Until a few years ago the adoption by companies of circular economy business models was seen solely as costs, but now it is clear that it is a source of revenues and key to having a competitive advantage in the market and reducing risks.
1. Why does the topic of the circular economy have to be on the agenda of every company? Why is it worthwhile?
Companies have to embrace the circular economy because it is not only an economic model to manage the current environmental crisis but a new paradigm that brings new opportunities to industries and people.
Until a few years ago the adoption by companies of circular economy business models was seen solely as costs, but now it is clear that it is a source of revenues and key to having a competitive advantage in the market and reducing risks. By decoupling growth from the use of scarce resources, companies protect themselves from rising and volatile commodity prices, become more resilient to sudden changes in the supply chain, and reduce their environmental footprint in the value chain from production to sales. The importance assumed by the circular economy for companies is now also confirmed at European level by the Circular Economy Action Plan and the draft of the Corporate Sustainable Reporting Directive that should enter into force from next year.
2. What are the biggest challenges?
One of the biggest challenges is inertia, which leads organizations to continue to do things the same way as they have been done. Therefore, change management initiatives need to be implemented to help organizations change established habits that have been reinforced over time. For organizational change to take place, the first lever are its people, and therefore it is essential to enact change management initiatives at all levels, starting from management. Managers need to be involved in recognizing the new opportunities and to promote new ways of working and to manage problems and conflicts that can ensue when change is proposed.
3. How would you convince people who are still critical towards the topic?
The best way to convince companies is by speaking their language and by providing successful case studies, showing that circular business models are now not only environmentally sustainable, but also create economic value. These concrete examples are the best way to convince skeptics.
4. A thought-leader, book, or podcast you would recommend?
I would absolutely recommend reading Net Positive. In Net Positive, Unilever's former CEO Paul Polman and sustainability expert Andrew S. Winston reflect on decades of corporate experience and argue that companies can prosper by giving more than they take. Taking a net positive approach means going beyond mere business operations and being able to generate value for the entire community, as well as for the planet itself, because that is the only way for organizations to maintain their license to operate.
5. What are the key requirements for the circular economy to succeed and eventually become standard?
For the circular economy to be successful, it is essential that companies and governments are able to assess their circular performance, as only “what is measured matters” and starts the improvement journey. They must therefore implement measurement processes along the value chain, using metrics that provide accurate information and report the environmental and economic benefits of the circular approach. As circularity will affect the main internal and external business practices, another key element is the Circular Economy Manager, a professional figure with transversal skills, capable of restructuring the entire company apparatus, working in synergy with the other managers to renew their roles from a circular perspective.
CIRCULAZE, an initiative launched by business network CURAZE, was started to connect pioneers in sustainable business management and thought leaders to form a network together with the most relevant start- and scale-ups in the field of the Circular Economy. The goal of the community is to establish a powerful ecosystem, to exchange good practices, and inspire each other on the path to even more sustainable companies. Our motto: Can't Do It Alone.
CIRCULAZE is made possible through the friendly support of our amazing co-host dfv Mediengruppe and partners DB Cargo, ODDO BHF, Otto Krahn New Business, Knauf, Capgemini Invent, 4P Capital, Jokey, SBC Hamburg, Payback, Fressnapf, and von Beust & Partner.
Learn more about CIRCULAZE here.
