Social Business pathing the way to a Circular Economy

Each year, the non-profit-organization Global Footprint Network estimates the so-called Earth Overshoot Day. On this day, our global consumption of renewable resources exceeds the earth’s ability to regenerate these resources within the same year. All the remaining days and months following the Earth Overshoot Day, we are basically living in a state of resource deficit, consuming more than our planet can regenerate fast enough in order to ensure a sustainable provision of resources in the long run. Back in 1971, the Earth Overshoot Day was marked on the 21st December. Last year, it was the 1st of August meaning that our global demand for ecological resources is equivalent to as if we’d have 1.7 earths to satisfy it – which we obviously don’t.

Of course, the concept of Earth Overshoot Day may have its methodological implications. But it does help to visualize one important message: If we want to ensure a decent living for both ourselves and for future generations, we need to drastically change the way we think about production and consumption. Take plastic for example. On the one hand, plastic products have helped to establish new levels of hygiene, health care and comfort in all parts of the world. On the other hand, worldwide plastic production has doubled within the last 20 years and is expected to again quadruple by 2050 – the same year in which, according to a study supported by the Ellen MacArthur Foundation, there might be more plastic than fish in our oceans.

One possible answer to the problem of an unsustainable use of our natural resources and a respectively increasing waste production lies in the concept of a Circular Economy. Today, most of our national economic systems as well as transnational trade basically follow the same linear mindset of “Take, Make and Dispose”. If the sweatshirt, light bulb or smartphone you bought a year ago starts to fall apart, you probably dispose of it and buy a new one, happily supported by the fashion or electronics industry. Our current linear economy which is ascribing economic success mainly to the generation of sales and profits that are expected to increase year by year, paired with a constantly increasing global population, inevitably leads to annually increasing rates of production, consumption and – you guessed it – waste in basically every industry.

Addressing both the ultimate limits of a linear economic system as well as the potential that still lies in the sweatshirt, light bulb or smartphone you just got rid of, a Circular Economy treats resources the way they actually are: finite in their extraction, but almost infinite in their possibility to reuse. Following a paradigm of “Make, Consume, Enrich” of biological material or “Make, Use, Return” of technical material, a Circular Economy aims at creating economic value by reusing the goods of today as the resources of tomorrow. Thereby, the Circular Economy both empowers and requires a mindset that is able to rethink today’s patterns of product design, logistics and ownership in order to provide solutions for a future world without waste.

But how can the theoretical concept of a global Circular Economy, which is full of promising scenarios of a future without waste but not seldom lacks specific examples for their practical success, be implemented in the real (business) world out there?

Well, one way of putting the Circular Mindset into practice is the concept of Social Business which was initiated by Nobel Peace Prize Laureate Prof. Muhammad Yunus. Based on 7 principles, Social Businesses aim at overcoming social or environmental problems by using the creativity as well as the tools of traditional businesses and entrepreneurship. Due to their hands-on mentality with regard to social and environmental issues, their financial and ecological self-sufficiency as well as their creative re-thinking of products and services, Social Businesses in many cases provide inspiring examples for the practical implementation of a Circular Mindset. This implementation of a Circular Economic paradigm through Social Business mainly reveals itself in three different ways:

In developing countries, the development of a sufficient infrastructure of waste disposal, collection and recycling is a priority in the transformation process to a circular economy. With regard to the widespread insufficient organization of such an infrastructure through the state, informal waste workers and Social Business entrepreneurs provide important waste collection and recycling services in many developing regions. Social Businesses do not only directly address the issue of plastic waste and marine litter but at the same time also provide more dignified and better paid working conditions for their employees thus empowering waste pickers and informal sector workers.

In industrialized countries, Social Businesses actively promote the transformation towards a Circular Economy by focusing on the prevention of waste along the entire value chain. Using the abundant technological and infrastructural possibilities of industrialized countries, Social Businesses actively implement a Circular Mindset by redesigning products and their packaging, by reorganizing supply chains, substituting artificial by decomposable raw materials and offering products made for reuse instead of single use. Social Businesses create circular economic patterns by developing products that can be disassembled, repaired, reused or – at the end of their life cycle – recycled ecofriendly.

Besides a sufficient waste management infrastructure and a transformation of values chains towards a state of zero waste and 100% regeneration, the implementation of a Circular Mindset through Social Business is also presented by a radical shift in the way we think about the ownership of products. As the sharing economy is thriving, the transformation towards a Circular Economy triggers the substitution of purchasable products by respective services in many industries. Instead of buying a light bulb for example, you may pay for the service of providing you with light. While the products remain the property of their manufacturer, the company takes care of their installation, repair, replacement and re- or upcycling. This way, you as a customer no longer have to deal with the upset about malfunctioning products you just recently spent money on or the disposal of them, while the company is able to maintain ownership over its valuable resources.

In order to achieve circular economic patterns and business models on a global level, large corporations and entire international industries need to redesign their products, logistics and value chains. However, to be able to do so, both economic and political stakeholders first and foremost need to adapt something most Social Business entrepreneurs already have rooted deep inside them: a Circular Mindset. Only by leaving linear economic paradigms behind us and by adapting a circular way of thinking into our economic models and business operations, we will be able to postpone the Earth Overshoot Day back to where it belongs: at the very end of a year.

 


 

In order to accelerate the transformation towards a Circular Economy and to tackle environmental issues such as plastic pollution, deforestation or the emission of greenhouse gases through Social Business, The Grameen Creative Lab officially launched the Yunus Environment Hub during the Social Business Day on June 28, 2019 in Bangkok. The Yunus Environment Hub is an initiative to raise awareness for the urgency to act upon the environmental crisis and to support the creation of Social Businesses that address environmental issues.

 

Write a comment