Picture: @Groningen, Eugénie Joltreau
The CMCC team is currently developing an online tool aimed at businesses and anyone interested in understanding what actions companies can take to boost the circular economy and reduce resource use. The development of the tool will be guided by the theme “from a micro to a macro circular economy.”
For “micro” circular economy researchers will present a non-exhaustive database of circular strategies companies have adopted, highlighting their challenges and opportunities. While under “macro” circular economy, CMCC researchers will translate the findings of the CircEUlar project for a general audience, explicitly outlining the conditions under which actions taken at the company level can lead to a macroeconomic reduction in resource use.
In addition, the CircEUlar tool will present the challenges and opportunities of circular strategies through quotes gathered during the stakeholder workshop held on the 17th of September in Groningen. During the session dedicated to businesses, 18 participants—including four local and national politicians, three business support organizations, and representatives from five companies of various sizes—shared their expertise and experiences in implementing circular strategies with the researchers present. This exchange resulted in a database of more than 50 categorized quotations, highlighting critical issues that stakeholders face.
In particular, a central theme that emerged was the importance of the value chain, specifically the coordination between upstream and downstream players. Implementing a circular business model requires addressing multiple layers: “You have to approach not only the whole product, but also the whole value chain, and also, the whole organization making it“. Participants noted that “it’s a system problem“ . One participant emphasized that control over the value chain significantly impacts the sustainability potential: “They can be the most sustainable because they own the whole value chain“. However, understanding the broader business environment remains challenging: “You simply don’t know what individual companies are doing and how their output can fit into [the] business processes of other companies“ .
In addition, transforming a business model or product isn’t solely dependent on the external environment. The company’s internal culture and the values of its workforce play a crucial role: “Don’t start with the technology; start with the culture in the company“. Equally important is the alignment and collaboration across various departments, in particular for the design process. As one participant explained, “The way we changed the company at the time was, design was of course managed by designers, but the decisions about every aspect of the design was made by every part of the company: sales, procurement, production” .
Regarding consumer demand, its impact appears to be truly mixed. On the one hand, stakeholders appeared to think that “sustainability is unpopular“ among consumers, notably when it lacks price competitiveness: “[For] 95 [%] of the people the circular economy, sustainability, is not a priority. The price is a priority“ . Additionally, unpopularity may stem from perception issues. Some companies prefer not to advertise the circularity of their products: “You just incorporate the recycled material without promoting it“ . On the other hand, demand for circular products is perceived as growing: “I see it growing, that’s the good news”. Interestingly, for others, circular features serve as a key selling point, prompting companies to design products with a deliberately aged appearance: “What people thought about it was [that it was] too nice, you couldn’t see it was recycled, they think okay, so now they are adding granulate rubber pieces so it looks like it’s old“ .
In line with this, companies highlighted the challenge of remaining competitive. For instance, recycling seems to struggle with costs: “Our [recycling] process costs almost as much as virgin material“ and about virgin materials that “it’s cheaper than recycling. So, they know what they get [and] cheaper than waste“. In addition, refurbishment was said to face image-related hurdles. One participant noted, “Businesses don’t want to burn their fingers on refurbishment. They want better, they want new“.
Finally, producers highlighted the role of policies in fostering the circular economy, particularly in creating price incentives: “If there’s no policy, then it will always be price driven“. They emphasized the support provided by local governments: “In the north of Holland, the government is quite helpful to the circular economy“ . However, one participant stressed that European regulations primarily influence long-term investments: “I have an investment horizon of 10-12 years. I don’t look at the Dutch government for that, so I look [at] what is going on at the European level to make a decision to invest.“
The CircEUlar online tool is currently being designed, and these citations will provide insight into practical challenges and thematic trends, offering a resource for both researchers and practitioners. Instead, the more theoretical part of the online tool will focus on raising awareness and developing an understanding of the rebound effect, an unexpected effect stemming from circular actions that can reduce their effectiveness or even lead to an increase in resource use in extreme cases. The tool will present the market conditions and policies favoring a ‘macro circular economy’, i.e., a society using fewer resources.
By Eugénie Joltreau – RFF-CMCC European Institute on Economics and the Environment (EIEE), Fondazione Centro Euromediterraneo sui Cambiamenti Climatici (CMCC)