In their book released in the summer of 2018, corporate responsibility veterans David Grayson, Chris Coulter and Mark Lee predicted a “Regenerative Era” of business. “We believe that as we get closer to 2025, there will be a critical mass of companies committing to a circular economy or closed-loop approach to business,” they wrote in “All In: The Future of Business Leadership.”
The financial incentive is great: The worldwide circular economy has the potential to generate $4.5 trillion in additional economic output by 2030, the global accountancy Accenture estimates. Even reaching a 75 percent waste diversion rate could create 1.1 million new jobs by 2030 in the U.S. alone, according to 2018 research.
From government collaborations to massive corporate commitments, we moved closer to realizing a circular economy in 2018. Let's take a look back as we rally for the year ahead.
1. Firms worth $1.3 trillion bolster new innovation initiative
At the start of each year, the World Economic Forum brings leaders from the public and private sectors together to discuss pressing problems and solutions. In January 2018, the World Business Council for Sustainable Development (WBCSD) leveraged the Forum to announce a new circular economy program. An initial list of 30 companies from 16 industries signed on to the Council’s Factor10 project, which aims to “build a critical mass of engagement” from the business community around the circular economy.
Initial partners include BMW, Dow, ExxonMobil, Honda, Novartis Philips and Rabobank. If these companies fulfill their commitments and invest in circular solutions, they stand to reap great financial and reputational benefits. But if they fail to show any progress over the next few years, they may draw ire from advocates and the public. “For companies participating in this initiative, including ExxonMobil with its lucrative plastic industry, they could find themselves stuck with the reputation of yet again talking the sustainability talk but doing little to walk that walk,” 3p Executive Editor Leon Kaye observed.
2. Companies move toward circular packaging
In June 2018, a group of 25 institutional investors with a combined $1 trillion in assets called plastic pollution a clear corporate brand risk and pledged to engage with consumer goods companies on packaging solutions. Advocates and NGOs have long pressured top brands to assume greater responsibility for the single-use items they sell, arguing that it has taken companies far too long to ensure their packaging is reusable or recyclable.
Several companies stepped up to the plate last year. In October, French multinational Danone—parent company of brands like Evian water, Oikos yogurt and Silk plant-based milks—pledged to produce 100 percent circular packaging by 2025. Around 86 percent of the company’s packaging is already circular, and half of its water volumes are sold in reusable packaging, Vikas Vij reported on TriplePundit this year.
In the face of mounting pressure from advocates, Coca-Cola pledged to collect and recycle 100 percent of its beverage packaging by 2030, although the details remain murky. Nestlé, the world’s largest food company, made a similar commitment last year, pledging to make all of its packaging recyclable or reusable by 2025. McDonald’s and PepsiCo have similar commitments on the books.
As companies move toward greater circularity in packaging, some hard-to-recycle elements are bound to be left behind, as demonstrated by the Great Straw Revolt of 2018: In response to a wave of consumer pressure, a sizable list of companies—including Starbucks and Alaska Airlines—pledged to ditch plastic drinking straws in favor of recyclable or compostable alternatives.
3. Stakeholders adopt a shared vision for plastic waste
Nearly 300 brands, governments and other stakeholders adopted a new strategy to address plastic pollution in October 2018. Launched by the Ellen MacArthur Foundation, the New Plastics Economy Global Commitment sets forth plans for a circular economy around plastics.
Only 14 percent of plastic products are recycled, according to a 2017 report from the New Plastics Economy. “Experts with the initiative foresee a recycling ceiling of around 70 percent and say tackling the remaining 30 percent would require a ‘fundamental design and innovation’ approach,” 3p’s Tina Casey reported. The initiative aims to drive collaboration between plastic-dependent companies, recyclers and governments to reduce the volume of plastic that ends up as litter or landfill waste.
Brand participants, including Danone, Mars and Johnson & Johnson, represent 20 percent of all plastic packaging produced globally. These firms signed on to evidence-based, time-bound targets as part of the initiative—including pledges to increase their use of recycled material, eliminate unnecessary packaging, and make all packaging reusable, recyclable or compostable by 2025.
4. The CE100 welcomes new corporate members
Launched by the Ellen MacArthur Foundation in 2013, the CE100 rallies prominent actors in business, government, and civil society to invest and innovate around the circular economy. The CE100 offers companies a multi-stakeholder partnership to ease their transition to a more circular model, and it allows corporations to demonstrate that they’re open to such a transition. Global partners include the likes of Unilever, Google, Cisco and IBM.
The CE100 officially launched in the U.S. in 2016, and its membership is growing. The innovation program welcomed at least 20 new corporate members last year, as well as a number of nonprofit organizations and cities like Charlotte, North Carolina, and Toronto, Canada. Companies including Target, AB InBev and Procter & Gamble pledged to offer more circular products, invest in new technologies, and incorporate circularity into their supply chains as part of their 2018 commitments.
5. Fashion labels move toward circularity
The Ellen MacArthur Foundation’s Make Fashion Circular program aims to rally top brands to eliminate unnecessary waste from the fashion sector. The initiative continued to gain traction last year. Labels like Burberry, Gap, H&M, HSBC, Nike and Stella McCartney pledged to design models that keep clothes in use longer and recycle their materials at end of life.
“For the fashion industry to thrive in the future we must replace the take-make-dispose model, which is worn out,” Dame Ellen MacArthur, founder of the Ellen MacArthur Foundation, said in a statement. “We need a circular economy for fashion in which clothes are kept at their highest value and designed from the outset to never end up as waste.”
Additionally, online thrift store thredUP launched a re-commerce partnership with top apparel companies, in which consumers receive gift cards for partner brands when they send used clothing to the thrifting platform, Lauren Phipps of GreenBiz reported.
6. Companies team up on a recyclable coffee cup (finally)
Due to a plastic lining that prevents hot beverages from leaking out, paper coffee cups are notoriously difficult to recycle. After years of pressure from advocates, two top coffee sellers finally took action last year.
In July, Starbucks and McDonald’s joined forces on a multi-year effort to create a compostable coffee cup. With help from Closed Loop Partners’ Center for the Circular Economy, the companies hope to release the cup by 2021, Fortune reported.
7. Ocean-bound plastic becomes new products
A partnership launched in 2018 by Dell and the Lonely Whale Foundation encourages companies to collect ocean-bound plastic and turn it into new products.
HP, for example, turned 12 million plastic bottles collected in Haiti into new ink cartridges. Everlane launched a line of outerwear made from recycled plastic and pledged to eliminate new plastic from its supply chain in 2021, while Ikea plans to begin prototyping products made from ocean-bound plastic in 2019, Fast Company reported.
8. Government commitments pave the way for a circular future
Governments around the world are taking a serious look at the circular economy as a way to make use of the 82 billion tons of raw materials expected to enter the economic system in 2020. In 2018, several governments set new commitments, established new programs and formed new collaborations in pursuit of a system to turn that waste into resource.
The United Kingdom’s Waste and Resources Action Program (WRAP) launched the U.K. Plastics Pact in April to pursue a more circular economy for plastics by 2025. China and the European Union signed a joint memorandum of understanding on circular economy cooperation in July, pledging to work together and align their policies.
If that's not enough, the U.K. and Canadian governments are discussing how circularity could play into their economic plans—and they’re even considering a post-Brexit trade deal that hinges on the circular economy.
Image credits: 1) Courtesy of Starbucks 2) Courtesy of the Ellen MacArthur Foundation