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Time to walk the talk of building back better. It's been a year since the covid-19 pandemic began to shake up life as we know it. Many of us have come to realise that the impacts of the virus aren't going to disappear anytime soon. The need to boost our resilience to future shocks has never been more salient. But while talks about the need to build back better have dominated public debate, many concrete long-term actions are yet to materialise. It's time to walk the talk.
That is why Circle Economy invites circular economy enthusiasts and experts to share and discuss practical examples of how circularity can support resilience in times of unforeseeable change.
Together, we will crowdsource a digital collection of case studies and ideas, and discuss selected examples from this collection during an expert dialogue on 17 December 2020.
Boosting resilience in the circular economy. Our latest research highlights the resilience-building potential of the circular economy. Particularly three circular economy strategies—decentralisation, resource efficiency and transferable skills—can contribute to the resilience of nature, economies and communities but also carry risks.
The question that we ask ourselves now is: how can we realise this potential in practice?
From theory to action. Circle Economy invites you to jointly explore answers to this question in two steps:
We will crowdsource a digital collection of case studies and ideas that demonstrate how the circular economy can or is already helping to build resilience.
Please add your circular economy case studies and ideas related to the hotspots: decentralisation, shared resources and transferable skills to our digital collection (Password: Resilience2020).
Please add your name and contact details to your case studies if you'd like to be contacted to reflect on your contribution during the expert dialogue on 17 December 2020.
On 17 December 2020 from 3 - 4.30 PM (CET), we explore the viability of selected cases from our crowdsourced digital collection during an expert dialogue.
We are excited to be joined by experts My Selleberg (Researcher at Stockholm Resilience Centre), David Jácome Polit (Chief Resilience Officer, Quito, Ecuador), Natalia Papu (Research Analyst at Circle Economy) and Esther Goodwin Brown (Partnerships Manager and Strategist at Circle Economy).
After the dialogue, we will share a summary of the insights and learnings we gained during the session. This summary will provide businesses, governments and communities with anchor points for strengthening resilience through circular economy and for walking the talk of building back better.
Since 2012 Circle Economy supports businesses and governments in their circular journey by creating and sharing knowledge and building practical tools. In our effort to collect and share knowledge and inspiration about the circular economy to all we launched the Knowledge Hub in 2018. By digitising knowledge, opening up access, and encouraging co-creation, we have been able to break down information silos and fuel cross-industry collaboration and innovation.
Over the last years, however, we noticed a growing need for circular frontrunners to connect, collaborate on common barriers and have access to tangible circularity tools, frameworks and metrics. That is why we have now set out to create a circular economy community. A community that goes further than providing knowledge and inspiration, but that enables people to connect, discuss, collaborate and find tailored, industry-specific knowledge and tools.
But… in order to build a community for the people, we need your help! Please take a look at the features we have highlighted for you and tell us what you need to kickstart your circular journey.
The circular economy has the potential to change the world, and we believe the time to bring the concept to the kitchen table – so that everyone, from entrepreneurs to big brands, can play a role in making it a reality – is now.
→ Explore our community beta-environment here
You are about to enter the beta-version of our community environment. We aim to offer several community features that allow you to act, learn, connect and collaborate to accelerate the circular economy. Take a sneak peek at the features that we are planning to build, tell us what you think and what you would like to see in our community environment.
As part of the Thriving Cities Initiative, we are helping cities to Downscale the Doughnut and understand how they can thrive within social and planetary boundaries. But you might wonder: How can I apply Doughnut thinking to my city?
We are excited to share the City Portrait canvas; an interactive tool to help bring Doughnut thinking into the hands of urban changemakers.
Together with DEAL, and C40, and four pioneering cities around the world, we have developed this interactive workshop tool to guide the design of city strategies and initiatives in a holistic way; to support a green and just recovery from current crises.
A landmark report published today by Zero Waste Scotland and Circle Economy reveals that Scotland's labour market is in a strong position to benefit from the circular economy transition. While more than 200,000 jobs (8.1%) already contribute to the circular economy, further investments can help the country address existing social inequalities by redistributing job opportunities, creating sustainable jobs and providing more widespread access to essential goods and services.
As Scotland's decision-makers plan the country's economic recovery from the covid-19 pandemic, the report identifies a wide-ranging mix of new circular roles and skills needed to help Scotland Build Back Better by forging a truly national circular economy. It sets out a vision of the future of work in three priority areas – construction, the bioeconomy and capital equipment, such as decommissioning energy infrastructure from oil rigs to wind turbines.
The skills pathways identified in this report demonstrate, there is a strong need for digital skills development, particularly in the construction sector. This can maximise the potential of technologies to improve communication, collaboration and material efficiency, all central to the circular economy. Maximising the promising future of the bioeconomy will require work to raise awareness of the significant business and job opportunities it brings to turn waste streams into value and make this emerging sector a mainstream career choice for graduates. Meanwhile there is a valuable window of opportunity to grasp the varied redeployment options which decommissioning of oil rigs and wind turbines in Scotland’s energy sector presents.
The report, entitled 'The Future of Work: Baseline Employment Analysis and Skills Pathways for the Circular Economy in Scotland', has been launched alongside Circle Economy's Circular Jobs Monitor. This online tool that gathers, displays, and keeps track of the number and range of jobs that are part of the circular economy across the world.
It shows that with 8.1% of jobs being related to circularity, Scotland is on par with other countries where assessments have been conducted, such as the Netherlands (8.6%) and Belgium (7.5%).
As a first broad assessment of circular jobs and skills in Scotland, this report serves as a basis for future efforts to build on. These efforts will include the production of a competence framework, the enhancement of data collection and analysis, the support of innovative forms of learning and knowledge exchange, investment to support the creation of circular jobs and the promotion of the circular economy as a career destination.
Keep up to date with our work: https://www.circle-economy.com/circular-jobs-initiative
Sign up for updates: https://www.circle-economy.com/circular-jobs-initiative/contact
For those of you who have been following Circle Economy for a few years now, you might remember the very first version of the Knowledge Hub – our online, open-access library of circular case studies.
In its very first version, the Knowledge Hub was a simple wiki-style tool powered by Atlassian Confluence that we used in our own work to keep track of interesting cases to feature in workshops, presentations and reports.
In 2018, we launched the Knowledge Hub in its current version, as part of a broader digital ecosystem: Circle Lab.
In the next few months, we are thrilled to be launching V3 of the Knowledge Hub, which will finally enable our online community–that’s you!–to make it truly their own by contributing, updating and curating cases in our ever-growing database. The new version will also enable users to create and grow dedicated collections and to share them with their audiences online.
Circle Economy, with the support of the Goldschmeding Foundation, has initiated a project during which we aim to define the optimal circular textiles value chain for both people and resources in the Netherlands.
The project strives to establish a current baseline of the existing jobs and skills pertaining to the textiles industry in the Netherlands and develop scenarios outlining various circular value chains. Research will quantify the potential job creation and job losses related to these circular supply chain scenarios, and in particular, qualify their potential to open up employment opportunities for vulnerable workers. The skills needs related to the scenario with the highest potential for positive social impact will be identified.
Running during 2020-2021, the project aims to support the Netherlands’ aim to be fully circular by 2050. The corresponding necessary shift to circularity in the Dutch textiles industry will have a vast impact on the workforce involved as the transition to circularity entails shifting roles across the end-of-use value chain.
To date, existing jobs and corresponding skills might not meet the requirements of a circular textiles industry. Pursuing a circular economy for textiles - and more broadly for all consumer goods - in the Netherlands will have socio-economic effects, locally and abroad. However, the implications and opportunities of the changing nature of work and associated skills for the textiles industry are still very much unknown.
During the project, we expect to validate findings with pilots as well as develop recommendations for the government, industry and education sector toward the implementation of the highest potential circular supply chain scenario, both for textiles specifically and consumer goods in general.
This project is now ongoing. Final results will be published in May 2021.
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The Coalition Circular Accounting has explored the ambition of three Dutch facade builders—Alkondor, Blitta and De Groot & Visser—that aim to offer Facades-as-a-Service: a pilot for a customisable, dismantable facade as a method to battle waste and increase the circularity of buildings.
Our global economy has hit a new milestone: for the first time in history, it is consuming 100 billion tonnes of materials a year. Concurrently, the global reuse of resources is in reverse, with the global circularity rate falling from 9.1% in 2019 to 8.6% in 2020. In reversing this trend, the built environment is a prominent sector to consider as it is the world’s most material intensive sector consuming 42.4 billion tonnes annually. By 2050, the European building stock alone will have grown by 13%. Within this sector, sustaining and extending the lifetime of buildings and infrastructure and appreciating the future value of built assets can have great impacts in reducing the CO2 footprint and becoming more circular.
In its latest whitepaper, the Coalition Circular Accounting explores the ambition of three Dutch facade builders — Alkondor, Blitta and De Groot & Visser — that plan to offer Facades-as-a-Service as a method to battle waste and increase the circularity of buildings. This is a pilot for a customisable, dismantlable facade that provides a building with ventilation, sunlight regulation and energy generation, all adjustable by remote control. Instead of being sold, this facade will be realised as a service and consequently remain in possession of its builders. However, current financing models can present major barriers for companies with circular business aspirations. Asset ownership for example, characterized by an extended balance sheet, is unpopular amongst financiers and suppliers, whilst essential for incentivising a long term business perspective.
The Facades-as-a-Service case: Insights and takeaways
The three facade builders, Alkondor, Blitta and De Groot & Visser, are collaborating with area developer AM, in the realisation of the pilot project ‘Facade-as-a-Service’ in the Bajeskwartier area development by AT capital, Cairn and AM in Amsterdam. By retaining ownership of their facades, the three Dutch builders aim to expand the lifespan of their products, maintain control of valuable assets and generate a profitable revenue on the long run. The Product-as-a-Service business model benefits circular construction by incentivising manufacturing companies to retain responsibility for their product and its performance and environmental impact before, during and after its lifespan.
In light of the current and persistent financing barriers facing circular companies in the built environment, the Coalition Circular Accounting has launched a white paper that elaborates on the opportunities and risks of Product-as-a-Service business models. The paper proposes a new contractual structure as an enabler and raises the issue of the misfit between current financing structures and circular business models. The main takeaways of the Facades-as-a-Service case are:
We tend to view circular business models from a traditional perspective. Product-as-a-Service (PaaS) is characterized by access to the product, the performance of the product and the services around the product. With Product-as-a-Service, the value for the consumer does not lie in owning the product but in the option to use a service, thereby unburdening the consumer from the responsibility for maintenance and repairs.
A Product-as-a-Service company is often asset-heavy. Namely, ownership shifts from the consumer to the service provider. Therefore, one cannot simply compare PaaS companies with traditional companies. PaaS companies keep control of their assets which is reflected in a growing balance sheet. Where a growing balance nowadays is still interpreted as risky, in the circular economy this will signal that companies are taking long term responsibility for their products.
A fundamental principle of the circular economy is the infinite use of raw materials. Assigning a value to these resources is essential, wherever they are. The term residual value (the estimated value of an asset at the end of its useful life) detracts from this circular idea. That is why we prefer to talk about harvest value. Harvest value is not only important in principle, it can also be the decisive factor for the success of a circular business model since it creates new business opportunities by for example serving as security for financing
In the transition to a circular economy, we regularly run into laws and regulations that are obstructive or lacking. In the circular economy—as is the case with Product-as-a-Service—it may be opportune to shift ownership from a consumer to a service provider. In the built environment, this leads to problems because building components that are offered as a service legally become part of the building (otherwise known as accession). That is why new legal structures have been created that make Product-as-a-Service in the building sector easier to implement.
Financiers are attempting to translate new circular business models into appropriate financing structures. Pre-financing assets are at the core of the Product-as-a-Service business model. The underlying security of Product-as-a-Service is a combination of the cash flows and harvest value of the assets. Because the Product-as-a-Service model is still not commonly used and financiers have to operate within the current standards of the regulators, the market is still reluctant to finance these types of business models. The interpretation of financial ratios and underlying securities must be adapted to circular thinking.
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Coalition Circular Accounting: Concrete challenges, replicable solutions
The Netherlands Institute of Chartered Accountants (NBA) and Circle Economy founded the Coalition Circular Accounting to identify accounting related challenges in the circular economy. Together they create solutions and best practices to overcome these barriers. The coalition includes experts and scientists in the field of finance, accounting and law from: Invest-NL, ABN-AMRO, Rabobank, Triodos Bank, KPMG, Allen & Overy, Sustainable Finance Lab and scientists associated with Nyenrode Business University and Avans University of Applied Sciences.
Throughout 2020, the coalition will bring together experts to discuss and work out three specific, existing circular business models with a valuation or reporting issue. These cases are chosen to cover a diverse range of challenges. The presented findings and solutions are generalized to be applicable to other cases elsewhere and made freely available in the form of whitepapers.
Want to know more?
Find the full report here to learn more.
If you are interested in participating in the Circular Accounting Coalition, or would like to know more, please contact us here.
If you would like to stay up to date on the Circular Accounting Coalition, please sign up to the newsletter here.
Today, Circle Economy launches the first structural analysis of the relationship between the circular economy and social-ecological resilience. Amid the social and economic fallout caused by the covid-19 pandemic , calls to 'build back better' often couple the need to increase the resilience of our systems with the circular economy. Our research now provides the necessary analytical support for the relationship between the two concepts, but warns that, if not managed effectively, some circular economy trends may compromise resilience. Governments and businesses are advised to carefully integrate resilience thinking into their transition plans.
Two circular economy practices in particular build resilience. First, the use of secondary and renewable resources boosts resilience by increasing the diversity of feedstock available to industry. Second, decentralised value chains—a growing trend in circular economy developments—are less vulnerable to global shocks and support localised and therefore swift decision making.
For a circular economy to succeed, the labour market also needs to change. In particular, transferable skills among workers will be necessary to enable the transition to new business and service models, and a culture of lifelong learning will be crucial when the types of skills that are needed continuously change. If promoted, these two characteristics of the labour market could make for a mobile and agile workforce that is less vulnerable in the face of shocks as it can quickly adapt to change.
The paper also highlights two potential trade-offs between circularity and resilience that could compromise resilience in the transition if they are not aptly addressed. First, the circular economy's propagation of resource efficiency could backfire when regular activities are interrupted, such as during the covid-19 pandemic. By designing out redundancies, circular strategies reduce the amount of materials and products available to act as buffers when supply chains are disrupted. Second, flexible labour contracts, which are rising in prominence in the circular economy through peer-to-peer marketplaces, business-to-consumer services or on-demand manufacturing, could increase individual workers’ vulnerability.
Based on these insights, the paper provides key recommendations to help governments and businesses ensure their circular transition also strengthens their resilience.
For example, to manage the potential trade-offs of resource efficiency, businesses are advised to strike an effective balance between redundancy and efficiency. This requires a mindset shift from scarcity to abundance, searching for alternative or more highly available resources, and the standardisation of components. Governments should support and facilitate circular value chains by creating networks between regions, countries and industries, supporting the establishment of the required infrastructure through innovation and incentives. Both should develop impact indicators and measurements that move beyond measuring only overall efficiency and take resilience into account.
As we continue to navigate uncertain times, reshaping our systems to be resilient to ongoing and future shocks is imperative. Our paper highlights the need to carefully evaluate how circular economy trends and resilience thinking will impact one another in practice. Governments and businesses need to integrate the two concepts across circular economy strategies such as the EU’s Circular Economy Action Plan. Applying resilience thinking to shape the transition towards circularity ensures the creation of positive value for both society and planet.
This project was made possible thanks to the support of the Goldschmeding Foundation.
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