Circular economy plan neglects corporate buy-in at its peril

Sustainability experts say the Victorian government’s circular economy strategy will sink if not opened up to business and innovation sectors as an economic development plan, rather than a narrowly-defined waste management issue.

A circular economy is one aimed at reducing the environmental impacts of production and consumption and gaining more productive use from natural resources.

RMIT University’s Professor Scott Valentine and Professor Usha Iyer-Raniga say the strategy currently under development presents a once-in-a-generation opportunity to align resource efficiency, eco-innovation, behaviour change and waste management in the Victorian economy.

“What is decided now will shape government policy programs in this area for the next 10 years,” Valentine says.

But after following the government’s draft proposal closely and participating in this month’s strategy feedback workshops, they fear the urgency of the current recycling crisis has skewed thinking and that the right players are not being included to achieve a result.

Valentine says a circular economy strategy is more than just a recycling strategy: recycling focuses on waste, while circular economies focus more comprehensively on resource efficiency throughout the system.

“If we try designing a circular economy strategy with a recycling frame of mind, as is currently the case, essential elements will become neglected and corporate uptake jeopardised,” says Valentine.

“If implemented correctly, a circular economy strategy will enhance corporate profitability, reduce resource costs, make Australian industry more competitive and create new business and new jobs.” 

The RMIT CE Hub engages with corporations on a regular basis to help them identify highly profitable resource efficiency strategies. 

“Business people typically come away from our discussions shocked at the savings and revenue side opportunities that they have been missing,” says Valentine.

“In short, the circular economy needs to be approached as an economic development strategy and connections need to be made with R&D hubs like we have at RMIT. Failure to do so will discourage corporate buy-in and the initiative will underperform.”

Iyer-Raniga says environmental ministries have an important role in circular economy strategic development. However, a look at how other leading nations are going about it shows these ministries seldom carry the torch alone, as is the case in Victoria.

She points to Denmark’s Strategy for Circular Economy, which is branded as a co-creation of Denmark’s Ministry of Environment and Food and it’s Ministry of Industry, Business and Financial Affairs.

Similarly, Holland’s National Circular Economy Strategy is dubbed a government-wide effort and is prefaced with co-endorsements from The Minister for the Environment and The Minister of Economic Affairs.

“As the Danish and Dutch experiences in circular economy planning show us, it is not only about diverting tins of soda away from landfills, it is about new innovations and new strategies for producing and consuming goods and services,” she says.

“It requires both innovations to alter business models and corporate buy-in to foster results.”

Valentine said the crux of the concern right now is that the government is drawing on the stakeholders that it has historically worked with in waste management.

“But most of the players in waste management already understand circularity: this is preaching to the converted. What the Victorian government needs to achieve is industry buy-in. This means that Victoria’s industry associations, leading firms, entrepreneurial innovators and members of the financial community need to be front and centre in policy discussions,” he says. 

“Moreover, universities need to play a far greater strategic role in helping firms to cost effectively tap innovation potential.” 

See an earlier piece on this issue by Iyer-Raniga and the RMIT CE Hub here.

Story: Michael Quin

Originally published on RMIT News.