Meet the Circular Change Makers in Europe

March 2019, Brussels saw the affluence of hundreds of professionals from Europe for the Circular Economy Stakeholders Conference 2019. About 350 circular economy practitioners and enablers met during two intensive days to confront their ideas and jot down the blueprint for the 2030 European Circular Agenda.

Indeed, the past 150 years of our linear economy, typically the referring modus operandi since the industrial revolution, consisted primarily in sourcing, producing, consuming, and throwing products we no longer want. The main problem is that our planet’s resources and raw material are finite and do no longer cope with our extensive consumption model. Circular Economy flips the linear model by designing out waste, keeping materials and products in active use and regenerating natural systems, therefore allowing businesses to consider growth by disconnecting it from our ecosystem's finite and limited resources.

Where Linear Economy said "Take - Make - Dispose", Circular Economy says "Reuse - Repair - Recycling".

“From Waste to Wealth.” “From Ego to Eco.” or what we like to call the ‘3W’: Win for the planet, Win for business prosperity, Win for the consumer.

Now going back to the Stakeholder Conference, a joint initiative by the European Commission and the European Economic and Social Committee,  REVOLVE Consulting, first consulting boutique in Armenia[1]specialized in alternative business models, was invited to participated in the active discussions with all european stakeholders in the field. Here we are, standing right in front of the impressive European Commission’s building, excited to represent Armenia, and meet all those shapers and positive change-makers.

While we were expecting mainly to meet late-career professionals, we were taken by surprise when we saw the long queue of young peers, early to mid-career professionals, and for us the message was clear and promising: Circular Economy will be the economy of tomorrow and it will be led and leveraged by younger generations of European citizens, conscious of the urgency for radical model change and proactive in their respective fields to set the new economic standards of Europe.  

The conference started with the opening remarks of Frans Timmermans, First Vice President of the European Commission:

“We need to rewrite the social contract of our European societies, in respect with the values of Circular Economy and do so at all levels of our societies’ bodies if we want to see a systemic shift of paradigm and pave the way for global change. We must have the audacity to [implement our circular projects] in a holistic way.”

“A record of rapidity” added Daniel Calleja Crespo – Director General for the Environment in the European Commission. Luca Jahier, president of the European Economic and Social Committee, who stressed the cost-saving opportunity of Circular Economy, supported the remark[2]. Hence, a potential cut of USD 600 billion per year[3], which actually represent 12% of Europe Total Economy. 

The first panel discussion that followed “Circular Economy Action Plan: a solid foundation for our present and future” took a deep dive into the current state of the affair and the challenges we are immediately facing of. For Joss Blériot, Executive Director at the Ellen McArthur Foundation, the issue is two-fold: we need to deal better with what is in the consumer pipe, but that goes hand in hand in thinking through what we put in the pipe in the first instance. Indeed the question of circular economy is undetachable of new design applications and that applies in priority to the food and textile, Construction, Urban logistic sectors. Hence the importance of putting a strong focus in enhancing education and skills in Design Material Sciences cross Europe. Leading this new emphasis on new education, the Netherlands have for a couple of years opted for an Open Science approach, meaning the researchers in circular innovations and new applied designs are mainly funded by the public authorities. Panelists also highlighted the lack of access to finance for circular practitioners and entrepreneurs.

As in circular business models, although the reduction of cost is significant, the Return on Investment (ROI) is relatively low as products are no longer solicited to be owned but to see their performance being leased instead, therefore decreasing the cash inflow.  So while the seeds for CEAP’s foundations are sound and clear, all panelists agreed that significant effort needed to be generalized by the European Commission in acting as a catalyst funding partner for Research and Innovations across actors in Europe. The context for the action plan laid out, the discussion followed with various circular Industry Network managers, who act as a key pivot for circularity in their respective fields, whether they are in science, agrotech or digital innovation. The question here was how we can move towards circular industry value creation networks, however, it organically moved towards how to create a value network rather than a value chain. Indeed the primary challenge in the current circular stakeholder landscape is that players in the value chain do not know what other players/enablers are doing.

While communication efficiency will require significant improvement in the near future, all panelists urged the requirement to have a solid and concise business case that will show the immediate benefit to shifting from a linear business model to a circular one. 

“Smallholders and farmers are the most important stakeholders to lead the chemical industry circular shift. [..] For that to operate we need to invest effort and time in converting consumer mindsets. Tackle the general lack of understanding of what circular economy entails at their own scale and the general lack of Trust towards new economic models spearheaded by public and private partnerships” said Roberto Ferrigno, CEO at Novamont. 

Adding to that insights, Guido Lena, Director Sustainable Development at SMEUnited, stressed that the lack of immediate structured value chain in circular economy puts a strain in the business model switch from linear to circular. Especially as the upfront cost to set up circularity whether through machinery or other innovative mechanisms is quite important and unfortunately the current lending officer in banks and financial institutions are not trained in valorizing the business value to risk of circular business models; therefore, very often Circular ventures or projects face drastic NO! from banks’ business credit allocation departments.

We know so far that the European Commission acting as the ultimate network of networks for European practitioners is fully conscious of the role it has to play to spearhead a circular Europe, and that operating industry pivot platforms can only do so much without tackling the pressing challenges highlighted above. And that starts by building up business cases to boost the momentum. However no business case exists without robust financial assessment so where does that stand as per Circular Economy in Europe, Revolve took active participation in a working session that highlighted “Financial Enablers for the Transition”, led by high-profile experts[4]. Frido Kraanen, PGGM, pointed out that with Asians purchasing power being 500% that of Europeans, Europeans are being out consumed in the current linear model, “Either we get circular or we don’t get to the Paris’ Agreement. For Frido Kraneen, also co-author of the European Commission latest Report « Accelerating the Transition to the Circular Economy: Improving access to finance for circular economy projects », 3 axis have to be developed in the short-term for financial literacy:

  1. Taxonomy on Circular Economy

  2. Technical Assistance

  3. Redirecting the incentives (towards public procurement)

In connection with the parallel that was made on the “Global Alliance for banking Values – GABV”[5], Frido Kraneen and Sandrine Dixson-Declève, Climate KIC, emphasized to the audience that in this case, "we don’t need to invent a circular fund, but instead invest in Circular Economy knowledge acquisition for Banks’ front deck professionals”. Of course, the key question of consumers’ incentives was also discussed as demand will be led primarily by consumer’s conversion to circular practices, his involvement is vital in scaling up circular initiatives over linear ones, and exit the current inertia operated by linear value chain on our consumer behavior.

The second day of the conference took place at the European Economic and Social Committee and consisted in tailored workshops for a restricted set of practitioners and intermediaries, so to provide more intimate opportunities to engage amongst stakeholders and translate the discussion into a room for collaboration on specific projects. The key rationale of Day 2, was to allow to connect the relationships’ dots laid out the day before on niche topics like “Strategies in Circular Economies at a European level” or “Bio-circular village: a recipe for rural prosperity”, to name a few.

All in all this 3rd edition of the Circular Economy Stakeholder Conference met entirely its mission from our point of view: European matchmaking platform for Circular Economy aficionados and professionals in order to promote proactively this necessary and imminent paradigm shift with a concrete and tailored action plan and leverage bridges for collaborations for European grassroots circular leaders.

Not necessary to mention how much of a big honor it was for REVOLVE Consulting, to join such a paramount discussion with such seasoned experts and like-minded peers. As Ladeja Godina Kosir, Director of Circular Change said:

“let’s shift from battlefield to playground.”

For us, those two-days were indeed in contrast to traditional summits or forums as it really was a playground for creative and inspired exchanges that we know will convert into noticeable social, economic and environmental impacts for our future generation as we CANNOT not Emerge from this Emergency!

To conclude, we would like to leave you with the following thought in echo from President John Kennedy's Rice Stadium Moon speech (September 1962): “[…] [Circular Economy] is an unprecedented challenge; A challenge we’re not ready to postpone; But it’s a challenge we will win together”.

Tatev and Emma Petrossian

[1] Armenia is part of the Associated list of European Countries.

[2] Circular Economy represents actually 12% of Total European Economy – source: Environment European Council

[3] Source: Ellen McArthur Foundation “Towards The Circular Economy” report vol.1  

[4] Jonas Byström – EIB, and Guy Thiran – Eurométaux. They all collaborated as a focus group in publishing « Accelerating the Transition to the Circular Economy: Improving access to finance for circular economy projects »

[5] The Global Alliance for Banking Value (GABV) is an independent global network of 54 financial institutions and banks, with the purpose of promoting a positive, inclusive and viable alternative to the current financial system.