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 6th edition of Circular Week, an EU educational campaign on the circular economy, is starting today in Warsaw, Poland. This week will feature a series of seminars, networking events, workshops, and webinars with focus on a different area of the circular economy. Some may question the value of hosting educational campaigns during global crises, but the recent work of a multi-disciplinary team of researchers in Kharkiv, Ukraine reminds us of the subtle difference between readiness and willingness when it comes to changing behavioral norms and habits. A time of global crises can actually serve as the catalyst for building a culture of sustainable development, circular production, and consumption. After all, investors have already shown interest in circular assets as longer-term, inflation-resilient options.
| The science of impact
It takes tremendous focus and courage to build educational campaigns in times of global crises. Taking a multidisciplinary approach to earth and environmental sciences, starting in early 2021, researchers from Simon Kuznets Kharkiv National University of Economics and affiliated academic hubs in Ukraine and Lithuania, investigated the relevance of transitioning to circularity during times influenced by global crises. In their work (published in 2023), they stress the fact that crisis situations can help give impetus to finding effective ways out of them, restoring economic, environmental and social balance. The representative conditions of global crises they analyzed in the Kharkiv region of Ukraine, include:
· Political instability (life threatening)
· Economic crisis
· High corruption
· Intense migration
· Education crisis
· Existing ecological condition of territory
While life threatening, political instability and a wide-scale economic crisis are ranked as the most challenging scenarios, nurturing an environmental and socio-economic consciousness emerges as key to lay the foundation for a more specialized labor market to support the circular economy.
Through digital surveys, the researchers highlighted the relevance of going beyond simple awareness of environmental behaviors, to also account for the willingness to change the norms of behavior and habits that guides individual consumer decisions as determinant of success in a transition to circularity. Let’s take a simple assessment of individual readiness to sort garbage that they ran. The results of the social survey show a basic lack of willingness to participate in the garbage sorting process.
In their words “to move to a circular model of the economy, society must develop values, norms, patterns of behavior, skills, experiences related to a culture of sustainable development, environmental protection, and the reproduction of resources.”
In this context, the concept of circular economy can be thought of as a new stage in the evolution of a sustainable development toolkit guided by education of consumers and the general public. In particular, they highlight how new learning technologies and other organizational tools can help speed up the level of maturity of a specialized circular workforce. Among others, (i) the development of incubators for circularity; (ii) the availability of special circular economy training programs, and (iii) the introduction of gamification in the analysis of products, processes, and business models that promise to yield a circular future.
| Circularity roadmaps explained
Behavioral roadmaps are a useful tool that governments and industry bodies are increasingly deploying to achieve a circular system, mindful of the multi-disciplinary nature of this task. The case of Australia offers us come clues.
The Behavioural Roadmap to Circular Consumption, developed by Monash University‘s BehaviourWorks Australia, outlines strategies for policy-makers and industry to intervene in the production-consumption cycle. The goal is to bring about change, reduce the country’s material footprint (a measure of raw material extraction used to meet the economy’s final demand), and promote the efficient use of limited resources.
A behavioral roadmap outlines the connections between consumers and their behaviors, as well as other stakeholders like designers, producers, importers, retailers, service providers, government, and the civil sector. This helps to better understand the relationships and influences within the system. The roadmap can also delve into these connections further to develop or review public policies that promote more responsible consumption patterns and reduce Australia’s material footprint.
As a result of the behavioral mapping exercise, three key areas of intervention have emerged as the highest potential to speed up a circular transformation of production and consumption value chains in Australia:
- Borrow/rent item or service: Focus new behavior change efforts on enabling and encouraging consumers, individually and as a group, to borrow or rent items instead of buying.
- Source item second-hand: Continue and expand behavior change efforts to mainstream ‘buying second-hand instead of new’ for individual consumers; and explore scalable practices for groups of consumers.
- Buy items built to last: Ensure retail products are built to last, through minimum design/import standards; then include ‘built to last’ into sustainable and circular procurement policies of corporate buyers.
| Investing in the Circular Economy
Investors are turning their attention beyond traditional renewable energy sources as rising inflation and supply chain bottlenecks impact profit margins and a clean-energy only transition story, according to a recent Bloomberg News article.
John Goldstein, global head of sustainability and impact solutions for Goldman Sachs Asset Management and wealth management, points to companies that mitigate the effects of inflation by promoting a more efficient use of resources. In a nutshell, circular economy plays. Goldstein acknowledges that inflation has presented challenges to conventional renewables sectors, leading to a focus on waste and materials themes.
A view on that is largely confirmed by Morningstar data regarding the mutual fund industry. Overall, fund families alone have already built up exposure to the circular economy theme by a factor of more than 300 over the past five years. Circularity strategies now count 25 funds overseeing more than US$6 billion in total, according to Morningstar.
Circularity assets are increasingly core holdings for decarbonization-focused investors and energy transition portfolios.
| You don’t want to miss this week
From the British and Netherlands Embassies to City Hall, Warsaw is the place to be this week. It offers new opportunities to connect with fellow practitioners of circularity, both in person and through hybrid mode, for one of the most notable week-long series of events dedicated to the Circular Economy in Europe.
Discover, grow and leave your mark!
〉October 24th: Circular Bioeconomy Day (Warsaw, Poland). Part of Circular Week 2023, this event aims to share knowledge on bio-based solutions and the concept of circular transformation in the food sector. Participants will have the opportunity to learn about the EU and national circular bioeconomy strategies, with Agnieszka Sznyk PhD from Instytut Innowacji i Odpowiedzialnego Rozwoju INNOWO moderating the discussion. Ewa Rzeszowska from EIT Food will provide introductory remarks on pioneering projects that transform waste into valuable resources. Another topic of discussion will be the industrial symbiosis of biowaste and biomass as a source of energy, moderated by Michal Siwek, from the BNP Paribas AgriHub.
〉October 25th: Mazovia Circular Congress 2023 (hybrid and in person in Warsaw, Poland). One of the largest conferences dedicated to the circular economy and sustainable development in the EU, the event focuses on raising awareness and triggering behavioral change and consumer engagement in the circular transition. Key topics for this year’s debates include the impact of ESG (Environmental, Social, and Governance) reporting and EU regulations, incentive schemes such as deposit return systems, the role of entrepreneurs in circular transformation, and the impact of digitization and bioengineering on sustainable development.
〉October 27th: Future of the Textile Industry (Netherlands Embassy, Warsaw). The roundtable event on the 5th day of Circular Week 2023 will focus on the textile industry. The conversation will highlight the risks associated with the industry’s linear approach, which depletes resources and harms the environment. It will also cover innovative strategies like recycling, upcycling, and the use of eco-friendly materials, all aimed at reducing waste and the industry’s carbon footprint. Notable participants include Agnieszka Wąsowska-Telęga, Member of the Board, Fashion Revolution Polska; Ewa Polkowska, Co-Founder, Sustainable Fashion Institute; and Katarzyna Mikołajczyk, General Director of the Polish Red Cross (Polski Czerwony Krzyż).
Off to another impactful week!
| about
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.
