Picture the scene: a room full of executives are watching a presentation on company strategy (actually, let’s move with the times… they’re all at home, watching on Zoom). A simple, elegant image of a circle dominates the screen. Will they support the adoption of circularity principles across the business? In unison, they nod. Not only is this the right thing to do, but it’s what the rest of the market is doing. Circularity is an essential component of a forward-looking business strategy.
But in each of their minds is a nagging question… How?
Why is circularity important?
“Circularity” is a word that has become ubiquitous in the sustainability strategies of many of the world’s biggest brands, from Apple (variations of the term ‘circular’ appear 27 times in their latest sustainability progress report) to AstraZeneca. Spearheaded by advocacy groups like the Ellen MacArthur Foundation, the concept has intuitive appeal: maintaining the value invested in materials and products for as long as possible seems like good sense, given the effort, skill and resources required to produce them. It should also be good news for a planet that is running out of capacity to supply us with raw materials and soak up our waste.
Behind the elegant concept of circularity, however, is an incredibly diverse range of steps with varying degrees of applicability – and environmental benefit – in a given situation. But the need to simplify this into marketing messages and calls to action has led to Circularity becoming a buzz word, applied so broadly that it risks becoming meaningless. Companies, keen to move into this green and pleasant new vision for the economy, are looking for simple, off-the-shelf ‘cricular’ measures that they can adopt quickly – sometimes at the expense of a proper assessment of whether the approach is appropriate and truly beneficial for them, their customers or indeed, the environment.
In this blog, we look at why Circularity in context is of fundamental importance and the approach CDP takes, working in partnership to provide our clients with the best possible sustainable outcomes, instead of pushing a square peg into a circular hole…
Context is King
Take this as an example. An enthusiastic company want to generate a new beverage offering that is due to launch in an up and coming developing market – let’s call it ‘Circular Soda’… for now. They want something that has the kudos of being ‘Circular’, which seems an attractive USP for a marketing message. Time is spent identifying the right grade of rPET (recycled PET plastic); starting with a circular material in the first place seems like a great idea. But… when the brand launches with sustainable claims emblazoned on the label, it’s not long before journalists realise that this ‘recyclable’ rPET is not being recycled in practice, as there is no recovery or recycling infrastructure in this market! Context is king… had the company thought it through a ‘circular’ solution, based around recycling, is actually not the best fit for this market, even if it is perfect for other regions. Sadly, in some instances, this kind of example is not that far from the truth.
A great real-world example is our old ‘frenemy’ the plastic bag. Few are aware that this innovation in 1959 had sustainable circularity front and centre in the mind of its Swedish designer, Sten Gustaf Thulin. Sten calculated that a plastic bag that could be reused time and time again was a far more durable and far less energy intensive product than the common 1950s cotton or paper bags. He always carried his beloved innovation in his pocket, just in case he found himself doing a spot of shopping… (70 years later we find ourselves reaching into our own pockets for Sten’s reusable bag, in a consumer culture that aspires to be more circular… if only we could remember not to leave them in the car!) Unfortunately, the context that became king in the 1950s and decades following was convenience. Bags were so cheap to produce and so desirable for consumers as a disposable convenience, that Sten’s planet-positive pack has become a slur on sustainable living. This is where the introduction of filters in the process of innovation is key. What are the factors that might pervert intended circularity, and how can the design counter this?
Back in the boardroom, chief execs are still looking at the circle on the screen and scratching their heads with a killer question in mind.
How do we put circularity in context?
At CDP, our Circularity in Context model enables client teams to look at a brief through a broader lens, with the ability to consider what’s happening now as well as what will influence innovation in future, via 4 key filters that will help drive our understanding of which circular opportunities are most applicable. These filters extend far beyond the business or product itself, looking at the wider ecosystem and emerging trends that are shaping it.
- The societal filter looks at the ways in which governance and politics influence the markets our clients are operating in, and how society as a whole might embrace or reject certain opportunities due to attitudinal or legislative parameters for change. This can drive future regulation, infrastructure development, or R&D investment.
- The economic filter helps us understand ‘viability for change’ from a commercial perspective; what commercial pressures occur in the context that their brand and product is operating in? What criteria are used to appraise investments? What is the existing asset base?
- The user filter puts us in the shoes of the end users, either ‘consumers’ (B2C) or customers (B2B); how should a proposition meet their needs and does a move toward a more circular solution provide gains or create pains for them? How might their habits and behaviours have a positive or negative impact on the viability of a more circular solution?
- The technological filter is an exceptionally important one that’s often overlooked. CDP rely on a broad group of experts with deep knowledge in science and technology to determine how a ‘circular idea’ can become a technically viable reality, as well as identifying emerging technologies that could enable new business models in the future.
As much as people want to be unfettered when pursuing creative thinking on how to adopt circular approaches, these filters constitute whether a circular concept could become a viable reality for our clients. So, developing a brief with our clients for a successful outcome with these filters underpinning innovation – aiming to be circular, but doing it in context – is the key to success.
As a team of researchers, designers, engineers and innovators, we want to develop great sustainable products! Much of the focus of current efforts to embed circularity into products has focused on utilising circular materials; the leaders in the field are extending their ambition to more resilient, returnable or repairable models. A great example of the adoption of ‘game changing’ circular thinking, at different levels, now exists within the Toy industry. The first level in imporved circularity is moving from dispose to recycle; at the end of 2019 Mattel announced its goal to achieve 100% recycled or recyclable plastics in its products and packaging by 2030. New entrants to the toy market (such as Toy-Cycle and Whirli) have gone a step further and established a ‘recommerce’ platform, where outgrown toys are shipped directly to the company to be sorted, repaired, resold and returned into the system. This commercial model for a lending library – recycling parts, not materials – is perfectly in keeping with a new generation of consumers who don’t want to condemn their child’s personal plastic Toys “R” Us store to landfill, or even the recycling bin. The societal context is shifting!
However, being circular in our choice of materials and components is often only one opportunity; bigger ones might exist if we are willing to look beyond the product as it is today. We opt for a telescope before a microscope – we’re interested in the detail, but we’re just as interested in the bigger picture, where the big innovations often lie. Applying systems thinking and looking beyond circular material usage could uncover a totally new way of delivering the benefits people currently derive from the existing product.
Some entrepreneurial businesses have had a eureka moment when their context is well placed to offer them the chance to do something radical and reimagine a product, system or service altogether. With the games industry booming, (in no small part due to the current pandemic), this year it’s set to reach a phenomenal $159.3 billion in sales¹. With many asking where the potential for growth is, innovation has pivoted away from games linked to hardware formats. Inspired by smartphone innovation and leveraging an expertise in cloud computing, Google Stadia and Amazon Luna have emerged as serious challengers to established players such as Xbox and Playstation. Hardware tomorrow will be so yesterday. Brands in this new gamer age look like the style of their landing pages and the quality of their games and content, not the console or the cartridges or discs that once ran on them. By 2021 video gaming sales are due to hit the $200 billion mark; one can only imagine how the absence of hardware will increase the profit margins within this behemoth entertainment industry.
By considering the wider context around a business, and how this might change in the future, it’s possible to identify opportunities that – like in the game-changing example – offer enhanced value to customers precisely because they are more circular and less reliant on consumption of materials. As the famous quote goes, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole”!
A partnership approach
We are known for working in close partnership with our clients (it’s in the name!), but also for offering an evidence-based, independent perspective when assessing circular options and the surrounding context using both a telescope and a microscope. We believe this approach can de-risk circular innovation strategies by identifying opportunities that fit the situation, and even reimagine the product or service entirely. Circularity is definitely not one-size-fits-all – but with careful consideration of context, we think there is a circular opportunity that’s right for everyone.
1. Newzoo senior market analyst Tom Wijma