NEWSLETTER by Alessia Falsarone. The author acknowledges the team at The University of Chicago Circular Economy and Sustainable Business Management Program and all participants of the innovation knowledge hub for their insights and collaboration.
Eighty-seven participants from thirteen countries, representing eighteen sectors of the global economy and thirty implementation-ready use cases, all within a span of twelve months. 2023 has truly been a full year of circularity by design in the Circular Economy and Sustainable Business hub. We have engaged in extensive learning, sharing best practices, and leveraging each other’s strengths, even as we confront what I often call ‘sprint failures’ – those inevitable hiccups that organizations endure and grow stronger from.
As we enter 2024, we have much to be grateful for, particularly the creative builders, pragmatic investors, and gifted scientists who sustain the evolution and implementation of circular economy best practices. There are valuable trends to capitalize on and abundant opportunities for new collaborations. All of this comes with the understanding that sustainable businesses embark on long-term journeys that yield resilience dividends. With a stronger confidence and commitment to service, I extend my wishes for a year of growth and partnership.
| The Science of Impact
One of the observations that has recurrently appeared in our engagement regarding circularity this year, is that the future of sustainability is both circular and digital. Circularity Vehicle Passports (CVPs) offer an example as one potential tool that could reshape the mobility industry in the new year and an example of regulatory support favoring a sector’s overall green transition through a circular transformation (in this case, that of automotive OEMs). As currently being reviewed by the EU in the context of its 2020 New Circular Economy Action Plan and the End-of-Life Vehicle Directive, CVPs promise to deliver the entire lifecycle of a vehicle through a digital template comprising design, materials, emissions and environmental impact data and insights.
Where is their real impact? In remembering where it all started. In its resolution of the new circular economy action plan, the EU Parliament has expressed its conviction that a circular economy is the way for the bloc to remain innovative and competitive in a global market, while decreasing its environmental footprint. Sustainable, circular, safe and non-toxic products and materials continue to be on track to become the norm in the EU market. The mobility sector being the first and most urgent pillar of a real economy roadmap shaped by an increasingly pressing regulatory agenda.
| Circularity Roadmaps Explained
If there is one aspect where the circular economy (CE) is far ahead any other sustainability-oriented area is that of innovation leapfrogging standardization efforts. For circularity practitioners, the international standardization of the circular economy calls attention to the work carried out in recent years by the ISO/TC 323, a Technical Committee (TC) of the ISO – International Organization for Standardization that aims to provide common standards for the field of circularity and, thus, facilitate global trade. After been launched in 2019, TC 323 counts on a global membership comprising 77 participating members and 22 observers (mostly, national organizations).
The national working groups supporting TC 323 have focused on detailing principles, terminology, providing guidance for implementation as circular business models unfold, identifying metrics to measure and quantify the CE (including the evaluation of a triple bottom-line perspective), and lastly, developing a product circularity data sheet that enables the digital exchange of data related to circularity characteristics of products across supply chains.
Notwithstanding the vigorous debate in the scientific literature, a package-ready solution seems to be near as the timeline for publication of ISO 59000 series (an actual package that would facilitate practical implementation of a CE) promises to stay on target for 2024.
| Investing in the Circular Economy
When asked about a prediction for circularity for the new year, one indoubtely jumps to mind: automakers will sprint in the direction of the circular economy in 2024. Why? Because if automakers aspire to become mobility providers of choice, all linear production will need a strong circular remake, and as such, the rethinking of their existing financial strategies to support near-term cashflow investments into serial and collaborative R&D. Take for example, Stellantis and the recent inauguration of its first Circular Economy Hub in Turin, Italy, where high-voltage EV battery remanufacturing, vehicle reconditioning and dismantling, among others, are set to begin with an investment of EUR 40 million to start off the 2024-2025 cycle, backed by a 2030 forecast of EUR 2 billion in revenues for its Circular Economy Business transformation.
Renault is also following suit. With its all circular business unit ‘The Future is NEUTRAL’ is on the run to respond to the changing regulatory environment in the EU by ramping up its efforts in the circular economy (specifically, as relates to end-of-life vehicles (ELVs) practices in compliance with its Extended Producer Responsibility under France’s Anti-Waste and Circular Economy Act).
Beyond the buzzwords, looking at the strategic selection of wording it can shed some more light on overall direction. Corporate communications are increasingly going through the comb of both anti-trust and greenwashing claims. We should expect a much stronger alignment between actual strategy orientation towards circularity and the respective company positioning. Circularity pays accrued dividends to early corporate innovators in the form of industrial strategies that can overcome several operational and procurement hurdles and are rarely implementable as a standalone. Once a company embarks in circular innovation, a cascade of solutions may easily unfold. The automotive industry seems to be next in line.
| As you prepare for the holiday season…
Before a much deserved pause for the holiday season, don’t forget that airport waiting times and train rides may offer some precious time to catch up with the work of fellow circularity participants in our global community.
Rest first, and get ready to discover, grow, and leave your mark!
〉 Going Circular: The Movie. A Grand Prix winner in the category “Documentaries” (Environment, Ecology, Sustainability) at the Cannes Corporate Media & TV Awards 2023, Going Circular is a documentary directed by Richard Dale and Nigel Walk that unlocks the secrets of the circular economy by daring to imagine a future where humankind flourishes by rethinking global paradigms, respecting the limits of our planetary resources, and transforming the modern world. Making these principles the model for human innovation serves as the starting point for this visionary approach. The now deceased independent scientist James Lovelock, biologist and science writer Janine Benyus, impact investor John Fullerton, and engineer and designer arthur huang offer us their invaluable perspectives.
〉 The Circular Economy Show Podcast. This award-winning podcast series from the Ellen MacArthur Foundation offers 133 episodes to choose from. To stay on the automotive theme, take a look at episode 130th released on November 30th 2023 and discover from Reuben Chorley how the team at JLR (Jaguar Land Rover) is giving a second life to electric batteries.
〉 Taiwan Business Case: Sustainable Aluminum. Contributed by SuperAlloy Industrial Co., Ltd. and reviewed by Circular Taiwan Network, this case study showcases SAI’s investment in its smelting plant in Pingtung, Taiwan to make its forged aluminum alloy wheels circular. Since 2020, SAI has been recycling 100% of its scraps to produce secondary aluminum billets for forged wheels production. The waste heat from the furnace in the smelting system is recycled and used as pre-treatment of drying the scraps.
〉 Japan Business Case: Circular Yokohama. Circular Yokohama is a regional circular economy platform led by Harch Inc. to accelerate the circular transition in Yokohama city. Through a series of circularity programs, it has been working with design partners such as Kanagawa University to address many local challenges, including climate disasters, aging and declining population, and social isolation among senior citizens.
Off to a well-deserved year-end break!
| All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.
