Resource catches up with Stephen Gee, Director of the Resource Event, and discussses how businesses can bring about the circular economy.

The circular economy means different things to different people, what do you think are the key features of the concept?

For me, the circular economy is about bringing together a number of environmental schools of thought into a single, holistic and economically-viable model for sustaining our planet and the people who live on it.

The combination of cradle-to-cradle, performance economy, industrial ecology and biomimicry – along with a system-based economy where there is no waste, where materials flow in loops, and where energy is provided exclusively from renewable sources – sounds good right, why wouldn’t you want to be part of it?

These ideas have been around for a while, why do you think they are becoming more popular and pervasive now?

There a number of factors all aligning to drive a need for change: rising commodity prices; increases in demand; more environmentally-aware consumers and organisations like the Ellen MacArthur Foundation, World economic Forum and ourselves (Resource Event) all shouting loudly about the business opportunities that a circular economy offers, and, conversely, the risks and difficulties that the current linear model presents.

For me circular economy is to sustainability what Dyson is to the vacuum cleaner.

For materials to flow through different phases, it takes a holistic approach. What do you think we need to make people aware of all stages in a products life?

I think this is where some of the complexity comes into the model of the circular economy, as I believe there are different levels of understanding needed dependant on the product/service and the consumer.

I would suggest that there need to be two different strategies: one for corporate clients and one for consumers.

Corporate customers are more likely to understand the full cycle of materials and understand the full benefits of creating supply cycles instead of chains.

Consumers/householders will be more difficult to engage and it’s my personal belief that industry needs to find models and solutions that rely on minimal decision making from consumers. We have seen with recycling the difficulties to engage all audiences on simple messages of segregated collection of materials in the home. I

Industry will need to develop models that return materials to the manufacturer, and tools like extended producer responsibility and deposit schemes are examples of this already in practice. Could you imagine leasing your packaging? Or getting a discount for returning your discarded products? It’s something that’s already infiltrated our high streets and we will see more of this from the retailers.

Give us an example of ‘circular thinking’ that really illustrates the concept

For me the example that best encapsulates circular economy is the Rolls Royce ‘power by the hour’ example, where they provide hours of flight (service) instead of directly selling airplane engines. It’s a well-known example, however it’s a true example of business model innovation and focuses on the service of a product, thus ensuring the resource efficiency and sustainability of the business in the long term.

For me, this is a great example because it was driven by innovation and market forces and not by legislation. It demonstrates that a circular economy is profitable and achievable now, it just takes leadership, and a real understanding of supply loops and customers.

The UK Government has asked industry to show leadership when it comes to waste resources. Do you think industry is stepping up to the plate?

In short, yes. The market forces surrounding climate change, increasing population and increasing numbers of middle class consumers globally have already started to impact on large organisations, and so it’s understandable that we have seen some of these begin to embrace circularity. You only have to walk into Resource Event to see organisations that are taking the lead, like Jaguar, DS Smith, M&S, SITA UK, Unilever and Veolia, for example.

There are also rafts of small disruptive businesses launching into this space, providing an enabling element to the circular economy and creating markets that didn’t exist before – companies like bio-bean, Innoverne, and Warp It are examples of these.

Do you think government needs to do more to support this shift in culture?

Yes, of course. However, the government needs only to set the direction of travel. It’s important that they set the direction and not just the ‘route map towards the circular economy’, as too many legislative influences could stifle innovation and competition across sectors right when the great competition for resources begins (over the next 10 years).

While in Davos recently, I spoke with Bill McDonough, the thought-leader on design for the circular economy, on this very topic, and he believes that currently no policy drivers are needed for circular economy to establish. While I tend to agree with him, a friendly, positive nudge from the Department for Environment, Food & Rural Affairs (Defra) and the Department of Business, Innovation & Skills (BIS) would always be welcome here in the UK.

Which industries/sectors do you think are delivering real progress in delivering circular economy ideals?

Many different sectors are already embracing circular economy thinking, and really looking at the viability of their current business models, understanding resource risk and price volatility, but also looking for the customer benefit in providing services over products.

One of the sectors leading the way on circular economy is manufacturing. They have the best visibility of the supply chain and are also most at risk to the challenges a resource constraint world presents – thus having more imminent need to embrace change.

Some of the best examples can be found in the manufacturing sectors, particularly those products that require high capital expenditure up front, for example cars, planes, heavy plant, etc. The economics of service over ownership is very attractive right now to both consumer and manufacturer (provider).

We are also seeing real uptake in the software and online sector. IT is a real enabler to the circular economy as a number of the major hurdles in embracing circularity are found in measuring and understanding where materials are and how best to connect them and move them to where they are needed. This is something IT and Big Data are really enabling – think Uber, ZipCar, Innoverne, Warp It, Airbnb etc.

In your view, what are the steps all business – big and small - should be taking to embrace circular economy?

Placing circular economy at the heart of business strategy can be transformational for an organisation. This could start with simple steps like looking at waste produced, moving to life cycle analysis (LCA) of products and services to understand waste, material risks, and materials substitution. But most importantly, business should be finding opportunities to change their business models; can their product be leased/reused/disassembled/remanufactured? Can waste been minimised? Etc

Business can explore these opportunities further at Resource Event in March.

Register for the Resource Event here for free.

Stephen Gee is a circular economy pioneer and co-founder of Resource Event, the first large -scale conference and exhibition for the circular economy.

Resource Event is a free to attend event held in March at London’s ExCeL centre, attracting over 11,000+ professionals to learn, network and find solutions to be resource efficient and adopt circular economy business models.

Find out more about the Resource Event.