How circular is your business? Five critical factors to consider
Five critical success factors to becoming circular - learnings from Circularity, an agency at the frontline of transformation
On Jan 31st 2021, Aotearoa’s Climate Change Commission (CCC), released its much-anticipated landmark report on how to decarbonise our economy. As a crown entity, it is their job to provide independent, evidence-based advice for the government to help Aotearoa transition to a climate-resilient economy.
New Zealand’s share of global GHG emissions is small, but our gross emissions per person are relatively high. It’s been reported that since 1990, net greenhouse gas emissions have risen by nearly 60 per cent, with gross emissions increasing by 24 per cent. We have recently been called out by commentators, including Greta Thunberg, for ‘virtue signalling.’ This report from the CCC acknowledges that -
“Aotearoa will not meet its targets without strong and decisive action, now.”
After 12 months of considered analysis, the Commission’s draft advice sets out an achievable blueprint for New Zealand to become a prosperous, low-emissions economy. The report demonstrates that we have the tools we need to achieve our target, but calls on all of us to accelerate action.
The CCC highlights that we need to rethink and change how we move, what we make and how we produce it. We also need to reconsider what we buy, what we do with what we use, and how we can reuse more of what is leftover.
“In our vision of the future, Aotearoa has a circular economy and generates very little waste” - Climate Commission's draft advice.
Yes, it’s about cleaning up the waste left at the end of a long squiggly line of consumption, but equally, it’s about designing innovative solutions that ensure we don’t create it in the first place. Meeting our needs in new ways, with less waste and with processes and materials that naturally generate fewer emissions. For instance, if we shifted to a 'products as services' circular business model across electronics, we would never own another fridge, phone or toaster. Instead, we would pay for the use of these items and they would be maintained, recovered, repaired and reused in perpetuity. These models exist already, we just need to scale their adoption into the New Zealand economy.
The Ellen Macarthur Foundation calculated that 45% of global emissions come from how we make and use products, and how we produce our food.
via Ellen MacArthur Foundation
The value of the circular economy is worth up to $4.5 trillion by 2030- a large and profitable opportunity that will be realised by the companies who engage in the redesign of their products, materials and business models to become circular. This is why the Circular Economy is a central pillar of the European Green Deal to build back better, across every industry, and why, as of 2020, 62% of US companies plan to shift to a circular model, with 16% of companies already embedding circular principles into their businesses. We are seeing technology giants like Apple, Amazon and Walmart employ circular strategists and brands such as Nike, Mud Jeans (and the list goes on...) deploy circular strategies across their operations.
If Aotearoa is able to unlock the circular opportunity, we will reduce our reliance on imported raw materials/products, as we’ll have recovered them for reuse already or 'make' them ourselves through waste mining. Equally, we can generate new export opportunities through the realisation of waste to value, particularly from our primary industries. After all, there is no waste in nature so nor should there be if we are operating in the biosphere.
So, how might we radically redesign the economy of Aotearoa, to waste less, reduce emissions and create more value?
Achieving a vision that shifts us from linear to circular ways of operating won’t be easy. As a nation, we face some unique challenges with our geographical makeup and limited infrastructure. But we can focus on building capability that puts the theory into action, and incentives that encourage the valuable shift away from the status quo.
Right now, we have the opportunity to shape the policy needed to transition from extractive production and consumption models to circular systems, products and services through CCC’s open consultation with all New Zealanders.
As a circular transformation agency, Circularity works closely with organisations and changemakers to redesign business as usual. Together, our vision for Aotearoa is a circular economy with more regenerative ways of working, living and creating. A future in which we design out waste, keep materials in flow, and continuously regenerate our living and human systems. To make this transformation from linear to circular possible, we enable businesses to explore, imagine and implement circular strategies at the very heart of their operations.
It’s with this bold action of our ambitious industry leaders and shapers, that we will scale change across New Zealand’s supply chains, industries and customers. We are already seeing that it is possible to move quickly and at scale — but not if you try to go it alone or work in silos. Collaborative ways of working and growing are central to accelerating our circular economy.
Over the last three years, we have worked across everything from ski hills, to construction, personal care, aquaculture, food and fashion. We have learnt a few critical success factors for any brand, organisation, city or business to become circular. We brought these insights together when we designed and delivered XLabs, New Zealand’s first circular economy lab, in partnership with Auckland Unlimited.
You can read the opening speech from XLabs here.
Today, we are sharing five critical success factors below, in the hope that we might inspire your business to 'go circular' as part of your efforts to reduce emissions, no matter how challenging it might seem at first.
How might you shift your business to become circular?
What are the critical success factors to achieve circular transformation?
Move beyond denial. Lead from the front. Be honest about the impact of your entire operations, your products and your influence.
“We need our leaders to lead. This is an occasion where the nature of leadership is to draw a path, to reassure people about the options that lie ahead, to create both the sense of urgent action but also the sense of a better world” - Rod Carr, CCC Chair
Utilising the Forum for the Futures six steps to significant change we start by experiencing the need for change and diagnosing the system challenge.
All our projects start with a kick-off session involving an exercise we designed, called ‘Map the System.’ By working with cross-functional teams and partners, we quickly identify the key activities, impacts, resource flows and stakeholders at every stage of your operations. From sourcing to manufacturing, retail and end of life. Providing an holistic overview of your entire business that uncovers key areas where you can lead. Asking the questions worth asking. You may be surprised by the knowledge and intent for solving these challenges that already exist within your organisation or supply chain. We gather data across a range of sources and use what we have to keep moving forward towards solutions.
Watch this video to see how Advance Floating Platforms used the Map the System exercise to uncover a new opportunity for their business.
“Who are businesses really responsible to? Their customers? Shareholders? Employees? We would argue that it’s none of the above. Fundamentally, businesses are responsible for their resource base. Without a healthy environment there are no shareholders, no employees, no customers and no business." — Yvon Chouinard, Founder Patagonia.
2. Define the role you want to play + create a vision that will unite everyone behind it.
Using your ‘system map,’ we start to articulate potential roles a business can play in tackling the environmental impacts in their ecosystem. Bringing together cross-functional teams and stakeholders in the process to create what we like to call the coalition of the willing. Your staff, your customers and your stakeholders. We tap into what really matters to them, to define a vision and start to galvanise action behind the challenges that need solving.
Louise Nash and Mikayla Plaw start to Map the System for PGL Group
"I want to be able to reflect and say that we’ve continued to help the New Zealand building industry in a really positive way – to reduce our waste to landfill, to innovate better ways, and to have upheld our social responsibility. We have the ability to initiate change where many others cannot, we can create progress that makes it accessible for more.” - Mikayla Plaw, GM Organisational Development & Sustainability APL/PGL.
3. Explore how circular practices can solve your challenges and unlock innovation.
In 2018, for a Masters of Technological Futures, Louise Nash—the founder of Circularity, created a ‘design-led innovation toolbox,’ with a goal of reducing the environmental impact of business as usual by unlocking the value potential of the circular economy for any business or brand. At the heart of this toolbox, is our six Circular by Design methods, which were developed from over 250 interviews with leading circular experts around the world, and were drawn from over 1000 case studies of circular innovations from startups, community groups and large multinationals. These methods bring together science, technology and human behaviour in new ways to unlock mindsets and generate impactful innovation.
Read more about the circular by design methods here.
“Working with Circularity we were able to take a step back, assess our current status and look at ways to innovate and improve. A great facilitator with excellent knowledge of the circular economy and the various ways to approach problems or opportunities from a circular perspective. I have no doubt that the spark created from this day will help shift ecostore into its next innovation.” - Pablo Kraus, CEO, Ecostore
4. Use design thinking to co-design, iterate, prototype new circular products, services and systems with your customers, stakeholders and experts.
This is not just a ‘workshop’ where people toss ideas around. This is an intentional process to deeply understand, build empathy and design your way around a problem by learning and testing ideas. Engaging with experts, understanding the root of the problem and asking ‘why’ at every turn. Creating prototypes and testing with your machinery, your staff, wider experts as well as your end customers. Consider the impact and opportunity across a full lifecycle from sourcing, to manufacturing, transportations, retail and recovery/reuse. Invite feedback from unlikely partners. This is a process, that when done right, will stir up more questions than answers. That’s a good thing. We use the learnings and keep going. The innovative solutions are waiting for us, the aha moment will be there. Trust the process. It’s why the Ellen Macarthur Foundation brought on design heavyweight IDEO to develop the circular design guide. It’s also why we were asked to design and deliver XLabs by Auckland Unlimited in 2020. Using a design sprint format we worked with 18 organisations and 50 collaborators to ideate, prototype and pitch 12 circular ideas over a period of nine weeks - in and out of lockdown. If we hadn’t shaped this program around a design sprint, we would have taken at least a year to cover the ground we did. Read more and register your interest to be part of the next XLabs here.
5. Bring the science together with storytelling to inspire action.
Human beings are driven by our hearts, not our heads. We make decisions using emotions. By bringing together the creative power of storytelling, we can effectively share the science behind climate change, the changes we need to make and why. We need to connect the impacts with the actions needed and we need businesses to share these messages with their audiences in more compelling ways. There is a significant role for brands to effectively and accurately engage people with the issues and opportunities at hand.
Here are some of our favourite circular economy examples of storytelling at its best:
Maggie Marilyn goes seasonless for circularity
The original Worn Wear initiative by Patagonia
At Circularity, we feel very fortunate to have the opportunity to work with leading organisations to help them design a better way. Together, we have the opportunity to radically redesign our economy and future by helping businesses everywhere and anywhere, to become circular. The paths we take now will become roadmaps for our future. Drawing from the wisdom of te ao Māori — Ma mua ka kite a muri, ma muri ka ora a mua.
Those who lead give sight to those who follow, those who follow, give life to those who lead.
The steps we take will provide a secure footing for those who follow. Our success in meeting Aotearoa's emissions targets lies in the potential of all of us, together.
We hope you will join us.
How is your organisation planning to transition to the circular economy as part of your emission reductions?
Feel free to contact us for a free introductory session to explore the opportunity for your business.
Circularity, helping business design a better way.
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