A Week of Circularity: Measuring the Circular Economy

It's hardly surprising that nations acquainted with the socio-economic challenges of natural resource scarcity are rapidly embracing circularity. This shift is setting the stage for a renaissance in industrialization, enhanced material productivity, and a significant leap in their global market competitiveness.

Singapore and the Netherlands offer us an example of this dynamic. In just a few short years, they have demonstrated the power of international cooperation in circular water technologies. This collaboration has catalyzed remarkable progress in decarbonizing maritime activities and reducing dependence on external resources, from water to energy and food. Regional private wealth is also increasingly engaged, recognizing the long-term potential in the value of circularity assets. With opportunities for investors becoming more prevalent and widespread, the landscape is ripe for those ready to invest in a more circular future.

?? The Science of Impact

The UN Economic Commission for Europe (UNECE), Economic Cooperation and Trade Division, has recently released a set of harmonized guidelines for measuring progress towards the circular economy. Beyond practical issues surrounding measurability, the work of UNECE zeroes in the value of materials in the economy, as a value for society overall.

Notable dimensions account for (i) economic efficiency of materials (the material basis of an economy and its interaction with trade), (ii) environmental effectiveness (the implications of materials extraction and processing on environmental quality and human health), and (iii) social equity (the every-day responses and reactions to policies as a result of the inclusiveness of a circularity transition).

While many roadmaps have failed to go beyond the historical association of circularity with recycling, it is worthwhile remembering that circular economy policies can be structured as a ladder which starts from a smarter use of materials, to expanding the lifecycle of products/parts, and creating an operating environment where the value of materials grows with their use.

Because a circularity transition involves lower rates of natural resources extraction and use, and preservation of natural capital, it can also drive a wave of more sustainable re-industrialization and increase in productivity and market competition.

There’s no surprise than to see that economies the rely the most on natural resources or are at risk of resource scarcity, have been early adopters of circularity principles as a way to grow their economic importance in the global stage while also advancing their environmental significance.

?? Circularity Roadmaps Explained

Singapore and The Netherlands bring us an example of close collaboration on national-level roadmaps for circularity. Both countries have a special bond with water, including the deployment of water resource management technologies to ensure safe-drinking water availability. In addition, the maritime R&D currently been developed in Singapore is an area of strong mutual interest in the decarbonization of shipping and the reduction of the environmental impact of maritime activities.

The Dutch government is ambitiously aiming for a 100% circular economy by 2050, with an interim goal of 50% by 2030. Its focus is on a handful of sectors: food and biomass, plastics, manufacturing, construction, and consumer goods. Meanwhile, Singapore has laid out two key strategies for sustainability:

• the Zero Waste Strategy for waste reduction and increased recycling, and
• the Green Plan 2030—a multi-ministerial roadmap aiming to reduce GHGe by 50% by 2050, to enhance green living, and to reduce external dependencies for water, energy, and food.

Starting 2017, a Dutch public-private consortium began collaborating on circular economy endeavors in Singapore, striving to align the ambitions of both nations. This partnership has emphasized integrated solutions and resource recovery within the water-energy-food nexus, with Singapore promoting a push toward digitization in connecting the high standards of environmental quality, with external trade and the training of a skilled workforce.

Where next?

Singapore is the largest trading and investment partner of the EU in South-East Asia and that it relies on supportive Free Trade and Investment Protection Agreements as cornerstones of its economic ties. The first Circular Economy Mission from the EU to Singapore took place in 2019, opening the door for continued cooperation in R&D activities at a more rapid pace.

?? Investing in the Circular Economy

Implementing circularity is complex, demanding a redesign of manufacturing processes, materials, and consumer behaviors. Public policy will continue play a vital role in incentivizing both consumers and manufacturers to adopt circular practices. Stefan Hofer, CAIA, CPWP , chief investment strategist APAC at LGT Private Banking , predicts the circular economy model will become the new standard, as it makes economic sense for companies to reduce waste and reclaim raw materials. Consequently, the value of incorporating circularity assessments in investment due diligence is also likely to pick up.

Due diligence is a critical process that investors undertake to understand and mitigate investment risks. The integration of circular economy risk factors into various elements of company evaluations is only at its early stages - whether for public or private assets. Digitization in supply chains is already playing a leading role in addressing a wide range of climate change-related issues, far beyond traditional compliance-focused supply chain questions. The Chancery Lane Project , the largest global network of lawyers and business leaders using climate contracting to advance decarbonization efforts, offers a top-level view on how climate warranties and indemnities are entering the realm of due diligence questionnaires. We are eager to see whether circularity principles will translate into actionable risk diversifiers in climate due diligence assessments.

???You don't want to miss this spring...

From Sydney to Washington D.C., and Cologne, this spring offers new opportunities to connect with fellow circularity practitioners, and stir our world towards a more sustainable economic transition.

Discover, grow and leave your mark!

March 20th: Circular Economy Learnings from Europe: Reflections of European Local Government Authorities (Australia, virtual session). Australia, New Zealand, and Asia-Pacific nations stand to benefit immensely from the European Union's strides towards a circular economy—a key insight from the 2023 European Study Tour by the Australian Circular Economy Hub and Planet Ark . During this third webinar in the ACE Hub's "Circular Economy Learnings from Europe" series, guided by Planet Ark's Nicole T Garofano, PhD, AAIP , expect a rich discussion on the challenges and opportunities that EU local government authorities face and a distillation of the essential takeaways that could shape the Asia-Pacific region's circular economy journey.

April 10th–11th: 2024 REMADE Circular Economy Technology Summit (National Academy for Sciences, Washington, D.C.). Registration is now open for the REMADE 2024 conference, sponsored by the U.S. Department of Energy (DOE) . Among others, Andrew M. , CEO of the Ellen MacArthur Foundation will provide opening remarks, followed by notable keynote addresses by Google's Mike Werner (Leveraging AI to Accelerate Circularity), and decarbonization opportunities with Stephen Hammer , CEO of The New York Climate Exchange . Those interested in accelerating the transition to a Circular Economy are strongly encouraged to attend.

April 16th – 17th: 5th Go Circular Summit (Cologne, Germany).* This year’s theme ‘Utilizing enablers and breaking barriers to achieve plastic circularity’ is the perfect opportunity to start building plastic circularity collaborations. Key topics of the 2024 Summit include: How different policies shape the future of the plastic circular economy; What is the market demand and what innovative technologies are appearing to fill that demand; How can we bridge the gap between plastic recycling and reuse in a circular economy; How to unlock the power of the plastic value chain with partnerships.

(*) Note: On April 18th, participants are invited to join a guided tour to the Brightlands Chemelot Campus and Chemelot Industrial Park, an innovation hotspot in the heart of the largest chemical industry cluster in Europe.

Off to another impactful week!