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.
The annual gathering of the World Economic Forum in Davos is fast approaching. This year’s theme, Rebuilding Trust, offers an opportunity to ‘restore collective agency, and reinforce the fundamental principles of transparency, consistency and accountability among leaders’. Easier said than done as our world continues to struggle on virtually all fronts. And if embracing uncertainty was the key takeaway from last year’s gathering, this year’s dialogue may finally get us to a more actionable stance. That of the Latin verb ‘resolve‘. Resolutely moving forward amid the divides that our world, our teams, our organizations are all facing to a certain degree.
When in Davos this year, let’s be on the lookout for early signs of institutional trust and accountability. They often come with humility and openness to diverse, at times diverging, perspectives. Circular economy professionals are well aware of this.
| The Science of Impact
How to be impactful by embracing resolve as a compass for strategic decisions? In my experience designing and funding innovations, it inevitably means that a select number of failures along the way will lead to value co-creation. One notable example is that of Teijin Limited, a Japanese technology-driven group offering advanced solutions in the fields of environmental safety, security and disaster mitigation, and health. Only a handful of practitioners in the financial services industry will remember the company’s long history as Japan’s first rayon manufacturer in 1918, to the large organizational structure of a chemicals holding company today, encompassing 170 subsidiaries across 20 countries. Starting two decades ago, Teijin’s sustainability transformation was routed in its attempt to make chemical recycling* – the conversion of waste into raw materials through chemical synthesis – core to its operations, with a focus on building large-scale plants in China. Both attempts failed.
According to Akimoto Uchikawa, Teijin’s President and CEO, in his keynote at the Fujitsu ActivateNow technology summit in 2022, ‘We learned that demonstrating value is crucial’. The circularity roadmap developed by Teijin has led to prioritize their ability to build trust among ecosystem participants – from OEMs to customers, and suppliers – where reliable information flows are accessible timely by all, and visualization of economic and environmental value created at each step is core to growing and maintaining trust in the network.
| Circularity Roadmaps Explained
How can business roadmaps and organizational strategies that embrace the circular economy build trust? As all sustainability-oriented initiatives that aim at strengthening the adaptive capacity of organizations, relying on standards and conformity assessments. In other words, through assurance at the product, process and organizational level, that specified needs or expectations are met. For example, when durable goods are brought to the market at a higher price than competing offerings, their promise of longevity must be believable. Through a user-centric lens, carrying out conformity assessment activities along the value chain attests to the credibility of all technical cycles leading to the final good being offered in the marketplace.
Similarly, having clear knowledge of the supply chain and the natural resource consumption of each product becomes every day more valuable as it enables the effective recovery of materials and nutrients that would be wasted otherwise.
Beyond external validation, the process of preparing for conformity assessments can build internal buy-in for circular businesses and provide a benchmark for internal risk management and audit best practices. Think for example of the plausibility of claims of recyclability or reparability; of low emission transport along supply chains and the evaluation of transport as a service; including demonstrating that a supply chain management system is actually effective.
| Investing in the Circular Economy
A structural driver rather than a cyclical trend. That’s how to team at M&G Investments has labeled the circular economy in their annual investment perspectives review.
Other drivers?
Innovation (AI). Decarbonization (Low-Carbon Economy). Infrastructure.
As macroeconomic uncertainty persists, the investment teams at the UK asset manager express a positive view on themes that are most likely to attract long-term capital, and remain somewhat shielded from short-term market volatility. Vishal Purohit, CFA and Amy C., in the firm’s Impact and Private Equity team, argue that the structural support to circularity assets comes from both a boost on the legislation and the innovation front, and the scale-up of circular solutions to close the loop in conservation of natural resources and biodiversity needs.
| You don’t want to miss this week
From Douglasville (USA) to Davos Platz (Switzerland), this week offers new opportunities to plan ahead, connect with fellow circularity practitioners, and stir our world towards a more sustainable economic transition.
Discover, grow and leave your mark!
〉January 11th: CircularPSP: Circular Economy Transition in Cities | Tender Launch (webinar). This info session introduces the tender for an AI/ change solutions platform enabling Circular Economy solutions for cities. Eight leading CE-cities (including CircularBerlin and ReLondon) have developed this tender jointly reflecting the challenges they share and consider to be on the critical path towards a wide-scale and systemic uptake of circular economy principles. Add-on tender application training events will include a technical webinar on January 18th, and an Administrative and Financial session on January 25th. Credit to CircularPSP, Georg Vogt and team for designing the tender and for providing all relevant training to navigate the application process.
〉January 15h – 19th: Connecting the World with Trust at the Fujitsu Uvance House (Davos Platz, Switzerland). When in Davos, don’t miss the chance to discover the technology helping organizations close the sustainability gap and boost economic prosperity in a digital society while also contributing to solving global environmental issues and improving peoples’ well-being. The team at Fujitsu will engage in a series of insightful discussions at the Fujitsu Uvance House during World Economic Forum week. Notable guests include, among others, Martin Wezowski (Chief Futurist, SAP) and Kumardev Chatterjee (Finland National Government Advisory Board). Special thank you to Taeko Yamamoto and the leadership team at Fujitsu for organizing this important forum. *Note: The Fujitsu Uvance House is located on Promenade 73.
〉February 7th*: Industry 4.0 and Circularity/Sustainability Update (Douglasville, GA, USA). Hosted by Rick Walker and the Georgia Automotive Manufacturers Association, this in-person industry update will bring to life principles of the circular economy and practices of sustainable business management through the lens of automotive OEMs and innovators with specific focus on supply chain readiness. Notable practitioners will discuss how to navigate digital disruption and governance best practices, including: Knudt Flor (former CEO and President of BMW Manufacturing Co., LLC); Rick Oppedisano(CEO, Delta Bravo AI); and Olivier Brauen (Michelin). *Registration closes on February 2nd.
Off to another impactful week!
| brief bio
Alessia Falsarone is executive in residence, practitioner faculty at the University of Chicago, where she leads the Circular Economy and Sustainable Business program. The article is based on the author’s newsletter A Week of Circularity from the innovation knowledge hub.
| 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.
