What is the Value of Circular Economy Without Sustainability?
What’s the meaning of the Ellen MacArthur Foundation’s decision not to talk about sustainability and frame the circular economy around economy? While using or not using the S word may seem like just a question of choosing the right frame, it may go deeper than that, representing very two different directions for the circular economy.
A couple of weeks ago I listened to the GreenBiz 350 podcast, where Heather Clancy and Joel Makower shared some commentary and highlights from Circularity 19, “the largest circular economy event in North America”. The first item on the show was about a conversation Makower had at the conference with Andrew Morlet, CEO of the Ellen MacArthur Foundation.
Here’s one part of the conversation I found interesting in particular:
Makower: And you almost never, maybe if ever use the word sustainability?
Morlet: Yes, we don’t. If you go to our reports, the way that we’ve framed this topic is really about the economy, and you know, I think there is many people in the community who are very strong on the sustainability, or green, or climate agenda. There’s a bunch of people in the middle of it who are fairly neutral, and there’s a group that don’t buy into it. What’s interesting — when you talk about the economy, it’s a topic that everybody buys into it.
And this is about a better economy because it has better economic outcomes, better social outcomes, better environmental outcomes. It’s about creating wealth rather than just extracting wealth, and it’s an economy that makes sense because it can run forward into the long term.
The relationships between the circular economy (CE) and sustainability have been on mind for a while, so I couldn’t get Morlet’s argument out of my head. At first it sounded reasonable — after all, what’s wrong with creating a broader common ground to advance the use of circular principles? However, the more I thought about it, the more I felt this can be more than just presenting CE in a more appealing way. While using or not using the S word may seem like just a question of choosing the right frame, it may go deeper than that, representing very two different directions for CE.
Is this about the ‘Why’?
Let me explain my point using Simon Sinek’s ‘Golden Circle’ framework (see picture below). In his book “Start with the Why” Sinek explains: “The Golden Circle is an alternative perspective to existing assumptions about why some leaders and organizations have achieved such a disproportionate degree of influence.”
As you can see the Golden Circle includes three elements:
1) What = the result. What do you do?
2) How = the process. How do you do what you do?
3) Why = the purpose. It is about asking: “what is your purpose, cause or belief?”
From my point of view, CE is clearly the ‘how’ part in this framework, i.e. the process. It is in its essence about changing the way we do things, transforming “all the elements of the take-make-waste system: how we manage resources, how we make and use products, and what we do with the materials afterwards.” This redesign of the economic system, according to the Ellen MacArthur Foundation should be based on three principles: Design out waste and pollution, keep products and materials in use, and regenerate natural systems. If we do so successfully, the foundation suggests we can “create a thriving economy that can benefit everyone within the limits of our planet.”
It seems that two elements, ‘how’ (CE principles) and ‘what’ (thriving economy that can benefit everyone within the limits of our planet) are defined pretty clearly here, but about the ‘why’?
According to Sinek it’s critical to know your ‘why’: “Knowing your WHY is not the only way to be successful, but it is the only way to maintain a lasting success and have a greater blend of innovation and flexibility. When a WHY goes fuzzy, it becomes much more difficult to maintain the growth, loyalty and inspiration that helped drive the original success.”
This is where we may have a problem.
I believe sustainability should be the ‘why’, whether we consider it as “meeting the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland Commission), “to make the world work for 100% of humanity in the shortest possible time through spontaneous cooperation without ecological offense or the disadvantage of anyone” (Bucky Fuller), or simply “living in a safe and just operating space” (Kate Raworth). This is the purpose behind the use of CE principles, or for that matter any other strategy we have in our toolbox.
So, when the Ellen MacArthur Foundation stops talking about sustainability it actually stops talking about the ‘why’. I assume Morlet will probably make the case that acknowledging that “the current system is no longer working for businesses, people or the environment” is sufficient as a purpose or cause, even without mentioning the S word. After all, aren’t we talking about the same thing?
I think we’re not. Sustainability is holistic framework that is grounded in values. As fuzzy as it can seem to be sometimes, it still requires us to dig deeper to have a better understanding of the root causes of the issues we need to address. Any attempt to hide it or replace it with a more careful language means avoiding both a conversation about values and the need to look very carefully under the hood.
If you think about it in terms the iceberg model it is very clear that you can’t go to the deepest level of ‘mental models’ (“the attitudes, beliefs, morals, expectations, and values that allow structures to continue functioning as they are”) without talking about sustainability. This level represents very powerful drivers and as Lawson and Sleezer explain: “It is very difficult to make substantive changes in system structures, patterns, or events without first changing the relevant mental models.”
Two issues I believe demonstrate how the Ellen MacArthur Foundation’s approach doesn’t go deep enough:
1) The issue of overconsumption — while CE principles focus on changing the linear system into a circular one, they usually stops short of addressing questions about the level of consumption of products and services, not to mention growth in developed markets. Bocken and Short explain the problem with this approach:
“More recently, the concept of the ‘circular economy’ has gained widespread popularity, whereby materials are continually recycled and reused to curtail demand for new materials. However, even this approach can lead to greater resource consumption if total final consumption of products and services is not mitigated (Allwood, 2014).
Referring to Boulding (1966), a successful circular economy could only be achieved if global demand for the volume of products stabilised, which is a utopian prospect in our growth-driven economic system and expanding global population (in Allwood, 2014)…To manage consumption, businesses will need to move beyond eco-efficiency (saving energy and materials), which is close to the conventional business case, to include more radical new approaches such as ‘sufficiency’, which focus on reducing absolute demand by influencing and mitigating consumption behaviour (Dyllick and Hockerts, 2002; Young and Tilley,2006; Bocken et al., 2014).”
Overall, it is clear that disrupting the current system requires us to challenge not just how we produce stuff, but also how much stuff we consume. While the Ellen MacArthur Foundation appears to be very comfortable focusing on the former, it seems far less interested in addressing the latter.
2) The social dimension — CE is very focused on the environmental impacts of the current system, but seems to pay much less attention to the social impacts. While it may be part of the CE narrative of the Ellen MacArthur Foundation (for example, “we must transform all the elements of the take-make-waste system…Only then can we create a thriving economy that can benefit everyone within the limits of our planet“), the social dimension is quite missing from the overall CE discourse.
The social dimension in CE is certainly not equal to the other two dimensions — economy and environment. Murray et al. explain that while “the three pillars of sustainability (economic, environment and social) explicitly include the social dimension, in terms of human stakeholders, human well-being, and human rights… the Circular Economy, however, is virtually silent on the social dimension, concentrating on the redesign of manufacturing and service systems to benefit the bio-sphere.”
Consider also the question of who actually benefit from disrupting the current system. As Geissdoerfer et al. point out: “sustainability aims at benefiting the environment, the economy, and society at large (e.g. Elkington, 1997), while the main beneficiaries of the Circular Economy appear to be the economic actors that implement the system.”
In a nutshell, CE puts the environmental before the social rather than considering them as two equal parts of the same issue.
A different outcome
I can understand the Ellen MacArthur Foundation’s approach to CE and that it wants to bring more businesses to consider CE and therefore avoids using the term sustainability. I can also understand the logic of not irritating companies and executives who don’t like the S word. Nevertheless, I think there’s something wrong about it because it dilutes the ‘why’ in the foundation’s golden circle, emphasizes the flaws of the CE principles (the ‘how’) and eventually will lead to an outcome that is not up to par.
The foundation may aim to “create a thriving economy that can benefit everyone within the limits of our planet,” but it can end up with a circular economy, where we do a much better job when it comes to creating value, but still very far from the vision of “living in a safe and just operating space”.
This is the time for bold and clear ‘why’ (consider the Green New Deal as an example), not a diluted and compromised one. The Ellen MacArthur Foundation has a choice to make and I hope it will have the courage to reconsider its position and bring back sustainability into the conversation about the circular economy.
