What goes around comes around The circular economy in industrial manufacturing THE BIG Many resources are already scarce Secondary materials are the answer COMPANIES MAKE AMBITIOUS STATEMENTS ON DECARBONIZATION Circularity is the key CIRCULARITY MEANS MORE THAN JUST RECYCLING WASTE Reusing, repairing and refurbishing can change the world Contents The circular economy in industrial manufacturing | Think:Act 3 1 – PAGE 4 What is the circular economy – And why is it so important for industrial manufacturers? 2 – PAGE 8 The technical cycle – Four levers for changing the world PAGE 15 Interview with Andrew Morlet 3 – PAGE 17 What can we do? Real-life examples of circularity 4 – PAGE 21 The impact on business – How the circular economy affects industrial manufacturers 5 – PAGE 22 A task for the whole company – Cover illustration and illustrations on page 10/11, 15-18: Studio Muti/Folio Art To do's by business function PAGE 24 In conclusion – A checklist for decision makers 4 Think:Act | What goes around comes around 1 – What is the circular economy – And why is it so important for industrial manufacturers? BACK IN 1966, renowned English-born American economist Kenneth E. Boulding described the closed economy of the future as a spaceman economy, one in which the Earth "has become a single spaceship, without unlimited reservoirs of anything, either for extraction or for pollution […]." He contrasted this with the cowboy economy of the past, in which resources appeared infinite and illimitable. The evidence is clear that we have now entered this new economic phase: Unless we clean up our act urgently and stop acting like cowboys, we will soon have to abandon ship and search for a new planet. Today, 91 percent of material flows in the economy are linear, meaning that they are mined, used and disposed of in a single flow. Our unidirectional produce-to-waste approach destroys socioecological systems and the complex and interdependent network of ecosystems that we inhabit. The extraction and processing of natural resources for the production of goods is responsible for an estimated 50 percent of global greenhouse gases (GHG), and sooner or later these resources will become unavailable. For example, the European Chemical Society foresees that half of the 92 naturally occurring elements on Earth are at risk of future shortage – with 17 of the roughly 30 elements currently used in smartphones already facing prospective supply concerns. Environmental damage goes hand in hand with damage to societies and individuals, of course. Linear resource extraction, production and disposal heavily impacts marginalized communities. Chemical-intensive processing and the improper handling of waste creates high risks of pollution and harms the health of local workers. For example, according to the International Resource Panel, the toxic extraction and processing of metal resources is responsible for 39 percent of particulate matter health effects. And the impact goes far beyond local workers: Research carried out at the University of Chicago found that pollution reduces global life expectancy by 2.2 years, an effect 89 times as impactful as that of global conflict and terrorism. THE CIRCULAR ECONOMY EXPLAINED The solution lies in the creation of a circular economy. This is the idea that instead of extracting resources to build products that we later discard, we should aim to maintain the value of resources, materials and products in the economy for as long as possible in a circular process. The circular economy consists of two fundamental cycles, as described in the standard "butterfly" framework suggested by the Ellen MacArthur Foundation. The first is a biological cycle, in which nutrients from consumed products such as food and other biodegradable materials, once they can no longer be used, return to the soil. The second is a technical cycle, in which products that are not naturally biodegradable are reused, repaired, refurbished or recycled so that they can remain in use rather than becoming waste. The technical cycle is of key importance for products manufactured by industrial firms, which are the focus of this study – automobiles, factory equipment and machines, consumer electronics and the like. Reusing, repairing, The circular economy in industrial manufacturing | Think:Act 5 refurbishing and recycling such products can be facilitated by a number of supporting mechanisms, such as redesigning, reducing and rethinking owne