Circular Economy

It's time for the circular economy to go global - and you can help

Customers walk inside the Original Unverpackt (Original Unpacked) zero-waste grocery store in Berlin's Kreuzberg district September 16, 2014. Original Unverpackt doesn't sell foodstuffs packaged in disposable boxes, bags, jars or other containers instead shoppers can buy the likes of muesli, rice and pasta by directly helping themselves from the large store containers, filling their own boxes before getting them weighed at the till. For beer and red wine, 'bring-your-own' bottles are just as fine, even vodka is stored in a big demijohn from which customers can buy a few shots, or more. The shop also sells washing up liquid and toiletries in bulk, with toothpaste sold in tablet form. The environmentally-friendly project, which was financed by crowd funding, also allows customers to buy far smaller quantities to avoid waste and to invest in the store's recyclable goods.  Picture taken September 16, 2014

This shop in Berlin produces zero waste - can the world follow suit? Image: REUTERS/Fabrizio Bensch

Frans van Houten
Chief Executive Officer, Co-Chair PACE, Royal Philips
Naoko Ishii
Director, Center for Global Commons, University of Tokyo
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Circular Economy

This article is part of: World Economic Forum Annual Meeting

It is time for a radical rethink about our relationship with natural resources.

We must move away from our current ‘take-make-waste’ linear economic model to a circular economy that emphasizes prosperity without waste through increased resource efficiency, better material reuse and more recycling. The transition towards a circular economy is estimated to represent a $4.5 trillion global growth opportunity by 2030, while helping to restore our natural systems.

There are many good initiatives around the world that are taking us in the direction of a circular economy, but the reality is that we are still far from the system-wide change that we need. This is why we are excited to be co-chairing the Platform for Accelerating the Circular Economy (PACE), which brings together leaders from both the public and private sectors to take concerted action.

The time to make a global impact is now.

 PACE has made good progress in its first 18 months - but it's just the start
PACE has made good progress in its first 18 months - but it's just the start Image: Platform for Accelerating the Circular Economy

The global perspective: Increasing demand for resources

Around 90 billion tons of natural resources are extracted every year to support the global economy. That is more than 12 tons for every person on the planet. Based on current trends, that number is expected to more than double by 2050. Currently, only 9% of resources find their way back into products after their first use.

Plastics are accumulating in the world’s oceans and only 14% of plastic packaging is collected for recycling. Heavy metals from electronics waste are polluting the air and soil: only 20% of electronics are collected for recycling. And smog from fossil-fuel combustion frequently blankets the world’s most populous cities. The impact of these staggering figures is clear to see in widespread environmental destruction, pollution and climate change, the greatest challenge of our age.

PACE progress to-date

To make decisive progress toward a circular economy, we need to bring together all actors along the value chain, and across entire industries. That’s where PACE comes in. Launched at the World Economic Forum Annual meeting in 2018, this partnership convenes public and private leaders to transform all sectors of the economy – from electronics to plastics and food systems, to name a few.

We have already made good progress. PACE now comprises more than 50 active CEOs, government ministers and NGO leaders from all over the world. We have, among other things:

- Partnered with the Nigerian government to address electronics waste, which is an approach we are now looking to expand throughout Africa

- Launched the Global Plastic Action Partnership with the leadership of the governments of Canada, UK and Indonesia, as well as companies including The Coca-Cola Company, Dow and Pepsi and partners like the World Bank, Pew and others. This effort is the first public-private partnership to translate ambitions to tackle plastic waste into tangible actions and investments

- Built a collaboration between the Chinese government, Tsinghua University and major electronics companies to help integrate more secondary materials into new products

- Marshalled commitment among a number of multinational corporations, including Royal Philips, Dell and Cisco, to equipment take-back programs. Companies work together to share best-practices around business modelling and company-wide engagement

- Collaborated with the Ellen MacArthur Foundation in their most recent report which highlights the potential of a circular economy for food – finding that a circular economy for food could generate $2.7 trillion in benefits annually for society and the environment, while potentially averting an estimated 5 million deaths every year until 2050. The report sets out a circular economy redesign for the food industry, with cities as a driving force.

Looking ahead: the determination to achieve system-wide change

Our ambition for 2019 is clear: we must systematically eliminate the barriers to scaling these best practices – across electronics, plastics, food and other key sectors with circular economy potential. We have a clear roadmap for doing so, including:

Our Global Plastic Action Partnership is set to launch its first country programme in Indonesia in March;

The “New Vision for Electronics” lays out how to start dematerializing the electronics industry, and is set to scale-up efforts to drive action between governments and companies

Our report on the Fourth Industrial Revolution for the circular economy highlights that technology and system innovations have incredible potential to accelerate the circular economy transition. At the same time, standardization and harmonization of materials, datasets, protocols and sorting systems are required to scale its use. PACE it set to ramp-up partnership with the innovation community in 2019 to help make this happen

These illustrate just a few examples of PACE’s plans for the year ahead.

Have you read?

Open invitation to join the PACE platform and multiply its impact in 2019

In its first 18 months, PACE has demonstrated its unique and valuable contribution to the global circular economy transition. Many companies, countries and NGOs are now signing up. In the last three months alone, five more governments and 10 more companies have joined the movement.

We encourage all leaders to join PACE to help promote scalable and replicable solutions for the circular economy. The time is now!

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The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Circular EconomySustainable DevelopmentStakeholder CapitalismNature and Biodiversity
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