Holland Circular Hotspot

Is circular economy a business need?

12 CEO’s, founders and thought leaders from our network who are (inter) nationally known for their work within a specific CE topic share their perspectives on the transition and international opportunities looking at it from their field of expertise.

In his role as head Circular Transformation, Douwe Jan Joustra leads C&A Foundation‘s work towards implementation of circular business models in Fashion. C&A Foundation is a corporate foundation that aims to fundamentally transform the fashion industry. Together with their partners, they take collective action for the systemic challenges in the apparel industry. The Circular Fashion Program is one of C&A Foundation’s signature programs they aim to impact the apparel industry with, catalyzing positive, lasting change.

Read the sixth blog by Douwe Jan Joustra, Head of Circular Transformation at C&A Foundation ‘Is circular economy a business need?’ below!

Disclaimer: Holland Circular Hotspot publishes opinions on CE from a wide range of perspectives in hopes of promoting constructive debate about consequential questions about Circular Economy.

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"Circular economy is the economy that fits the current societal, ecological and economic needs and, importantly, it will facilitate a strong need in businesses: continuity"

Is circular economy a business need?

Over the past years, as I have travelled and met people, I can see that there is a true eagerness around the world to explore the possibilities of circular economy, to find partners and learn from current experiences. Professionals from social entrepreneurs to consultants, executives to academics from backgrounds in ranging from architecture and building to automotive, electronics and fashion, are showing starting to act.

But what I also see is that to achieve scale, collaboration is needed. No one will or can be excluded because circular economy is the economy that fits the current societal, ecological and economic needs and, importantly, it will facilitate a strong need in businesses: continuity. 

If you are interested in joining the circular economy, there are some specifics you should consider – and choose to agree or to disagree with: 

1. Shallow versus deep

When I am at conferences or other events, I can see there is much talk going on. Everyone claims they are or intend to be circular. Then again, if you listen carefully, most companies are only addressing the ambition to be better in collecting used products and, in some cases, recycle these into the new building blocks for next phases of production. They are optimising the existing situation from a waste-policy perspective. Which is important, but it is not circular economy. It takes a more ‘shallow’ approach and  lacks the ‘deep’ changes circular economy needs to address in economic models, like the new business cases. 

 

2. Leadership on optimization 

Many CEOs show interest in the circular economy. It can be because they see a new economic system dawning or just because it might optimise their existing business. As they look to address changes in consumer behaviour, societal responsibilities and stress-situations in their markets, the response is often is optimization. However, that is not enough and often seen as ‘green-washing’. But if CEOs are really going to lead us into a circular economy they need to lead. They  need to act more like entrepreneurs and examine new business models, start piloting (experimentation) and inspire their workforce to take a deep dive into opportunities. 

3. Sharing lessons from entrepreneurial experimentation 

We have seen wellknown companies experiment in the circular economy for years (light as a service, for example). Nevertheless, these testing models have yet led to the mainstreaming of change. On the other hand, we have medium-large-enterprises that  study and discuss the circular economy, but almost no piloting has started. The ones pushing pilots and in different sectors, such as the fashion industry, have mainly been social enterprises and entrepreneurs -often small-scale initiatives run by young professionals as start-ups. What we now need are more learning loops within the existing industry to give scale to such initiatives. One of the main advantages of experimentation is the collection of lessons learned: C&A Foundation is doing this with the Bridging the Gap initiative, that connects 8 different organisations piloting and working to give scale to circular fashion business models in a learning group that exchange ideas and lessons on barriers and solutions. 

4. Circular design at the essence

For a circular economy to work, we must be designing  ‘products that flow’ in order to regain the materials – basically circular design. In the case of fashion, cotton garments should be 100% cotton-made (so: no polyester stitching), and synthetic fibres should also be 100% of the same basics. That means no blended products. That would make the re-use of materials much easier for new garments and helps address the big question of how to add value without value-destruction.

5. Societal trends

Societal trends are important to recognize. Firstly, the number of consumers already into the ‘sharing economy’ is growing fast. Predictions are that the millennials generation will share as many garments as are being sold by retailers by 2022. Secondly, the group of non-conscious consumers (90%) is not ignorant. Almost all of them want to be ‘guiltfree consumers’ and, for that, they expect brands and retailers to take responsibility. Thirdly, the development of the ‘service society’ is already being seen – where consumers don’t only want the product, but also the service. Look at new market models like Uber, Airbnb, food delivery, car sharing and Spotify.  How to align the existing industries to this change? There, again, experimentation is needed.