Towards a Circular Economy

circular economy

In a recent interview EU Environment Commissioner Januz Potočnik stated that the European Union is en route to the circular economy. A step which he described as being essential in ensuring the EU’s competitiveness.

The circular economy, in contrast to the linear economy is one which respects nature and seeks to utilise the earth’s resources in a sustainable manner.

The linear economy is based on a take-make-waste model, extracting raw materials from the earth and dumping the resulting waste after use.  This is a cradle to grave path for raw materials. The EU’s waste management strategy in conjunction with its Roadmap to a Resources Efficient Europe seeks to decouple the generation of waste from economic growth thus nudging the EU towards a new path: one of green growth.

This is also the basic philosophy of the Waste Management Strategy proposed by the Environment Ministry in Malta and currently subject to public consultation.

Malta’s proposed Waste Management Strategy advocates a policy of waste minimisation, that is, we must make an effort to avoid use of resources whenever possible. In addition it then advocates recycling the waste which is generated. This is done by tackling different waste streams in a manner most appropriate to the materials used in that specific stream. 2050 is the Malta target for achieving a Zero Waste society. An achievable target only if we get down to business immediately.

Waste separation is  an essential prerequisite in order to ensure that effective recycling takes place.   As a result of recycling, the waste from a specific product or process feeds a separate process. This is the manner in which nature functions. Have you ever noted how a tree sheds its leaves? How these leaves slowly decompose and nourish the soil, micro-organisms, insects and plants and actually feed the surrounding eco-system?

We have a lot to learn from nature. Biomimicry, imitating nature, is in fact a branch of study which seeks to apply nature’s lessons to solve many modern day problems. Discarding our throwaway attitudes is one such basic lesson.

Modern manufacturing is characterised by a cradle to grave design. It is the result of a society accustomed to throw away products once their useful life ends.

Applying nature’s lessons hence signifies manufacturing products whose life cycle is no longer one which leads from the cradle (production) to their grave (disposal). Instead of being discarded at the end of its useful life a product gives birth to something else through recycling. Just like nature does when dealing with the tree’s leaves. The cradle to grave cycle needs to be transformed into a cradle to cradle cycle.

This obviously has an impact on the manner in which products are designed.  In their  book  Cradle to Cradle, remaking the way we make things, American Architect William McDonough and German Chemist Michael Braungart explain that life cycle thinking, instead of filtering out the undesirable substances and toxins in a product at the end of the manufacturing process filter them out at the beginning, that is on the drawing board.

A waste management strategy which is based on a resource management approach is linked to these long term aims. It is a long process but one which is finally rewarding.

By separating our waste we facilitate its recycling. When recycling takes place we reduce the take-up of the earth’s resources and consequently avoid using the energy required to extract more resources from the earth.

All this shifts the focus from economic growth linked to activities which harm our surroundings to economic activity which enhances them. This leads to the creation of  green jobs.  It shifts our thinking to one which links prosperity with environment protection.

Resource efficiency is at the core of Europe’s 2020 strategy. It does not only mean doing more with less, that is, being eco-efficient. It requires also being eco-effective, that is ensuring that the consideration of long term impacts features in all our decisions. That means designing the present with the future in mind.

A waste management policy based on resource efficiency is an essential tool in this respect. This is just one example. Plenty of other examples can be found in appropriate policies to manage our water resources, our land use, our heritage.

All this leads back to the circular economy which is not just a green way of organising our economy.  It is a different way of life. A way of life which is not antagonistic to our surroundings but one which is in harmony with them.

This is what sustainable development is all about. It seeks to redimension the manner we think.. Having just one Earth we must realise that we cannot have another try if we succeed in ruining the present one.  There is no Plan B.

The circular economy is an adequate tool which can set us back on track.

published in The Times, Saturday November 2, 2013

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The politics of sustainable development

published on Sunday 29 June 2008

by Carmel Cacopardo

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 The government is in transit: it has declared that from now on sustainable development will be the cornerstone of its policies. However, it has not yet stated how this will come about. With regard to this issue, it cannot wait five years to implement its proposal. It must be in a position to deliver immediately.

The adoption of sustainable development as the focus of government policy should lead to the logical conclusion that the economy should henceforth no longer be viewed as an objective but rather as a tool: the economy should be at our service, rather than being our master! The point of departure should be the ecosystem of which we form part. The limited capacity of our ecosystem should lead us to adopt ecocentric policies as distinguished from the current anthropocentric ones. This is what sustainability is all about and this is what the adoption of sustainable development, as a policy objective, should lead us to. The transition from the current state of affairs to a sustainable state should hopefully address the causes of our accumulated environmental deficit!

The government is now seeking ways to live up to its declarations in favour of sustainable development, hoping that it would not have to resort to make substantial changes to existing policies. It is however next to impossible to arrest the accumulated and ever-increasing environmental deficit without addressing the policies and attitudes that have caused it. The list is quite long!

In Malta too, mainstream politics is motivated by the instant link between cause and effect. The community almost immediately feels the economic and social effects of policies and administrative decisions. Thus, mainstream politicians are generally quick to react even to a perceived impact on the economy or on the social fabric. The effects of environmental impacts are however generally much

slower, in part due to the resilience of Mother Earth. Hence, for innumerable political generations, environmental impacts were completely ignored or sidelined, as there was a time lag at times of considerable duration between cause and effect. Now the chickens are coming home to roost and further postponement is not possible. Today’s generation will have to shoulder and address the accumulated environmental deficit, hopefully reducing its effect on future generations.

Policy needs to be approached in a holistic manner, focusing simultaneously on social environmental and economic considerations. It is not a question of an artificial balance between the economy, the environment and social policy but of acting correctly, preferably each and every time. A policy, which is economically sound but socially and/or environmentally wobbly, is of no use and should be discarded. The reverse side is already common practice as socially and environmentally sound policies are rarely applied if they do not pass the test of economic viability.

I acknowledge that this is quite a hard nut to crack, as it will require revisiting practically all areas of policy. Some areas will require minor policy adjustments while others will require a complete overhaul. In some areas action has already commenced. In others, action is incomprehensible at this stage given the current prevalent mindset.

The politics of sustainable development is concerned with redirecting economic activity such that this is compatible with ecological and social requirements. The environment, the economy and social needs are thus placed on the same level when decisions are taken. Throughout the years economic decisions have generally taken into consideration their social impacts. As a result, various measures have been introduced to mitigate and/or prevent negative social effects. The politics of social solidarity as developed has assisted in the transition from a free market economy to a social market economy.

The politics of sustainable development is the means leading to the next transition: an ecocentric economy. The environmental impacts of social and economic policy require attention at the drawing board rather than mitigation after they have occurred. In order for this to occur, it is required that instead of facing the effects we direct our energies to tackle the causes. It is for this reason that the Environment Protection Act of 2001 provides in Section 8 for the setting up of a National Sustainability Commission entrusted with the drafting of a National Strategy for Sustainable Development for the Maltese Islands. The Commission has laboured between 2002 and 2006 to produce a draft, which was concluded and presented to Cabinet for approval in December 2006. Cabinet approved it late in 2007.

In the public sector, the government’s adoption of the principles of sustainable development should spur action on three levels – tackling upstream impacts, direct impacts and downstream impacts. This will necessarily filter through to the private sector that will effectively have no choice but to proceed on similar lines. The government would be leading by example.

Some time last year, the government had commenced an exercise which should eventually lead to a system of public sector green purchasing, whereby non-economic criteria are inbuilt into tender documents. This would not only entail conditions of environmental importance, but also ones of social relevance. We have not heard much on developments to date except declarations during the March 2008 election campaign, and some echoes

afterwards that when contracting-out for services, the public sector will be on the look out for the conditions of work of the employees of those who take part in the tendering process. This was stated because a miniscule part of the private sector is being very innovative when it comes to determining the manner of circumventing the acquired rights of its employees. While the government is certainly hitting the right note when it identified the rights of those employed by bidders for public tenders as ripe for scrutiny, I believe that it is well past the stage of declarations. Concrete action is urgently required.

The public sector will properly manage its upstream impacts only if it ensures that all those who supply it with goods and services do so in a manner that is socially just and environmentally responsible.

The direct impacts of the public sector are the most obvious ones. The appointment of Green Leaders in different ministries and authorities was a step in the right direction as it set the foundations for a culture change among public sector employees. It can lead to quick results (known in environmental management as the “low lying fruit”) in areas related to energy and water consumption, use of stationery, other materials and equipment and waste management among others. The appointment of green leaders can thus set the public sector on the road leading to eco-efficiency.

However, an emphasis on the public sector downstream impacts will be that which eventually could make the major difference. The effects on those at the receiving end of the public sector will not only determine “value for money” but also, more importantly, in my view, it will determine whether the public sector is eco-effective.

The first on the list would be public sector employees themselves and the effects of the fixed term contract on their morale and professional conduct. Subsequently, each policy must be examined for its ecological impact while searching for alternative methods of implementation, which would reduce or preferably eliminate its undesirable impacts.

Managing the social and environmental impacts of the public sector is of paramount importance in the path leading to sustainable development. This will involve the individual policies that need to be analysed in detail. Value for money is not the only criterion used to assess whether public monies have been well spent. When this is taken in hand the public sector would have commenced trekking on the long road of sustainable development. The first steps are the most difficult. Translating rhetoric into action is only possible if the original rhetoric is a reflection of an inner conviction.

Only time will tell.

BOV’s CSR : The next step

This was originally published on the 5 January 2008 as an article in The Times

BOV’s CSR: The next step

 

Bank of Valletta is to be congratulated on the recent publication of its second Corporate Social Responsibility Report covering 2007.

In its mission statement BOV defines its commitment as being that of playing a leading and effective role in the country’s sustainable development “whilst tangibly proving ourselves to be responsible and caring citizens in the community in which we operate”. The objective of the CSR report is hence that of informing the community as to the manner in which the bank is acting as a responsible citizen. The bank’s CEO makes this even more clear in his statement on page four of the report. In fact, he rightly underlines that while the bank is responsible towards its shareholders it is also accountable towards society.

This is the crux of CSR: the accountability of business towards all stakeholders, the community at large. Profits generated on their own are not a measure of success, as the business of business is not just business!

The bank has ploughed back into the community 1.31 per cent of its profits (Lm350,000 or €815,500) through engagement in seven pillars of activity, namely the arts and culture, heritage, environment, sports, social, education and business sectors.

In particular, BOV has assisted Heritage Malta in preserving the Tarxien Temples. It has furthermore supported the restoration programme at Palazzo Falson, Mdina.

Reading through the BOV 2007 CSR report one encounters many a positive note as to the manner in which the bank is being eco-efficient. First on the list is its Santa Venera centre which, through both design and operation, is energy-efficient. Its Marsascala branch has, during 2007, been equipped with photo-voltaic panels, thereby contributing to an annual reduction of three tonnes of CO2 emissions as a minimum. The other branches await their turn.

BOV recycles its paper and has taken the first steps which will eventually lead to a paperless administration. Furthermore, it makes use of recycled toners and cartridges, not only contributing to less waste going to landfill but also paying less eco-taxes as a result. Reducing environmental impacts has a positive financial impact too!

The BOV report does not mention the environmental impacts generated by the use of transport (by both the bank and its employees). Nor is any reference made to the use of water in its branches, including the collection and utilisation of rainwater.

BOV has also sponsored a number of environmental initiatives aimed at the environmental education of the community.

While BOV is setting a good example which should filter through the business community, this should be seen as only a first step. In addition to improving the management of its direct environmental impacts, thereby reducing them, BOV can move forward, in the process retaining its leading role in banking CSR in Malta.

BOV should, on the basis of this eco-efficient experience, move on to new initiatives that address the eco-effectiveness of the banking system. In addressing its corporate responsibilities, BOV as any exemplary citizen would undoubtedly ask whether its services are being misused. In particular, whether any of its customers have used its services to contribute towards the ever-increasing national environmental deficit.

It would be interesting if in a future report we could read about environmental criteria applied in the consideration of requests for business loans, including those utilised to finance the construction industry. Additional interesting information would be whether BOV has refused its services to any client on the basis of environmental criteria.

The financial balance sheet on its own does not measure progress. It is only concerned with profits. The environmental and social balance sheets need to be addressed too, thereby having a “triple bottom line” approach to measuring progress.

Through its 2007 CSR report, BOV has proven that it is serious about managing its direct impacts. It now needs to move further by managing its upstream and downstream impacts. Managing its upstream impacts signifies addressing the environmental impacts generated by its suppliers – hence the introduction and maintaining of a green procurement service. Managing its downstream impacts would address the environmental impacts of those using its services. When this is done successfully BOV would be eco-effective, as a result contributing to a reduction of Malta’s environmental deficit.

BOV has taken the lead. I hope others will follow because profits and principles can co-exist.