We need a clear policy framework with relevant and specific Government support to make the step change toward a circular economy. And we need a stronger framework than we currently have; there is danger in simply leaving the market to work it out for itself. Not just my words but also those of representatives from a range of industry sectors at a workshop DS Smith held earlier this year.
Overall the enabling conditions required to help businesses and organisations make the move towards a circular economy need to be a combination of regulations and fiscal measures. Only these will help shape the circular and shrink the linear model.
Legislative and fiscal measures should adopt a ‘carrot and stick’ approach. Positive encouragement of sustainable practices is just as, if not more, important than negative persuasion.
We’ve seen how effective landfill tax has been in creating a huge shift away from landfill to recovery. Nowadays people look at more cost-effective solutions, such as recycling and reuse, to deal with their materials and get better value for them. Adopting a circular mind set can help to achieve zero waste, reusing or recycling valuable resources.
Increasing landfill tax and introducing an incineration tax would do much to highlight the true value of resources as well as considering tax rebates on goods made from recycled content.
Legislation
We need to review existing legislation and regulations, particularly those that are causing barriers to progress. This includes anti-competitive legislation that makes it difficult for companies to talk across different sectors on a European scale and manufacturers looking to share more information across the supply chain. Competition law is hampering industry collaboration that could build on improving the circular economy.
Measures to help with financial processes are also causing problems, with some companies falling foul of leasing arrangements as set under the Financial Conduct Authority regulations. This all needs to be compatible and not hinder future growth. Policy makers will need to review financial regulations ensuring they keep abreast as new business models develop, particularly on the leasing and rental side.
I see these as blocks keeping us away from meeting zero waste commitments that can help us realise a circular economy.
But there are positive aspects, particularly on the collaborative side, which the Ellen MacArthur Foundation and other organisations have clearly demonstrated recently. Neutral facilitators can help overcome concern and build up trust between sectors within the supply cycle, especially those that have not worked together before. Having BIS (Department for Business, Innovation & Skills) as the main government department could act as a positive role here.
Experience
And we should make the most of sharing systems and processes that work already; the sharing experience is central to how the circular economy will function.
The perception of a circular economy and the benefits it can bring is still under discussion. Talk to people from different industries and it will mean different things to each one of them. There needs to be clear understanding of how companies in different industry sectors can benefit from the circular economy and which the best model is to implement.
As one delegate to our Supply Cycle Think Tank workshop we ran earlier in the year stated: “The perception is that the circular economy is very difficult but years ago recycling was perceived to be very difficult but now is seen as common place. The perception is that it is a lot harder than it needs to be. It’s just about doing business in a slightly different way and sharing experiences so we can learn how best practice can practically be achieved.”
Register for free to comment