Ep. 49 | A Week of Circularity: From politics to policies

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.

How will upcoming elections impact the circular economy?  This year, fifty nations will hold elections, which could test the strength even of the most robust democratic systems.

While circularity as a framework that involves systemic change and broad participation of stakeholders may be perceived as limited to progressive policies and backed by progressive governments, it is intimately connected with landmark climate policies already underway in many global economies and aligned with industrial plans to digitalize and upskill global labor market.

Ultimately, commitments to the circular economy can be made by any political party. The economic and competitive disadvantage that comes from the lack of progress will likely be visible this decade already, not the next.

| The science of impact

Electoral accountability is often thought of as the stick yard affecting the economic policy choices that follow a general election. The transition to a circular framework of production and consumption entails a set of standards and norms for the expansion of circular procurement, budget spending in support of eco-industrial parks and to advance resource efficiency, backing for initiatives at the municipal level such as urban mining, tax incentives for more durable products throughout their life-cycle, transparent waste trading standards, plus re-skilling and awareness building facilitation.

For example, during the UK General Election of 2019, the debate was mainly focused on Brexit and the National Health Service. Although parties did not often use the term ‘circularity’ directly, their manifestos included policies related to circular economy principles, including ‘right to repair’ initiatives, single-use plastics bans and the introduction of carbon taxes.

| Circularity roadmaps explained

One policy roadmap worth reflecting on is the development of circular trading platforms to facilitate the pickup in demand for secondary materials rather than virgin resources as production inputs. If the demand for secondary materials is not regulated, it could put significant pressure in resource markets increasing transactions on individual components at a faster speed than efforts to sort and monitor availability and characteristics of secondary materials could possibly accommodate. The market for electronic equipment remanufacturing provides us some early warning signs as nearly two-thirds of electronics are lost when waste streams get directed to uncoordinated channels.

The introduction of virtual platforms for circular trading provide a basis for producers to collaborate, interact with customers during the consumption stage, and connect with buyers and other partners in the disposal stage. An added benefit is the ability to better organize reverse logistics processes so to identify, retrieve and collect the highest quality secondary materials.

Yet, early efforts led by government agencies to create such platforms have produced mixed results. France’s government-funded Quaero, a search engine, was unable to achieve long-term viability in part because it was unable to compete with Google. The Netherlands piloted Circle Market, a virtual platform for connecting post-production, pre-consumer, and post-consumer excess materials to reuse and recycling markets in the textile sector, has relied on government support for a private-sector led effort through a combination of favorable tax schemes and fund-matching programs.

| Investing in the circular economy

Private sector innovation has quickly picked up where efforts such as those by Quaero and Circle Market left behind. One such example is the early-stage growth platform Seenons. Based in Amsterdam, Seenons has built out a virtual platform supported by 200+ partners and handling 100+ secondary materials streams, connecting 5 countries and 3,000+ locations. The company has benefited from a EUR 10 million investment round in 2023 backed by investors of the caliber of Swiss Post and Shamrock Ventures. More to come as commercial partners globally join the network. In the words of Seenons co-founder and CEO, Joost Kamermans, ‘In 4 years, Seenons has grown from an innovative idea to an international company with more than 75 employees and can call itself Europe’s leading circular platform.’

One more example of the power and efficacy of innovation financing. Even more so, as Joost reflects on the current shared global challenges, where ‘climate change, resource depletion and geopolitical tensions call for greater strategic autonomy’.

In a year of elections, let’s not forget how with innovation financing directly benefiting emerging technologies and facilitating circular economy transitions, it can also be a lever of geopolitical influence and strategic autonomy for entire regions. Private investors will likely continue to monitor this closely.

Off to another impactful week!