Meeting Human Needs thanks to Material Circularity

Interview done by Emanuele Di Francesco, Circular Conversations, available here.

Alexandre Lemille sees in our next economic models the opportunity to design a model that provides well-being for all humans on Earth. Using the “Circular Thinking”, Alexandre projects ourselves beyond just the eradication of waste into a model that would also eradicate poverty. Alexandre holds an MBA from Hult International School, Boston, MA, USA, and was recognized during The Circulars 2016 for his leadership in the field of Circular Economy.

Hi Alex, thank you for accepting my invitation. You are proponent of a framework named “Circular Economy 2.0”. Before getting there, which misconceptions are there about the circular economy in general?  Instead of starting from what it should be, let me start from what a circular economy should not be.

When you read papers about the concept of the circular economy, the model is depicted as an advanced recycling economy, a waste management tool or a frugal economy. But the circular economy is not just about these partial aspects of the model. The problematic here is that our focus is on recycling which in my view slows down genuine innovation, i.e. those that will change the face of the way we produce goods and offer services. Recycling is a second material stream of a linear economy and we are victims of such a stream. Recycling has to cope with volumes of goods, complex polymers and materials. Often they cannot be retreated or end up in mash-up fragments that once again require lots of energies to design a new product from them. Product that is often not meant to be sold with a return strategy.

So there is no space for recycling in a circular economy?

Recycling does not question the current way we produce. It encourages it. In 90% of the cases, recycling is down-cycling and there is no preservation of material value. It is not focused on material valorisation. In a truly circular approach we are revaluing materials, we are keeping their value, whereas in recycling you are a victim of waste and its exponential volumes. It’s not a proper definition of revaluing resources in a cyclical approach, because those designs, those materials were not meant to be reused in the first place. A linear strategy has led to a very high level of materials complexity. In circular economy we are trying to focus on modularisation and standardization, simplification in the way we create products, because we focus on its re-usability ratio. So in my view, recycling is acceptable today as often we do not have other choices, but it should not be considered as a genuine circular strategy.

If it’s not a frugal or an advanced-recycling economy, what is the circular economy to you?

It’s an economy  based on the principle of abundance of flows following natural cycles rules of regeneration. A tree has so many branches, so many leaves and so many fruits. But they were not meant to be produced just for the tree itself but to sustain and feed the surrounding ecosystem: the soil fertility, the birds’ nest, the fauna and the flora. On top of following the rules of the regeneration, it has restorative functions such as capturing the sun light and sequestering carbon. These two functions, the regeneration and the restoration ensures the resilience of the ecosystem it depends on to thrive. I translate this view into business strategies to increase corporate resilience throughout seminars, workshops or training. If their strategy is regenerative and restorative, they will thrive in the medium to long-term. This is what circular economy is about: identifying abundance of flows to restore them ensuring your resilience is at its maximum.

With this view in mind,  an individualistic frame of the world represents a great obstacle.

Yes, because we are stuck in a linear way of thinking and it’s always very difficult to break it down. Even regarding myself, it took me three years to be fully embedded in the circular thinking. For instance I no longer mention waste or recycling, but resources to be valued and restored within the most dynamic loops of the model. I am trying to be in that advanced space, even if it is not always easy to shift mentalities. I find the millennials and the younger generations to be fully connected, they just get it straight away.

Let’s enter the space of “Circular Economy 2.0” and its Humansphere. Where does the idea of such a model come from and how did you get there?

I worked in the telecom industry for many years. My best years were when I was in charge of the Celtel International account, company spanning over 22 countries and targeting the Base of the Pyramid market. They revolutionized the markets they were in thanks to they mobile phone based social innovations. Few years later, then at Cisco Systems, - the first corporate partner of The Ellen MacArthur Foundation -, I did my MBA with social innovation as one of my electives in Boston, MA, USA. I was so passionate about the topic that my professor connected me to the UN Global Compact in New York where I started to analyse  their 10 Principles that corporate entities were asked to comply with. Back in Dubai where my Cisco Systems office was, I then volunteered to deliver Global Reporting Initiative training to companies and joined the only social enterprise association at the time, in 2009. It was the first incubator in social enterprises. I had great moments but most companies outside our network started to claim to be a social enterprise. This is when I became a social return on investment (SROI) accredited practitioner to prove whether a company was really having a positive impact on communities and societies, away from the ambient social-washing.

When Cisco Systems became the main partner of the Ellen MacArthur Foundation, we had regular web meetings with Dame Ellen MacArthur in our intrapreneurs internal group. My first question to Ellen was: do you have an understanding of the impact of circular economy on poverty? She was very surprised by my question, because that was not exactly the main focus of such model. She replied “no Alex, no clue”. I saw straight away that a shift to this economic model could be the opportunity window to target societal issues. A versatile model based on services could be addressing more needs. In 2013 I started my company with two main focuses: measurement of social impact of companies and the circular economy. In 2014, I decided to merge the two topics and wrote the disruptive article called “Circular Economy 2.0”. This was not my first article, but this one went viral with lots of positive comments. This is how it started.

But why suggesting to innovate around a Circular Humansphere?

Well, the circular economy is the model we need, but it has to be genuinely distributive i.e. made available for all of us to thrive from it. If we fail to embed its social dimension, it will remain within the VIP circles. Why? Besides being linear, the economy has also been unequal. We need a paradigm shift, a model that sets a new narrative. If the circular economy is our next economic model, it’d better be appealing for all of us because we won’t have a second chance to redesign another one, if we continue splitting the economic from the environmental and/or the social. Social conditions are as bad as environmental ones. We will not succeed to remain below the 2 degrees set during the Paris Agreement with a circular model that does not grant a transparent access to resources, preserves human value and values, while responding to the needs of all the people.

Having a Humansphere that could fit in well with the Circular Economy Butterfly Diagram helps decision and policy makers to question themselves about which are all the resources and the flows of energies available today in a world of coming scarcities.

How can the Humansphere concept push businesses into doing things differently?

Suggesting to businesses that we can go beyond the current Circular model into eradicating both waste and poverty is not always appealing to them. They do not sense the reason why they should play a role in this suggested social dimension, which is fair enough. Showing a Humansphere with four new strategies that could generate innovative solutions or increase their resilience is definitely another way to get to the end goal: offering services that are so flexible that could end up one day addressing the needs of more people, currently unable to access our product ownership-based economy. Gaining new or future customers a business would have never accessed to in a linear economy is a more appealing narrative. Therefore, if we expand on the “circular thinking” in the social dimension, we perceive a stock of resources and flows of several energies available, often under-utilized.

And the human stock is growing from 7.5 billion to 10 billion. It is abundant, we have plenty of resources and energies. How about questioning ourselves about potential new roles we could have in this next model? We are versatile, we are adaptable. So why don’t we embed ourselves within the equation? Seeing humans as abundant resources and endless energy flows, we could be truly innovative within our businesses while preserving our human capital at its highest value. We would obviously have the choice, but keeping us busy with meaningful activities, maintaining the value of the Technosphere or rebuilding our disappearing Biosphere could but just lead to creating far more value in a virtuous ecosystem.

This way of thinking calls for a new role for humans. What exactly should this role be?

I often give the example of rebuilding the biosphere, such as turning deserts into forests, dry mountains into lush mountains, namely the work of John D. Liu. In China and also in Africa there are people that are pollinating flowers, replacing the function of bees.  This is just a way in which humans can replace the functions of the ecosystems that are missing and can rebuild them.

More generally, if you see humans as endless energy flows and abundant stock of resources, you can keep them busy either by asking them to use their energy to rebuild the biosphere or to maintain the value of the technosphere. Once we sleep and we eat, we are endless energies. In an economy which is based on maintaining, repairing or remanufacturing goods, human energies are needed far more than in an economy of extraction and transformation. Moreover we could even consider ourselves, our bodies, as circular systems themselves that could be involved in the regeneration of our soils but not only. A rewarding system incentivizing us to prefer humans as energies and resources could be implemented based on the recognition that humans should play those key roles in tomorrow’s economy. The Humansphere does not get involved in the way rewards should be made as this has to be within the two parties involved, but in principle the higher the diversity of these means of exchange the better, moving us away from the scarcities of a model based on a single currency reference into the revival of ancient ways of recognition or future ones such as decentralized and virtual applications.

I know this is all very conceptual but it is this kind of thinking that will make us move on. For instance, humans are often considered as ineffective in a linear economy because they cost a lot of money. Salaries are often the heaviest line of a P&L table. With other risks related to managing people, they are not seen as a priority in an economy based on efficiency, now being replaced by technologies. But from a circular perspective, we need them to repair, maintain and re-manufacture our goods so they can be reused. Preferences will also be given to humans on some occasions as resources are limited, especially the ones called “green” as solar panels and flat screens require rare earth that are highly limited, from an access point and in volumes, but also not very “green” given their impact at the extraction phase.

When I ask people ‘why are you so excited about artificial intelligence and robotics?’, some say ‘because we are going to enjoy life, party, watch TV or be at the beach all day long’. Well, it doesn’t work in this way! We need to be busy, to think, to learn i.e. make sense of our lives; it is the nature of humans to keep on learning. I have nothing against technological advances. I love technology, but I know that technology is not the only response to our challenges. We mainly have to go through a deep process of behavioral change. This time we will have to build an economy that works for everybody, not just for some. This is the purpose of the Humansphere: pausing and finding roles for anyone to be involved in the next economy. Energy access is distributive, i.e. it can be universally accessed by anyone on the planet. This is a core principle in the circular economy. The distributive nature of the model should grant all of us access to it.

If you read Walter Stahel’s Performance Economy, you see that the stock of education and knowledge  is the most challenging one, because it can lose value, if you don’t maintain it, but it can increase so fast in value if you grow it. Education and knowledge are our next sacred fuel that will sort out our challenges and help us develop strategies of adaptation.

Are there some other implications following from these new roles for humans?

Yes, and I refer to consumption here. If you keep people busy in these three loops, then you have a chance to keep consumption low, because they work to address social needs first, besides economic ones. An economy of services is not only flexible but highly performing as driven by the guarantee of delivering a promised result. Thus starting by focusing on social needs beyond material circularity implies that we stand a chance to deliver - in priority - on addressing the needs of the people. The circular economy is about material circularity, our materials will have less impact on the planet by circulating longer, but it is not good enough. Such replenishing model needs to go one step beyond into ensuring its equal access.

Another aspect relates to the fact that ensuring people’s involvement in the next economic model might lead to behavioral change in our consumption patterns. According to two American professors, Zink and Geyer, who published an article in February 2017 about circular economy  rebound , with the circular economy we might end up three quarter of the time into consumption rebound. This means that the conversion of energy with new ways of doing business always leads to more consumption. Thus embedding people at the core of the next economy might slow down this pattern, for instance by having self-organised societies ensuring consumption is reduced while multiplying the potential of natural cycles regeneration. But we do not have data here to confirm this aspect. All I can assume is that the more the people are part of it, the higher the chances of behavioral change, therefore bending towards more responsible consumption patterns.

You are of the few discussants who explicitly talks about poverty in the circular economy. What is your approach here?

Let me start by saying that I am not an expert on poverty from a sociological point of view or regarding the multilayered issues by which people end up in a cycle of poverty. I address poverty from a circular economy point of view. Also, by saying this, it means that we go beyond what the circular economy is today into a new model. From a systems thinking approach, what is at the core of the model is the recognition that waste only exists in human spheres and not in Nature. Waste is a concept that has been invented via our human approaches to industrial models. Waste is considered here the root cause of our environmental problems. These unused resources were wrongly designed in the first place. I use the exact same reasoning with poverty, i.e. I just use what I call the “Circular Thinking” to also consider poverty as our root cause, this time of our social problems.

If the circular economy or another concept becomes our next economic model, it will have to embed the social dimension to make it appealing to all of us. So, embedding the notion of poverty, which is at the roots of social injustice, in parallel to the ending of waste, and using the brains of million of people to apply this “Circular Thinking” on both, we stand a chance to design a safe and just model. As explained earlier, we need the people in a genuinely caring economy, not just to make them work but to involve them in our adaptation to our biological sphere. Following a circular rule of first preserving our biosphere, then preserving our people, and only then asking ourselves what is missing from the technosphere to make it work will lower our impact on resources and will value abundant ones: us.

Seeing a service based model far more flexible than a product based one, and on top, seeing the abundance of energies available in the Humansphere, are strong indicators that we can win the battle on poverty. If humans are at the core, not at its periphery, the next model could win both battles, the one on waste and the one on poverty. If we do not try, we will certainly not succeed!

What can businesses do to integrate this dimension in their operations?

From a business perspective, I put forward some proposals to have inclusive circular business models. In a service based economy, you offer goods-as-a- service. This small loop on the circular graph is the one with the highest potential as goods are accessed instead of being owned. Goods are durable and circulate as services. Once you have generated several years of income on the very same object, repaired and cared for, it can then be offered to far more people than in today’s economy, as it is a service. By nature, service is a fraction of the price of the product, and its price tag can be adapted to the purchasing power of your soon to become customer.

It could therefore make sense to maintain the very same good over years in the economy and gradually lower its service price. You will gain new customers in markets that you were not able to access when selling products. And I push the model a bit further, a product that has been sold as a service over 15 or 20 years, maintained in a pristine state, could even be offered for free! How come? On one hand the product ownership remains yours. The value of all its parts is still yours enabling your company to use them later. They are your stock for future goods, just that they are out there in the market, being used. On the other hand, offering a free service could also lead to integrating more people in the economic sphere. You may wish to decide to grant its access with the objective of gaining new people who could become loyal customers in few years time as they are given opportunities to be included in a virtuous economy. In opposition to today’s model where the future represents a risk, here the future is an opportunity.

A service economy attached to the principle of financial flexibility, - with pay-as-you-use, pay-as-you-need strategies -, becomes a model that lowers down its access standing a higher chance to absorb the last 1.3 billion people considered economically poor today if compared to a linear model. With such inclusive circular business models approaches, we would reward businesses and governments by the number of jobs and activities created, by its ability to integrate the next person in its circle, making the economy genuinely virtuous. With a more equitable approach, we would a chance to eradicate poverty at the same time.

Might you give a concrete example of how this might work?

Sure. One of the way a model becomes equitable is when you ensure all products involved in it as standard, modular, interchangeable and up-gradable. Instead of having to buy a full house and be indebted over the next 25 years, you could access the one or two rooms you require today as a single person. As you get married, an additional room is added to your place. Life patterns are not linear. You have kids, rooms are added. You get divorced or your kids leave the house, they are removed. A pay-as-you-need or pay-for-your-needs approach will move you out of any financial pressures as today, might increase your life conditions, thus your overall well-being. It is very Utopian, I agree, but thinking this way could help us see the bigger picture and innovate into dimensions we would never have thought of before.

In your writings, you draw a fascinating link between Africa and the circular economy, arguing that ‘Africa is the best place where this can happen’. Can you elaborate on this and provide examples of how circular thinking might be intrinsic into African culture?

My point is that at a continental level, only Africa has these two fundamental advantages that are - in my view - must-haves in circular economy: deeply collaborative societies and still below the global average footprint. From a collaborative aspect, “they have been there” so to say, they know what resource scarcity and survival mean. Friends and family circles are strong. People help each other when in need. Their social structure is very resilient. European societies are individualistic yet a resilient economy will require deep behavioral changes to change the way we access goods and lower down our resource dependence. There is lots of work ahead of us. The second fundamental aspect is Africa’s low footprint. Even if the continent shifted to a footprint threshold since 2015, mainly 3 countries are above the global average footprint per inhabitant. Designing a Circular model starting low from a footprint perspective (even if the notion of footprint is not applicable in circular economics) is far easier than convincing millions of Europeans to move from 3 planets to below one. Now Africa lacks leadership. The hope lies in it younger generations who get it. Today countries such as Rwanda, Nigeria, South Africa and to a lesser extent Senegal, Kenya and Morocco have started to define what circular economy means to them. These measures need to happen fast as, unfortunately, lots of climate related issues are listed high in the threat levels as communicated by international organisations.

This is all for today. Thank you very much for sharing your perspective and ideas, Alex!

September 2018