, we aim to accelerate these business models in the apparel industry by providing brands with the expertise they need and connecting them with the right partners to successfully launch a pilot by 2021.” says Gwen Cunningham, Circle Textiles Programme Lead.
In partnership with Fashion for Good, the project has also established the Switching Gear Enabling Network; a network of over 30 rental and recommerce experts and service providers to support Asket, Lindex and other participating brands that join in their journey to develop and pilot a new business model. Members of the network include: ThredUP, RePack, Eileen Fisher, Style Lend, Lizee and The Renewal Workshop.
The Swedish menswear brand Asket is on a mission to rewrite the rules of the whole fashion system and focus on putting care back into apparel – addressing how clothes are made, marketed and consumed. Having stepped out of seasonal collections that only fuel fast-consumption habits, the start-up instead introduced a single permanent collection of zero-compromise garments. Every piece is in the collection is marked with its traceability journey, breaking down the garment into its raw components and tracing it back to their origin. They also offer stain, repair and care guides, aimed at getting people to better care for their garments.
“We want to continue to lead by example and see that a recommerce or rental business model would allow us to take our mission to change the way we consume clothes and reduce waste even further. Joining Switching Gear will fast track our thinking, and we are excited for the collaboration opportunities that come with the Switching Gear Enabling Network.” – August Bard-Bringeus, Co-founder at Asket
Lindex, following up on sustainability promise
Back in April, Swedish fashion retailer Lindex launched a sustainability promise that positioned climate action, a circular business approach, and water responsibility at the core of the company’s vision. The sustainability promise also set the fashion company’s climate goals around emissions, materials, and water efficiency, such as ensuring 100% of Lindex materials are either recycled or sustainably sourced by 2025.
“We want to prolong the lifetime of our products and use resources in the smartest way possible throughout our operations. A circular business approach will help us with our goals to reduce material streams and sending zero waste to landfill, and the guidance of the Switching gear project team will be of great value in our work to fulfill our promise to future generations”, says Anna-Karin Dahlberg, Corporate Sustainability Manager at Lindex.
Towards an inclusive, fair, and sustainable industry
The past two decades have seen a dramatic decrease in the amount of times clothes are worn. Coupled with a shift towards fast fashion, average consumers today buy 60% more items than they did 15 years ago and wear them for half as long. 70% of closets usually go unworn and it is estimated that 33% of women wear items as little as 5 times before disposing of them.
The Switching Gear project, supported by C&A Foundation, is part of the Bridging the Gap initiative, a group of six organisations working to stimulate sector-wide collaboration, facilitate innovative technologies and the design of best practices to enable the implementation of circular business models in the fashion industry’s supply chain. Other strategic partners of the Bridging the Gap group include the World Resources Institute, WRAP, London Waste and Recycling Board, QSA Partners and Forum for the Future.
The Circle Economy project team is currently looking for additional brands interested in developing a rental or recommerce pilot and exploring circular economy opportunities for their brands. “Interested brands and organisations should contact us”, Gwen adds.
For press enquiries, please contact yasmina@circle-economy.com
To join the project, please visit https://circle-economy.com/textiles/switching-gear
About Circle Economy
We work to accelerate the transition to a circular economy. As an impact organisation, we work to identify opportunities to turn circular economy principles into practical reality.With nature as our mentor, we combine practical insights with scalable responses to humanity’s greatest challenges. Our vision is economic, social and environmental prosperity without compromising the future of our planet. Our mission is to connect and empower a global community in business, cities and governments to create the conditions for systemic transformation.More than 50 businesses are now part of our membership community (from large multinationals to active SMEs and innovative start-ups) with whom we co-create practical and scalable solutions, making the circular economy happen. In addition, we work with cities, governments, CSOs, NGO’s, advisory boards and intergovernmental bodies. www.circle-economy.com
About Asket
Founded 2015 in Stockholm by August Bard Bringéus and Jakob Dworsky, ASKET is an independent online-only menswear brand on a mission to end overconsumption and restore value in apparel. Replacing the mindless churn of seasonal collections with a single permanent collection of meaningful essentials built on full transparency and constant improvement, ASKET is reducing wardrobes to the pieces we actually need and helping us care for them longer.
About Lindex
Lindex is one of Europe’s leading fashion brands, with approximately 460 stores in 18 markets and sales online. Lindex offers inspiring and affordable fashion for the fashion interested and conscious woman. The assortment includes several different concepts within women’s wear, kids’ wear, lingerie and cosmetics. Lindex sustainability promise is to make a difference for future generations by empowering women, respecting the planet and ensuring human rights.
About Fashion for Good
Fashion for Good is the global initiative that is here to make all fashion good. It’s a global platform for innovation, made possible through collaboration and community. With an open invitation to the entire apparel industry, Fashion for Good convenes brands, producers, retailers, suppliers, non-profit organisations, innovators and funders united in their shared ambition. At the core of Fashion for Good is our innovation platform. Through our Fashion for Good-Plug and Play Accelerator we give promising start-up innovators the expertise and access to funding they need in order to grow. Our Scaling Programme supports innovations that have passed the proof-of-concept phase, with a dedicated team that offers bespoke support and access to expertise, customers and capital. Our Good Fashion Fund will catalyse access to finance to shift at scale to more sustainable production methods.
Fashion for Good also acts as a convener for change. In October 2018 the Fashion for Good Experience has opened: the world’s first interactive tech museum dedicated to sustainable fashion innovation. In its hub in Amsterdam, Fashion for Good also houses a Circular Apparel Community co-working space, creates open-source resources like its Good Fashion Guide about cradle-to-cradle apparel. www.fashionforgood.com Fashion for Good’s programmes are supported by founding partner C&A Foundation and corporate partners adidas, C&A, BESTSELLER, Galeries Lafayette Group, Kering, Otto Group, PVH Corp., Stella McCartney, Target and Zalando.
About C&A Foundation
C&A Foundation is a corporate foundation here to transform the fashion industry. They work with change-makers all over the world, offering financial support, expertise and networks to make the industry work better for every person it touches. The foundation collaborates with a variety of stakeholders, including NGOs and industry partners, and works closely with smallholder farmers and garment workers. C&A Foundation is driven by the belief that despite the vast and complex challenges, collaborative action can make fashion a force for good. www.candafoundation.org
About Switching Gear
“Switching Gear” is a C&A Foundation supported project that will guide 6 brands on a circular innovation process towards the design and launch of rental and recommerce business model pilots by 2021. Find more information about the project here: https://www.circle-economy.com/textiles/switching-gear/
The Circular Brands Workshop brings together the world of strategic innovation consulting and creative brand building. Where the common understanding and analysis of circularity starts from the supply chain perspective, Circular Brands makes marketing, branding and consumer culture the starting point for circular opportunities.
We live in an era of creativity, where we can redesign everything from the ground up – including how we do business. Brands have the power to do this. They have the opportunity to drive business innovation and change consumer culture and consumption. But how do we create brand & business growth whilst creating a positive impact on society?
We invite you to learn from circular leaders sharing their best practices, insights, experiences and tools to become the driver of a circular vision, able to envision and map a circular future for your brand. Learn how to apply design thinking methods to create a portfolio of circular brand opportunities with your team and join the growing network of circular brand pioneers.
Circular Brands is a one-day innovation workshop rooted in a co-creation approach. Brands can participate with a multidisciplinary team of creative, brand, design and marketing leaders, and other leading brands. The workshop is led by a team of circular experts, creative/design coaches and experienced innovation facilitators.
During the workshop brands will map and create a circular future vision, define brand-led business opportunities and develop brand concepts, products and services, and create a roadmap for implementation and circular leadership development.
Are you interested to join our Circular Brands Workshop? The Next edition will take place on the 11th of December in Amsterdam
Contact us for more information!
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