SILLA CORONA - “FOR A CIRCULAR ECONOMY, CORPORATE TRANSPARENCY AND COLLABORATION ARE ESSENTIAL,” DR. ANTHONY HALOG

May 23, 2016

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Published in 2016

The modern industrialized world is founded on an unsustainable economy: industries extract natural resources, manufacturers process them into products that retailers sell, consumers use them and ultimately produce trash. Developing and implementing an alternative system is the biggest challenge to mankind. So is there a solution?

Circular economy has become one of the viable alternatives to today’s linear ‘take-make-dispose’ model. It aims to close the material loops by promoting recycle, reuse and remanufacture of goods at the end-of-life. It proposes a ‘value circle’ wherein technical and biological materials flow continuously to rebuild capital, whether it is financial, manufactured, human, social or natural.

Professor Anthony Halog from the University of Queensland, Australia, is a leading researcher in this field. After the Silla Corona Seminar last Tuesday at Universidad de los Andes School of Management, Dr. Halog answered a few questions about the challenges of putting circular economies into practice.

What are some of the specific tools of circular economy that today’s corporations can use?

Life Cycle Assessment is one of the useful tools to evaluate environmental impacts associated with all the stages of a product’s life. It helps businesses to identify hot spots across the supply chain in terms of environmental impacts. Carbon and water footprint are particularly useful indicators to represent total greenhouse gas emissions and water consumption throughout the entire life cycle. But the adoption from the business community is slow.

Why is it slow?

Because if they use the tools of industrial ecology they will have to disclose information (even internal and confidential information) and the researchers or general public may see how dirty these companies are. Companies usually respond with the argument that the information may be used against them. That mentality is part of the status quo. They are hesitant. We need to keep working to make them see that these tools will help their companies become more sustainable.

What type of information is most difficult to get from the companies?

Information about the emissions (e.g., greenhouse gas emissions or the generation of hazardous waste) is perhaps the most difficult one. Some companies don’t like to use the carbon footprint tool. In sustainability reports they tend to focus on presenting the number of jobs they have created or other forms of social responsibility initiatives. But in exploring and implementing environmental management strategies (e.g., renewable energy options, eco-design), it is essential to quantify emissions in addition to the use of raw materials. 

Does a shift towards circular economies start within the corporate world, or does it require top down government policies first?

Both approaches are needed. You cannot rely only on the government. There must be an internal motivation. Big companies can choose to work with environmentally responsible suppliers, for example, and that can facilitate changes in the suppliers. But we will also need governments to take a part because circular economies require a holistic systems change.

Do you think the goals agreed on at the COP 21 meeting in Paris are adequate?

If you look at big international conferences such as COP 21, you’ll see that many of the goals are not reached after five or ten years.  To implement circular economies, proactive policies will need to be pushed forward with determinate political will based on solid scientific evidence. We need more participation of scientists and engineers in governments and policy decision-making.

You mentioned that the biggest challenge is changing the current mindset of business people. What other challenges are there?

To develop strategies to move toward circular economies, it often requires data and information that have not been collected. This would need the investment in time and resources to change the operating system to collect data and statistics. At the company level, it would also be needed to restructure the production processes based on complete analysis and the use of industrial ecology tools. Companies seem to be doing well economically and they may be implementing corporate social responsibility strategies, but that is not enough.

Why not?

Circular economy involves the entire life cycle and value chain and therefore it involves collaboration of various stakeholders including producers, customers, and government. It requires a whole-of-systems perspective. If we look at strategies just within a company, it is not sufficient. We need to extend the model to a higher level and collaboration would be crucial to make a higher-level systems change.

 

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