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TRANSITION FROM LINEAR 2 CIRCULAR: POLICY AND INNOVATION

Periodic Reporting for period 2 - R2PI (TRANSITION FROM LINEAR 2 CIRCULAR: POLICY AND INNOVATION)

Reporting period: 2018-05-01 to 2019-10-31

R2π – Transition from Linear to Circular is a European Union Horizon 2020 project focused on enabling organisations and their value chains to transition towards more viable, sustainable and competitive economic models. Indeed, the current linear economic model of produce – use – dispose, ultimately destroys much of the value that has been created in manufacturing processes. When considering the beginning of the value-chain, raw material sourcing, and the end, disposal, it is clear that in the medium-term, the EU cannot continue importing and land-filling at today’s rate; hence a paradigm shift with regard to an economic model of production and consumption based on circularity needs to be demonstrably realisable and thus offer a credible pathway to achieving sustainable environmental development and its corollaries, social and economic welfare.

The objective of R2π is to identify successful approaches to achieve a circular economy and thereby position the EU as a world leader in this domain. In particular, R2π examines Circular Economy Business Models (CEBM) as levers for the Circular Economy (CE), demonstrating both which barriers are faced, as well as which enablers exist, for their adoption. Concurrently, R2π examined the policy environment, both at the EU-level (especially with regards to the EU CE Action plan) as well as at the national level, which also act as barriers and enablers of the circular economy. A major outcome of this policy investigation was to recommend “policy packages”, combinations of policies that work together to overcome CE barriers, while enabling CEBMs.

It is intended that the widespread implementation of a circular economy based on successful business models, supported by effective policies, shall reduce environmental impact and maximise social welfare, while ensuring economic development. In a resource-constrained world, circularity pursues greater and more effective use of resources and thereby ought to lead to benefits for producers, consumers and other stakeholders at large.

It was requested of R2π to analyse CEBM in 5 priority sectors in the EU, as designated in their EU CE Action plan: Plastics, Food waste, Critical raw materials (including electronics), Bio-based materials, and Construction, and R2π further added water a 6th key sector.
Having created a conceptual framework, in which Circular Economy was defined in comparison to other concepts at the crossroads of ecology and economy, R2π defined a typology of CEBM, covering seven business model patterns: Circular Sourcing, Co-product Recovery, Re-make, Re-condition, Access, Performance and Resource Recovery. This was the prism through which 18 best practice CEBM case-studies across the 6 priority sectors were analysed. A varied case-study profile was selected consisting of 7 large corporations, 8 small and medium enterprises, 1 public entity, 1 entire value chain with both public and private organisations and 1 social project.

These case-studies have been documented and are individually accessible. They have formed the basis of a rigorous synthesis including the analysis of the key factors of CEBM (incorporating barriers and enablers).

Findings from the case-studies and the key factors were applied to developing the CEBM innovation process in which R2π guided 4 enterprises, which had not yet determined how to use CEBM but definitely wished to explore what CEBM could bring to their business and stakeholders. This investigation also examined the policies that could enable these four companies to become more circular.

Moreover, such case study findings were a major input for business transition guidelines and policy packages, key exploitable results of the project. The circular business guidelines offer the business community a rich resource covering case-studies, innovation toolkit and sector policy packages, all in an easily navigable online open-access facility. The transition guidelines thus synthesise the project findings and act as a summary of the entire project.

For policy-makers, sectoral policy packages covering the 6 priority sectors as well as an overall synthesis were produced; as opposed to mere policy recommendations, policy packages consider both effectiveness and implementability, as criteria for eligibility. In turn, a synthesis of the policies collected in the individual policy packages were collected together, resulting in 11 cross-sectoral policies which were recommended as either new additions or enhancements to the EU CE Action Plan, version 1.0 which could be incorporated into version 2.0 of that action plan.

In parallel to the qualitative case-studies, quantitative results were generated from the two economic actor surveys (one being a survey of producers (n=107) in multiple countries, the other a stated preference survey of consumers (n=600) in the 3 largest EU economies (Germany, France, UK)).

Lastly, a dedicated circular economy higher education module has been designed and incorporated into ESCP business school’s curriculum to assist the leaders of tomorrow in understanding circular concepts and business models. These materials will be made available to other high education institutions, so that they can be adapted to their CE curricular needs.
Until now, successful CEBM had not been studied with the breadth and depth demonstrated by R2π, deploying in the process a host of analytical tools. R2π was not a desk-top study but an interactive approach to the case-studies, encompassing a close dialogue with the enterprises around inflection points of their business models and enabling a narrative of the CEBM journey undertaken by their organisations.

R2π’s circular business guidelines offer ‘how-to’ guidance into engaging into CEBM spanning both business models as well policy aspects. These guidelines may be easily navigated on the R2π website, exploring along the way, the case-studies by sector. Moreover, R2π may be the first CE study that tightly integrated business models as well as policy in a coherent, single package for all of the priority sectors mentioned in the EU CE Action plan as well as transferred that knowledge to the next generation of business leaders through education. There have no doubt been other important studies on the Circular Economy up until now but few or none have created an integrated dialogue between business and policy and for the most part have focused on individual materials, products or single sectors.

In the course of R2π, beyond the 22 case-studies and 6 policy packages, some 41 stakeholder meetings, 20 workshop- and collaborative events were organised, 3 academic papers were published and 10 conference papers were presented. Many more academic and conference papers are anticipated. Thus, a broad range of stakeholders has been able to gain insight into the potential of CEBM and how to redesign towards more sustainable and circular models.
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