Accelerating a circular economy – can it deliver for climate and the economy?

To explore this topic, I joined a panel currently working at the forefront of the circular economy at the 16th Climate Change & Business Conference.

I was completely blown away by how many people joined us, the room was packed, with some valuable soundbites captured by the likes of Alec Tang , and participating companies. There were also lots of great questions from many climate action leaders across Aotearoa, New Zealand in the audience.

In fact, we had so much engagement that we ran fifteen minutes over and into lunch. Alana Douglas of Sustainable Business Council NZ , had to almost physically remove us from the stage!

Given this interest, I wanted to share this kōrero with our wider community here on LinkedIn.

Bring on any more questions, anytime.

So let's get into it...

When I caught up prior with the other panellists, we agreed that we didn’t want to get lost in the theory of a circular economy, especially given we were all practitioners across design, measurement, certification and training programmes.

The reality is the majority of our economy is linear, so the wider climate action community has much to learn about the circular economy in practice. We have a handful of businesses demonstrating real leadership: investing in training, solutions, dedicated circular economy roles and setting targets but most are at the beginning of their journey.

So we wanted to share stories of real-world examples of how businesses can live and breathe the circular economy, what good looks like and also what is at risk if we don’t make the shift from linear to circular.

Jim Goddin kicked off the session by setting the scene for our audience with research from MBIE , that Aotearoa’s economy today isn’t very circular.

• Only 8% of our waste was diverted from landfill in 2019, half of which was exported.
• There is a wide range of circular economy opportunities for New Zealand: resource-efficient buildings and infrastructure, sustainable agriculture, and critical materials.
• The initial assessment identified savings of between 1.5 and 1.8 megatonnes of CO2e annually, with longer-term savings potentially reaching ten times that amount.

Laura Gemmell shared the risks to New Zealand businesses if they don’t pursue a circular economy strategy -

• A total depletion of natural resources through continued mining virgin and waste materials entering the environment.
• Skyrocketing costs of goods and materials as critical materials and natural resources become scarce.
• Brand damage to companies and NZ Inc./ lack of market access as buyers shift away from those who cause harm and regulators enforce trade restrictions.

More from Laura here .

Always a great speaker, Rui Peng of Critical. shared his journey of unlocking the demand for beautiful, practical building materials for his recycled ‘Cleanstone’ products with Ecochoice certification which meets Green Building standards. It really felt like Critical was finally making the headway it deserved.

In light of New Zealand's recent release of a critical materials list , how do we create 100 more circular material companies rather than our current focus on enabling more extraction?

I shared the risk of businesses not pursuing a circular economy strategy -

If a business continues to rely on selling/purchasing/using extracted, non-renewable, virgin resources, including things like water, the costs will go up in line with quality and scarcity, and when you go to sell those goods around the world there will be penalties for the degradation caused.

But that is not the real business risk.

The real risk is that nature is so degraded, and becomes so scarce in supply you can no longer draw from it commercially or otherwise. Consider not only nature's materials that you use but also the living systems you depend upon in your operations, localities and processes such as growing food and even things like roads for access.

But there are almost endless opportunities to become more resilient, profitable and be a good ancestor if you make the shift to circular economies, particularly for those in the primary food and fibre sectors…

Shifting to circular cycles of nutrients from what we grow, free of pollutants and fossil fuel derivatives, upcycling your 'waste' streams into valuable ingredients to replace costly virgin inputs for your supply chain and other industries, reusing water collected from rain rather than drawing from our rivers which we share with other species, reducing our reliance on imports like fertilisers - reducing this risk…..with flow on benefits like improving soil and biodiversity health, not just for one growing season but many, improving competitive advantage in global markets who demand this approach through regulation. It also drives more local, equitable and valuable solutions to reduce our reliance on global supply chains for critical materials.

We really do have everything we need if we just know where to look!

Some of the questions we were asked -

What about Temu?

Thank you Gerri Ward for your question

We have to make circular economy solutions utterly desirable and as convenient as Temu using the same kind of tech to deliver effortless return, repair and reuse across every product category.

Delete the Temu app from your phone and download Little Big Shed to buy less, lend and borrow more. The solutions are already here at our fingertips, they just require us to use them.

Was the circular economy included in the second emissions reduction plan?

The linear economy was mentioned but the circular economy chapter of ERP1 was redacted from the second, and no reason was given. We have lost an entire chapter in our plan that could help us address the 45% of emissions coming from what we make and how we grow our food. Not that smart given we have a massive shortfall in our trajectory to achieve net zero by 2050.

Is the circular economy just the new term for green growth?

We have seen the term 'Green Growth' used for the energy sector and the shift to renewables. It is not referenced by the? Ellen MacArthur Foundation , nor in our work at Circularity. A circular economy is focused on designing out wasted resources by keeping them in flow and at high value and regenerating nature. Green growth is not the goal, a reduction in virgin, extracted single-use materials and a regeneration of nature is.

Do we need to build circular economy products, factories and machinery from scratch using extracted, virgin materials?

No, many products already in use can become more circular by driving reuse, repair, remanufacturing, and shifting from ownership models to access. The rest can be remade with existing materials, mining our economy, not our ecology.

Does a circular economy account for entropy in recycling? Can it be renewable?

Recycling is the least ‘circular’ option as it requires the most energy and leads to downcycling and loss of materiality. That’s why the circular hierarchy leads with redesign, reuse & repair (extending life). The latter often requires little additional energy and loss of materiality just by getting people to engage in regenerative behaviours with the things they already own. Yes, entropy is a reality for processes like recycling and remanufacturing, but the alternative is everything is put into landfill. Isn’t it worth trying to save and reuse more than the 7% we currently are? We are a long way off optimising our material use.

Asked, what is the one thing a businesses could start doing - we couldn’t help but add that closing the circular economy knowledge gap from within is one of the most powerful ways an organisation can explore circular economy opportunities.          

We also wanted to shout out to the Circular Indigenomics work shared in another session by Jewelz Petley (Nga Puhi/Te Rarawa) , from a collective that was part of XLabs in 2022 . We encourage you to read more about their work here.

Thank you to the other panellists, and everyone who joined our session, please keep the questions coming.

If you'd like to embed circularity into your climate action plans, to save money, restore nature, align with regulations/targets and engage your team in an improved version of your business - get in touch.

Here's what our collective action looks like by working alongside other businesses, and we would welcome hearing from others on their journey.

You can kick-start your journey at XLabs: a circular economy training programme for businesses.

Self-directed online courses, online workshops and in-person 3-day design sprint options available now and into 2025: Register your interest here.

Thank you to everyone involved in the 16th Climate Change & Business Conference.

We hope that the inspiration from this year's conference leads to even more stories of bold action by the time we gather again next year.

Ngā mihi nui,

Louise Nash

Founder / CEO