Momentum, Circular Economy and Trump

The Ellen Macarthur Foundation

In recent years, the Circular Economy model has grown with more businesses evaluating their existing model of the traditional “take, make and dispose” cycle. Many companies have developed new products and business models to eliminate waste and recycle or reuse everything they produce. A recent study by the EU commission cites that European businesses could save up to a further €600 billion and create 580,000 jobs by adopting circular economy.

Jumping on the opportunity, The Ellen Macarthur Foundation was set up in 2010 to “accelerate the transition to a circular economy”. The foundation was set up to connect disruptive innovations in circular economy with stakeholders across business, government and academia. Since its origination, the organisation has partnered up with the world’s largest corporations such as Google, Nike, Danone, Phillips, etc and has become a vital keystone in the circular ecosystem.

Despite all the economic and environmental upsides of shifting to circular business models, there seems to still be a lack of momentum in the space. Currently, only 6% of materials bought and consumed worldwide are recycled back into new products. Which possess the question whether the Ellen Macarthur Foundation could expand their focus to something that may generate more momentum. Firstly, I must acknowledge that I completely agree with the company’s approach to highlight business and economic benefits of the circular model for key decision makers. Without value as a driving factor, the incentives for companies to change their supply models would be limited and would face greater resistance.

Even with the incentives, there is still significant resistance that can be explained by many factors such as psychology of humans to avoid change, company culture, change implementation, external resistance from partners or suppliers, and so on. And we must acknowledge that making a real change takes a lot of upfront investment, planning and momentum. To illustrate the amount of active cooperation required for a circular initiative, we take Herman Miller as example. In January 2001, they decided to active make a change to create the first Cradle to Cradle (C2C) chair. To ensure success, a multifunctional coalition formed including decision makers from design, manufacturing, supply chain, sales and marketing departments as well as external experts that founded the concept C2C. The project ran for over a year with the multiple stakeholders and the company launched the new sustainable chair, the Mirra chair at the end of 2002.

It could be argued that companies do not need to focus on going from “zero to hero” like Herman Miller, and that they can take gradual steps towards circular model. And, the Ellen Macarthur Foundation has definitely taken the correct approach by aligning stakeholder incentives and KPI’s to encourage higher adoption. This step is completely necessary, but I wanted to pose the question of what more could be done to generate the momentum required for decision makers to actively take the steps towards a circular model. A strong movement in research and innovation can be observed in recent years, and the incentives for decision makers are becoming more obvious, yet there still seems to be a lack of momentum in adoption.

How Donald Trump could benefit Circular Economy

Recently, an enormous amount of public and press backlash has been centred around Donald Trump’s withdrawal from the Paris climate agreement. CEO’s of large companies, such as Elon Musk, have publicly denounced their partnerships with Trump and begun highlighting the important of climate change and pledging to sustainability goals. Regardless of whether this is just a cheap PR opportunity, the net effect of the media attention is that public awareness about sustainability has escalated exponentially. The growing public awareness could build momentum for circular economy in a multitude of ways. First, the passionate managers that previously faced resistance to their sustainable proposals may now be able to gain buy-in for their initiatives. Second, as result of pressure from customer demand, companies may be forced to also jump on the ”sustainability band wagon” as a result of competitor actions. And lastly, the general elevated awareness has generated momentum that could lead to other unforeseen progress for circular economy.

This recent development could be both a risk or a potential opportunity for the Ellen Macarthur Foundation. A risk is that since corporations are getting a large amount of media attention from their responses to Trump, the may launch their own initiatives and forgo a partnership with the Foundation (which hasn’t appeared in the media at all following this Trump controversy). Alternatively, the increased awareness may also play in favour of the Foundation as more businesses recognise the need for a circular model. A lesson from all this is that the Ellen Macarthur Foundation could take is that they could strongly benefit from gaining an awareness in the customer. Perhaps in a way similar to how Intel used their “Intel Inside” campaign to completely dominate the market, the Foundation could start by creating demand in the customers to drive business actions. After all, most successful companies will cater to their customers’ needs.

Currently, the Foundation is in a great position to leverage their network and ecosystem in order to achieve higher customer awareness. For example, their established network that entails the world’s largest corporations as partner companies, the most renowned innovation firms such as IDEO, and government and academia experts. What if they tapped into this resource to go beyond business innovation partnerships but also entail a marketing element?

There’s a plethora of strategies they could take to extend the Foundation’s presence and beliefs to the mass audience. For example, a spokesperson should be assigned for the Foundation that can generate buzz, momentum and take advantage of opportunities such as the Trump incident. Other methods may include distributing their existing teaching materials, that are already easy to understand, through government channels that promote sustainability and helping partner companies create content that promotes their circular products whilst highlighting the benefits to the environment. These are just some simple initial ideas, but the message is that, an additional step the Foundation could take in their goal to “accelerate the transition to a circular economy”, is to extend their efforts into marketing to increase the awareness of the masses.