Circular Econ Awards Q4: Consumerism, Obsolescence & Circular Economy?

Consumption and production are complex issues which have many causal factors that are influencing and depending on each other. This makes it often difficult to identify the real underlying issues and problems. In order for people’s and company’s behavior and thinking to change, we need to have a paradigm shift away from traditional, well established thinking patterns and ideas, towards newer, more environmental friendly ones. The underlying problems and motivators need to be identified and addressed. For example, it is currently still more profitable for many companies to produce new goods, rather than setting up a circular economy model. Also, for many items consumers currently seem to be unwilling to adopt a circular economy model since they still very much need to have the feeling that they “own” something. Due to the complexity and size of the issues, our understanding of these is constantly evolving, and today’s solutions seem to be obsolete tomorrow. Take the example of electric cars: a study by the Norwegian University of Science and Technology in the Journal of Industrial Ecology, entitled "Comparative environmental life cycle assessment of conventional and electric vehicles”, states that electric vehicles are actually more toxic than traditional vehicles, and that the overall CO2 reduction benefits of electric vehicles are actually not clear. Also, the production of many goods is usually ignored, while the production phase can be a large contributor to the overall CO2 emission of a product. As the electricity consumption (and consequently the CO2 emissions) in the usage phase of products is reduced, the CO2 emission of the production phase actually increases in significance. They way we consume and how we produce things needs to be addressed on several layers: international, national, local and individual. Only then can there be a real and lasting change. Of course, we will make mistakes along the way, but this is the only way to force change on all actors and make the transition towards a more environmentally sustainable society.

8y

Rod Clare

Creating shared value and shared responsibility across the full life cycle of products and services is key to breaking the obsolescence cycle. Better design for reuse and recycling will accelerate this. For example, it is currently very easy to recycle car bodies but not their internal fittings (textiles, rubber, plastics, copper wires etc.). These are collectively recovered as unwanted shredder floc - 400,000 tonnes is landfilled every year in Australia costing many $millions. Sustainability Advantage and the University of NSW are currently collaborating through a Green Manufacturing Hub to use the plastic, rubber and fibre components from shredder floc as re-engineered composites, recover the metals and glass using green chemistry and reform the residuals into metallurgical carbon for steel making. In a brave new world, particularly with current focus on lighter and more durable vehicles, perhaps it will be a better environmental, economic and social outcome to keep cars on the road longer and replace or renew their interior fittings? Sustainability Advantage is a finalist in the Cities and Regions category of the Circulars.

8y

Scott O'Connell

With rapid innovation cycles in the technology sector, we expect the pace of product refreshes to continue to stay relatively short in the near term. Additionally, sometimes hanging on to older products may not make environmental sense given advances in energy efficiency and productivity. The key will be making it easier for customers to turn this former waste stream into an industrial input – and critical to that will be the ways that products are designed. Dell has pioneered a Design for Recyclability (DFR) approach to ensure that new products strive for modularity, clear labeling of parts, minimal use of glues or adhesives and convenient disassembly guides to support the intention that product components and plastics be reusable or recyclable. Our sustainable approach to design was recognized with ISRI’s 2014 Design for Recycling Award. Dell also received a 96% recyclability rate for our tablets and ultrabooks (per independent assessment with the IEC 62635 standard) and received a 9 out of 10 score from IFIXT for ease of recyclability of our XPS 10 tablet, making it the most recyclable tablet amongst its industry peers.

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8y

Peter Lacy

Thanks to all of you who contributed on this round. I found the inputs by far the most insightful. There are some really powerful learnings and examples in here. I may speak to the team about whether we can 'aggregate' the comments over the 5 days into some kind of write up or summary which you guys could view and sign off on. Feels like there's a lot of richness here that could benefit others and be shared through the WEF, YGL and other communities as well as to those engaged in The Circulars Awards. Comments on format or the idea always welcome. Next and final question posted.

8y

John Gardner

To move towards a low carbon, resource efficient world manufacturers and designers need to be much more progressive on the use of materials and in particular the end of life process. End-of-life timing varies for every product, but as the producers of those products, it’s our job to know when that is and to have a plan for how to mitigate the impact on our environment and landfills. For beverage cans, end-of-life is less than 60 days. For tablets and smart phones, 1-2 years, and often less. For cars, about 15 years. For buildings and construction, 30 years or more on average. All of these are made with aluminum, and all are infinitely recyclable if they’re returned back into the system. Knowing these timelines, we can put measures in place according to each product, and at Novelis, we have. We are now the world’s largest recycler of aluminium a big part of which is used beverage cans, turning old cans back into new in as little as 60 days. In October 2014 we opened the world’s largest and most technologically advanced aluminum recycling center, located in Nachterstedt, Germany. With the investments made in this new facility, we’re now able to separate and recycle more types of scrap than ever before possible. Today, Novelis is the world’s largest recycler of aluminum overall. We believe all manufacturers should be taking circular economy principles into account in a similar way and investing in thinking and partnerships to fully maximise materials at the end-of-life processes that will enable old to become new again.

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8y

Peter Lacy

To start with on high embedded value products. But over time we will be able to accurately gauge end of life with real time precision. That will open up many additional opportunities. Good progress already being made by some in 'product passports'.

8y

Peter Lacy

I agree on the end of life timing John. We've seen that is a key capability. What I would also add is that the technology curve in areas like sensors coupled with other digital technologies and analytics means that we will be able to get much more specific about that.

8y

Christian Lanng

Understanding consumer behavior - look at car sharing, apartment swapping. These are new consumer behaviors that have sprung up in recent years. The notion that we as producers/manufacturers or we as consumers are LOCKED into anything is a falsehood. Innovation, forward-thinking ideas and the Circular principles themselves - when manifested into products and policy - break the cycle. Manufacturers that offer managed services and desired outcomes to customers will gain more market share and win over competitors who think that customers should continue to own products that are doomed for obsolescence. The circular economy breaks this cycle by registering the changes in consumer behavior and providing the frameworks so that manufactures can respond. That means retooling supply chains as networks, not as a collection of single companies. And choreographing the movement between materials and goods. Below are considerations for creating a circular supply chain: 1. Outputs become inputs because your goods don’t end their life with their customers, but become an input in your supply chain. This means your accounts payable and accounts receivable processes will form a loop instead of a straight line. 2. Without a digital supply chain, it will be almost impossible to coordinate all the moving parts a circular supply chain requires in real time. 3. Assess your suppliers and work with the top tier for a common vision and goals towards a circular supply chain and ensure your CSR standards are met as you assess reuse opportunities 4. Figure out the cash flow demands of a circular supply chain, compared to a linear one. Your margins might improve, but your suppliers’ need for cash may change 5. Make a plan to manage the soft components like all the evidence, materials, production information and components for the entire lifecycle. Given the changing consumer, business, and government attitudes toward consumption and the environment, the circular economy looks poised to make businesses operate smarter and more collaboratively – while discovering new sources of profit and a competitive advantage by re-designing supply chains.

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8y

Peter Lacy

Could literally not have made my 'circular value is customer innovation' point better Christian! Your quote is spot on - "The circular economy breaks this cycle by registering the changes in consumer behavior and providing the frameworks so that manufactures can respond"

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8y

Gregory V Jaros

The public sector and private sector can jointly drive the creation of a model in which recycling of products (not just of waste) is encouraged and easy to do. The smartphone market is a great example. People in higher economic tiers will always want the best new phone every 12-18 months, but there is a huge sector that doesn’t have access to or can’t afford the newest gadgets. The circular economy can support this. But to get mass participation it has to be as easy as possible. If it is a hassle for the consumer, they will just throw out that old phone, or TV or dishwasher instead of trying to figure out how to get it to someone who can make use of it. A two-sided, hyper-local network of consumers and businesses that have demand for the old product is needed. But it must be an almost effortless transaction for the original item owner, or provide a financial (or goodwill) return to compensate for the inconvenience of ‘recycling’ that old item. Collaborative tools like Spare to Share make it easy to give away those unwanted items to people nearby, as well as share or rent them. Technology (mobile, images, bar code scanning, push notifications, etc.) make it very easy to list items within a closed, trusted, hyper-local network.

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8y

Peter Lacy

That's a really interesting angle. I hadn't considered the point about democratising certain products and categories by making them affordable to more people. Slight tangent... but I think there is a lot more to be done to clarify the 'social' case around Circular Economy. Both positive and negative. With any kind of step shift in efficiency we have historically seen big winners and losers. That will happen here too. I think that's an area ripe for the picking...

8y

Chris Hoskin

Anette Timmer-Larsen I agree with your comments. Have you seen this? http://www.huffingtonpost.co.uk/nick-liddell/marketing_b_5649877.html

8y

Anette Timmer-Larsen

Personally, I think we should marshal the creative brains in advertising and marketing. We all know that the so-called ‘Mad Men’ of Madison Avenue did much to create the yearning for material things we all consider normal today and the branding that underpins the desire for the next new thing. This has been further boosted by cheaper and cheaper products, encouraging people to throw away and buy something new on a regular basis. The same brains could reinvent what matters, what sets people apart, and what is considered cool. The sharing economy has already started to switch people’s thinking; why build a new hotel when people can book through Airbnb for example? People enjoy the smart new way of finding a place to stay and don’t feel a lower status in not using a hotel. So this trend can be intensified: it should be cool to buy the best and most durable things, repair, reuse, keep things going and so on. That is a mindshift and many people are ready for it.

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8y

Iris van Wanrooij

An old, linear system which has caused many problems (e.g. people no longer know what they are buying in this throw-away culture, and a tremendous amount of waste) can never be the foundation for a new way of working. The vicious cycle you refer to is a result of the linear economy, so this may not be an opportunity for solutions within the circular economy. In the fashion industry, there is a lot of fast fashion (volatile fashion that follows the latest trends and styles) that focuses on product obsolescence. On the bright side, the consumer demand for fashion that lasts is something that is emerging in the recent years and that is developing further. More and more consumers want to return to the real core of fashion, as true fashion is timeless. For more information about this growing group of conscious consumers, we would like to refer to the Cultural Creatives (http://en.wikipedia.org/wiki/The_Cultural_Creatives). The circular economy makes products from durable, better materials, and the designs are as such that fast fashion can be transcended. In order to achieve this, the focus should be on the quality of materials and on timeless designs. Only under those conditions, we can develop leasing and recycling models for garments. We, as a brand or as producers, cannot impose these principles on the fashion manufacturers. However, the more demand there is for the consumer, the more durable products are made by the manufacturers. So, the only thing we can do to help breaking the vicious cycle is to make durable, circular products and thereby create demand. In the end, the vicious cycle has to be interrupted by consumers who think about their consumer behaviour and who are willing to change their behaviour.

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8y

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Circular Econ Awards Q4: Consumerism, Obsolescence & Circular Economy?

Peter Lacy

Accenture Global Sustainability Services Lead; Chief Responsibility Officer, Global Mgmt Committee Member, plus Non-Exec at AeroFarms & WEF YGL…

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