The eternal circle
Reading time approx.15 min. The eternal circleHow a circular economy may save the climate, secure raw materials and turn us into happy wasters.
„Pollution is nothing but the resources we are not harvesting. We allow them to disperse because we've been ignorant of their value.” R. Buckminster Fuller, architect, designer and visionary (1895–1983)
At the beginning of this story is a circle. A round hole that is drilled in the ground on some end of the earth or other to get raw materials – a metal, a fossil fuel, a rare mineral – out of the earth. The raw material is then transported away, processed, sold, used and then recycled or burned. This is how the materials cycle works in our industrial society. Naturally, it’s not really a cycle, but a one-way street that starts at a hole and ends at a landfill. And because it's that way, more and more people who drive the economy are contemplating a genuine alternative.
At first it was individual eco-pioneers, then established companies, such as automaker BMW, real estate specialists Drees & Sommer, and Ruhrkohle AG, seeking to tap into the concept of a circular economy. That’s an enormous task. Because the circular economy stands for far more than resource conservation, more efficient production processes and higher recycling rates. In a genuine circular economy, cars, houses, packaging and clothing are designed to be transformed into new products at the end of their useful lives.
Old to new. Reclamation instead of downcycling. A circular economy instead of a trash economy:It’s not just an ecological necessity, but also a promising business model. In a circular economy alone, economists see revenue potential of €4.5 trillion by the year 2030.
How do we get there? How realistic is it to turn our economic one-way street into a roundabout? What might we gain along the way, and what will we have to leave behind?
A route description in six stages.
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Text: Harald Willenbrock
Harald Willenbrock, a Hamburg-based copywriter and author, is a member of the brand eins editorial team, a co-founder and co-managing editor of outdoor magazine WALDEN, an author at GEO, A&W, NZZ-Folio, and others, as well as a corporate copywriter for brands such as BMW, Duravit, Porsche, and COR.
Plant a cherry tree
Stage 1Plant a cherry tree
It's been almost 20 years since architect William McDonough and chemist Michael Braungart published a book called “Cradle to Cradle: Remaking the Way We Make Things”. Their cradle-to-cradle approach was a radically alternative model to the conventional cradle-to-coffin mindset. The authors replace the formula “take, consume, dispose” with the principle of “take, consume, take, consume”. Trash would be history, and waste would no longer be waste – resources would be seamlessly reused again.
“We would no longer be consumers of televisions, washing machines or cars, but users,” postulated Braungart, a former Greenpeace activist and founder of the EPEA environmental foundation in Hamburg. “All these materials can be designed so that they go into the cycles without loss of value, and people can use them lavishly.”
The two authors’ economic model is based on the life cycle of a cherry tree: That of an organism that can lavishly shed leaves, fruit and pits every year, because new life arises from all of it. And with all this, it also nourishes microbes, plants, people and soil organisms.
“Cherry tree economy” may sound esoteric, but it reflects a down-to-earth insight: Our planet's resources are finite. And so is the amount of waste we can dispose of. It’s clearly time to change course.
Recognize the necessity
Stage 2Recognize the necessity
This realization has seeped into development departments and executive suites. “The effects of unsustainable business are already being felt in the form of resource shortages, raw materials prices and climate change. Legislatures, society and the capital markets are increasingly demanding more sustainable business practices. For companies, the transformation is also a chance to position themselves in the sales and labor market of the future,” says Paul Matausch, circular economy expert at MHP. “More and more companies are rethinking things,” adds his colleague Nikolas Bradford.
“And not only as an end in itself. With the circular economy approach, companies can gain access to completely new product genres, fields of business, customer groups and markets.” Markus Diem, office administrator of Michael Braungart’s EPEA GmbH helps companies and communities change over to the circular model:“Since last year, we’ve had a huge number of queries. It’s no longer about solutions for individual products, but about complete restructuring of companies.” Right now there are actually a couple of economic pressures that are bringing ever more company leaders to rethink their business model.
Supply bottlenecks: During the COVID crisis, many companies have had to constrict or even stop production due to lack of raw materials and supplier parts. The estimated damage to the German economy this year alone: €25 billion. In the future, with closed cycles, producers will be able to reduce their dependence on insecure raw material sources and fragile supply chains.
Resource shortages: Raw materials such as lithium, cobalt and platinum are already scarce now – and will be more so in the future. Those who merely use them, instead of consuming them, free their companies from price and demand fluctuations.
Climate protection: Reuse of raw materials saves enormous amounts of energy used and carbon dioxide created during their extraction, refinement and disposal. “For us, CO2 emissions can only be significantly reduced if we also transfer our raw materials flow into cycles,” says Justus Löbler at BMW, which has declared the circular economy a strategic corporate goal.
Seen this way, the cherry tree approach is really a no-brainer.
Resource shortages: Raw materials such as lithium, cobalt and platinum are already scarce now – and will be more so in the future. Those who merely use them, instead of consuming them, free their companies from price and demand fluctuations.
Climate protection: Reuse of raw materials saves enormous amounts of energy used and carbon dioxide created during their extraction, refinement and disposal. “For us, CO2 emissions can only be significantly reduced if we also transfer our raw materials flow into cycles,” says Justus Löbler at BMW, which has declared the circular economy a strategic corporate goal.
Seen this way, the cherry tree approach is really a no-brainer.
Jump the hurdles
Stage 3Jump the hurdles
Astonishingly, however, in the almost two decades since Braungart's book was first published, only a few hundred cradle-to-cradle products have come on the market. A total of 160 of them can boast the “gold” certificate of the “Cradle to Cradle Products Innovation Institute” in San Francisco, which certifies C2C conformity. In Germany, these flagship products include the C&A jeans line, Wolford underwear, “Frosch” brand cleaner refill packs, and an automotive clutch from supplier ZF Friedrichshafen. Most of these are prototypes, niche or prestige products. None of them have taken hold on the mass market so far. So far, cradle-to-cradle has remained a niche phenomenon. Why?
Stephan Schaltegger, professor of business administration at Leuphana University in Lüneburg, sees a major hurdle in the high entry requirements. To develop products and processes for a C2C usage cycle, companies have to invest a lot in materials research and process development – an investment that hardly pays off. Besides:“Wherever something needs to be produced in large quantities, C2C hits the wall,” the sustainability expert says. “Not everything that benefits the environment in small quantities does the same in large quantities.”
For Hamburg designer Carsten Buck, CEO of the Mutter creative agency, the circular system holds still another design fault: freedom to have fun. “The C2C concept considers the biological and technical cycles, but the human being doesn't figure in at all,” says Buck. “For a design to be widely accepted, it has to uplift people and bring them joy.” Buck, who completed C2C consultant training at the EPEA institute in 2011, has since become sobered regarding the prospects. “Our company, its production processes and managers are just not ready for a circular economy. The openness to fundamentally rethink processes and products is underdeveloped.”
Prepare the ground
Stage 4Prepare the ground
A company that’s really serious about the circular economy has to commit itself to completely different purchasing, production and product development processes. It has to develop product design that thinks of reuse at the very first steps of development. It puts its customer relationships on a different basis – suddenly customers will not be purchasers of products, but users who employ raw materials in the products for a while and then return them to the cycle. Consistently implemented, the cradle-to-cradle vision means nothing less than a revolution for the company. “The conversion of linear processes to a circular economy is indeed an enormous task,” says MHP consultant Bradford. “It’s nothing an organization can do as a sideline. And the larger and more established the company, the more complex the task is. Nonetheless, it's no longer a question of whether the transformation is coming, but of how it succeeds.”
How complex the switch to a roundabout will be can be seen in the complex procurement process alone. For example, a company like Volkswagen gets more than 75 percent of its goods and services from suppliers, calculates Professor Michael Essig, procurement expert at Munich's University of the Federal Armed Forces. This means that: “If you buy a €30,000 Volkswagen, you’re spending €22,000 on supplier services and thereby the car manufacturer's global supply chain.
Assuming that a multinational conglomerate like Volkswagen has 5,000 direct suppliers, each in turn employing 500 subsuppliers, at the first two stages of the value creation chain alone, 1,250,000 suppliers are involved in production of a vehicle.” And such a value creation chain, says Essig, “can easily involve 15 or more stages.” For a leather seat cover, for example, this ranges from a South African cattle breeder and a cattle feed manufacturer in South America, includes intermediate slaughterhouses and tanneries, special companies for processing and sewing the leather, and finally the VW line worker who one day installs the completed leather seat into a Golf.
If Volkswagen were to convert to a circular economy, all these suppliers would have to be integrated into a cyclical raw materials system or replaced with C2C-compliant suppliers – a nearly impossible task. This, in turn, explains why the cradle-to-cradle principle has so far only succeeded in smaller organizations for individual production lines and departments. But this could change soon. The concept is taking hold even in established companies.
Blaze the trail
Stage 5Blaze the trail
Example: Drees & Sommer:“Fifty percent of raw materials volume worldwide is used by the construction industry, and 60 percent of waste volume comes from the building sector,” explains Dr. Matthias Heinrich, “This makes it clear that there is enormous potential in construction.” Heinrich is team leader at C2C pioneers EPEA GmbH, which has belonged to consulting company Drees & Sommer since summer 2019. In recent years, these real estate experts have developed a “Building Circularity Passport” in regard to materials, which is to accompany real estate for its whole life. Among other places, it has been used for the wood hybrid construction “The Cradle” in Düsseldorf, the new OWP12 office building in Stuttgart, and the cradle-to-cradle inspired RAG main administrative building in Essen. The goal: To convert buildings into long-term raw materials depots whose materials can one day be used for new construction instead of polluting landfills as building rubble.
Example: BMW Since summer 2020, the Munich automotive manufacturer has had the circular economy as a strategic corporate goal. “Anyone who wants to use our earth's scarce resources for their business model will need good reasons for it in the future,” says BMW chief Oliver Zipse. The “New Class” generation of BMWs, which will start rolling out in 2025, will therefore be produced according to the “secondary first” approach from recycled steel, plastic or aluminum. The company even sees spent batteries from its e-vehicles as a “highly interesting source of raw materials,” says Löbler. They could be secured in the future through redemption premiums, for example.
“For us, CO2 emissions can be significantly reduced only if we also move our raw materials flow into cycles,” says Justus Löbler of carmaker BMW, which has declared the circular economy to be a strategic company goal. At IAA 2021, they presented the iVision Circular recyclable concept car, which is made of 100 percent used material and renewable resources.
Close the circle
Stage 6Close the circle
However, says Löbler, automobiles are a long-term product with an average useful life of 18 years. “What we put on the roads in the New Class in 2025 won’t show its real effects until 2040.” This is one of the reasons the path to a consistent circular economy will be a long one for companies. In coming years, hybrid paradigms will presumably take over first: individual company divisions or spin-offs will test circular economy concepts for specific product lines or business models. Their experiences and successes will then determine whether the entire corporation will take the plunge – or not.
“The advantages are plain to see,” says design consultant Buck. “An organization that switches to the circular economy not only becomes greener and more sustainable, but also more resilient.”More stable customer relationships, a more secure raw material supply, lower energy consumption and a more loyal, convinced workforce – everything that will make production organizations more crisis-proof in the future is a side effect of circular business.
The question of whether it's worth the expense ultimately points to ourselves. How do we want to work, consume and produce in the future? Whatever the answer ends up being: Everything we send into the world will end up coming back to us.
That's how the circle closes.
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The eternal circle
„Pollution is nothing but the resources we are not harvesting. We allow them to disperse because we've been ignorant of their value.”
Old to new. Reclamation instead of downcycling. A circular economy instead of a trash economy:
How do we get there? How realistic is it to turn our economic one-way street into a roundabout? What might we gain along the way, and what will we have to leave behind?
A route description in six stages.
Plant a cherry tree
“We would no longer be consumers of televisions, washing machines or cars, but users,” postulated Braungart, a former Greenpeace activist and founder of the EPEA environmental foundation in Hamburg. “All these materials can be designed so that they go into the cycles without loss of value, and people can use them lavishly.”
“Cherry tree economy” may sound esoteric, but it reflects a down-to-earth insight: Our planet's resources are finite. And so is the amount of waste we can dispose of. It’s clearly time to change course.
Recognize the necessity
“More and more companies are rethinking things,” adds his colleague Nikolas Bradford.
“Since last year, we’ve had a huge number of queries. It’s no longer about solutions for individual products, but about complete restructuring of companies.”
Jump the hurdles
“Wherever something needs to be produced in large quantities, C2C hits the wall,” the sustainability expert says. “Not everything that benefits the environment in small quantities does the same in large quantities.”
Prepare the ground
This means that: “If you buy a €30,000 Volkswagen, you’re spending €22,000 on supplier services and thereby the car manufacturer's global supply chain.
But this could change soon. The concept is taking hold even in established companies.
Blaze the trail
Example: Drees & Sommer:
Example: BMW
“For us, CO2 emissions can be significantly reduced only if we also move our raw materials flow into cycles,”
Close the circle
“The advantages are plain to see,” says design consultant Buck. “An organization that switches to the circular economy not only becomes greener and more sustainable, but also more resilient.”
The question of whether it's worth the expense ultimately points to ourselves. How do we want to work, consume and produce in the future? Whatever the answer ends up being: Everything we send into the world will end up coming back to us.
That's how the circle closes.