Earlier this month, a group of business leaders gathered in Seattle to envision what a circular economy would look like. Circularity 23 focused on everything from plastics to composting to recycling. GreenBiz also introduced its newest cohort of Emerging Leaders, members of the next generation of Black, Indigenous and people of color (BIPOC) leaders in the circular economy.
As we embark on the mission to create a new model of an economy, we are looking to the next generation to truly upend the business world and create new business practices. So GreenBiz asked these leaders: What do you see as the largest obstacle to corporate circularity strategies, and how would you overcome it?
Many outlined the need to put people over profit and focus on environmental justice alongside the developments in a circular economy. Dive into their more detailed answers below.
Rukiya Abdulle, University of Toronto and Transport Canada
Corporate circularity strategies are indeed elaborate and ambitious. However, a central component that I’ve yet to see strongly incorporated is the environmental justice component. It is not enough to simply promote circularity through costly research and development, innovative product design and deliberate procurement. I’d like to see how entities are leveraging supplier diversity. How are corporations supporting smaller market players’ equivalent form of development and participation in the circular economy? Ultimately, how are entities ensuring the future of the circular economy is not leaving anyone behind? How are social investments reflective of these elaborate circular goals and strategies?
Echoing one of the pillars of U.N.’s Decade of Action, we need to mobilize everyone, everywhere. We cannot strive for circularity if the progress is at the cost of economically marginalized groups that are already facing disproportionate economic, environmental and social disadvantages.
Nevertheless, I would urge corporations to turn to their community trailblazers because there are mighty NGOs that have the data and impact strategies readily available. As the Banner sisters movingly conveyed to Circularity 23 attendees, we need to do better, and I am looking forward to seeing that.
Grant Amlani, U.S. Plastics Pact
I see one of the biggest obstacles in a transition to a circular economy is the accessibility and scale of circularity strategies. In this just transition, we (including the corporate sector) must be careful not to perpetuate the inequities that exist within a linear economy. It was insightful learning more about environmental justice implications when considering circularity, including around recycling processes and barriers to participation (e.g., geographical, financial, language). Being from the southern U.S., this is particularly important as there is much catching up to do toward achieving an improved level of access and scale when compared to cities like Seattle. As part of grad school, I studied climate-smart inclusive economic development and currently work on environmental justice related to a circular economy for plastics, and one of the most important factors is participation of all parties in this just transition — from the decision-making process to investments in innovative solutions.
From the corporate perspective, this includes listening to local communities and acting to address their needs and wants, as well as making sure that diverse perspectives exist in the innovation process. It is exciting to see the work being done on reuse programs, while also thinking critically about those and other solutions (like recycling and composting), what implications exist for those solutions, and improvements needed to be made. At the end of the day, it is people who are making and using our products, and it is people who receive both the benefits and burdens associated with those actions.
Dakota Batch, Ralph Lauren
In the dynamic landscape of the textile and apparel sector, it’s crucial for companies to proactively invest in and champion innovations that drive circularity. Merely waiting for external entities, such as venture capitalists, to fund transformative startups is not enough. We must demonstrate our commitment by taking responsibility and allocating resources to the cause. By engaging in joint development projects, we can not only offer valuable insights into cutting-edge innovations but also provide access to our well-established supply chains. This collaboration bridges the gap, enabling emerging ventures to leverage the expertise, infrastructure and networks that might have been previously out of reach. It is through these concerted efforts and shared goals that we can collectively shape the future of our industry, foster sustainable practices and pave the way for a truly circular economy.
Chris Chacko, Boston Consulting Group
Three main areas I’d identify as obstacles to corporate circularity strategies today would be generational priorities, philosophy and operational changes. Generational priorities refer to a lack of prioritization and understanding of the urgency of the climate crisis by our current leaders, continuing to treat climate change as an equal to less important topics of interest. However, there is currently a massive generational shift occurring, one which will require us to transition responsibilities to new leaders who are not afraid to prioritize climate and sustainability on a corporate level and place a heavier emphasis on climate-friendly business models that create impact.
Philosophy refers to a current emphasis on individualism in the business world, often seen by ideologies such as “profit by any means” or the race to solve climate change, as if any one person could solve the climate crisis. By adopting a more collectivist approach — understanding and emphasizing the communities that make up our planet, the need for and benefits of collaboration, and how each of us can play a role in helping to alleviate and solve climate issues — we can change the narrative and role of corporates to be one which protects our planet instead of depletes it.
Everyone knows the saying “if it isn’t broke, don’t fix it” and unfortunately, the definition of “broken” is not always outlined in supply chain terms, but in our case, ecological terms. Operational changes and achieving stakeholder buy-in are one of the most significant obstacles to enabling circularity strategies, but new business models, climate-focused incentives and impact capital can all provide a push for climate-friendly economics that benefit people, profit and the planet.
Jamaica Gayle, Plant Based Products Council
The challenge of aligning circularity with the bottom line is likely a foundation of many corporate discussions as they consider developing circularity strategies. One of the biggest concerns I’ve heard is the cost of transitioning to circular models — from R&D investments to infrastructure — there are some additional upfront costs. Traditional petroleum-based plastics have reaped the benefits of decades of market domination, technological advances and subsidies.
On the other hand, as an emerging industry, alternatives like biobased products made from renewable feedstocks have not had the same economic benefits. While public policy is critical in helping level the playing field for more circular solutions like this, corporations can address some of the bottom-line considerations by positioning circularity as a tool to drive competitiveness, accelerate growth and mitigate risk. Integrating circularity into innovation, responding to consumer demand, cultivating partnerships and investing in new circular technologies is a great place to start.
Tais Idi-Infante, Yale School of the Environment
I feel that the biggest obstacle to corporate circularity is the emphasis on profit. Due to our linear economy, curving into a circular economy may be initially a bit costly, negatively impacting the profit of companies. But we need to put planet over profit. In terms of companies that do take strides to make circular decisions, I think marketing and making consumers aware of these changes will be challenging but also very important for business success. The everyday consumer is smart, and many are aware and receptive to the idea of climate change; therefore making planet-focused decisions can be taken as making consumer-focused decisions. Simply put, if we destroy our planet, there will be no business to be done.
Kofi Sarkodie, Soka University of America
The largest obstacle is the shift in attitude from a linear to a circular approach, both from the consumer and producer perspectives. Charles Kettering says, “A problem well stated is half solved.” And I also believe that a solution well stated is half sold. Circularity is a difficult concept that requires a variety of ideas and views to apply. However, a lack of diversity in understanding hinders progress. Limited representation from different backgrounds and perspectives leads to a restricted comprehension of the circular economy’s principles and benefits. To overcome this, it is crucial to encourage a diverse range of voices and perspectives to foster a more comprehensive understanding of circularity. The definition of the problem is critical, and if this is not done adequately, sufficient solutions are not articulated to consumers. Because of the intricacies, it is difficult for everyone to shift their mindset and embrace a transition away from a linear economy that they are already accustomed to and comfortable with. However, these challenges can be overcome through education, collaboration and a concerted effort to raise awareness.
Suraya Souidi, The Climate Pledge
It will be impossible to deliver on meaningful long-term strategies alone. Partnerships with companies, public sector organizations and local communities are key to understanding the management of competing priorities. Through continued collaboration on material initiatives, companies can lift up one another and enjoy the consequential economic and environmental benefits. Moreover, by considering all stakeholders in a collaborative setting, companies will listen and learn from communities who are most negatively impacted by the linear economy.