Policy attention to circular business models is increasing, with the EU’s 2020 Circular Economy Action Plan forming one of the building blocks of the European Green Deal. Localised solutions under the umbrella of circular business initiatives are developing around the world. What challenges and opportunities does this shift towards sustainability present for academia and for businesses?
To kick start the year of 2022, the research project Futuring Sustainable Nordic Business Models organised the ‘Circular Economy and Corporate Sustainability’ seminar, a three-day virtual event (10-12 January 2022) focussing on how to achieve corporate sustainability in transitioning to a circular economy.
Here are our top three lessons learned from the seminar.
- Sustainable circularity must do a better job of connecting the welfare of people to the welfare of the environment
Discussions of circularity are too often linked to environmental concerns only. As Sarah Cornell, Associate Professor at the Stockholm Resilience Centre reminded us, circular economic policies should remain open to conceptual and empirical scrutiny. A circular economy that develops in spite of or to the disadvantage of citizens is bound to fail. Drawing on research undertaken together with co-authors Tiina Häyhä, Celinda Palm and Eléonore Maitre-Ekern, Cornell highlighted the pitfalls of an overly technical approach to sustainability, at the risk of neglecting the cultural, personal and political. ‘Leave no one behind’, let us not forget, is the central and transformative promise of the 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs). In this context, repair activities, for instance, are not only environmentally positive, they also often serve an important social purpose. In Oslo, several of the independent repairers, whose interviews formed the core of Professor Maja van der Velden’s (University of Oslo) presentation, mentioned their migrant background and how repair felt like a way of giving back to society. Community values, such as musicality, creativity, justice, are, according to Professor Alan Palmiter (Wake Forest University), the fuel of a new generation of investors that might redeem capitalism as it awakens to the planet’s own limitations as well as the needs of the global population
- Transformations in social norms can only carry us so far
‘Law is amongst society’s most powerful tools.’ With these words, Professor Beate Sjåfjell (University of Oslo), reminded us that law provides a regulatory infrastructure that forms the basis of companies’ existence. Yet reliance on soft law and lack of international regulation on corporations have allowed the social norm of shareholder primacy to dominate, also in the face of newer norms promoting sustainability. It is a combination of a reformed regulatory framework and changes in social norms that plays a critical role in offering incentives for businesses and also mandating that they adopt more sustainable practices. For instance, Professor Taina Pihlajarinne (University of Helsinki) highlighted the role of the law in overcoming damaging social norms with Europe’s current endeavour to do away with planned obsolescence. Mass consumption is, after all, a social construct we inherited from the Great Depression.
Further, Ina Obernosterer and Erika Thunstedt, who wrote their Master thesis (Mälardalen University) using the textile company Houdini as their case study, showed that engaging consumers is key in moving towards a circular business model based on rental, repair and reuse. But if we want to scale up the circular economy, one cannot rely solely on industrial leadership. The need for a strong legal framework is unavoidable. The great challenge in the sustainability transition? Overcoming siloed approaches to law making, and embracing the complexity of the natural and the human world. Assistant Professor Julia Hörnig proposed that the introduction of an ecological duty of care in EU’s forthcoming sustainable product policy would be a step in the right direction.
- Collaboration is key
Many speakers highlighted the potential for focussing on collective actions to bring about novel ideas and changing values. As an example, collaborations between incumbents and entrants has led, according to Professor Birthe Soppe (University of Innsbruck) and her co-author, doctoral researcher Hannah Schupfer, to new opportunities for young entrepreneurs as well as for opening established companies to working within a more sustainable framework. A finding most relevant to doctoral researcher Ines Junge (University of Oslo) and Associate Professor Yangyang Zhao (University of Oslo), whose research on ‘sustainability entrepreneurship’ show that designers are increasingly motivated to create sustainable products and services and transform them into viable startups.
Another powerful example of the need for changing paradigms came from Sigurd Vildåsen (NTNU and SINTEF) and Oda Ellingsen (Kongsberg) who presented the concept of coopetition and its potential in addressing tensions in the development of circular business models. Rather than relying on classical models of competition, coopetition proposes to involve actors from the whole value chain and work together to achieve collective outcomes.