[World Bank] Circular Economy and Private Sector Development Learning Series

Circular Economy and the Private Sector

“Many companies have already embraced circular economy principles in their operations.”

System shocks tend to compel the private sector to reimagine the future of business, innovate, assess supply chains, and create value in the midst of uncertainty. This shift has been well documented under COVID-19 and will continue to be felt as the world tackles the Earth’s planetary boundaries. A circular economy – centered on principles that economies can be regenerative by design, retain as much value from products and materials, and simultaneously mitigate the climate impacts associated with manufacturing – can likewise help the private sector recover the US$4.5 trillion wasted in the current take-make-waste consumer model. 

In this inaugural session of this learning series on ‘Circular Economy and Private Sector Development’, we invite global leaders and practitioners invested in a private sector-led transition to a circular economy, explore questions of its economic viability, contribution to resilience, and impact on applicable Sustainable Development Goals.

Circular economy and climate change

“A transition to the circular economy will help us effectively tackle climate change.”

There is an urgent need to move from the predominant take, use, waste linear economy towards a regenerative circular economy – particularly in light of the many national and corporate pledges toward achieving net-zero carbon emissions by 2050. To date, much of the decarbonization discourse has revolved around the energy sector, rather than on material opportunity. It is time to recognize and react to the fact that 70 percent of GhGs emitted are directly linked to material handling and use.  

In this session of the Learning Series, we explore the dematerialization and decarbonization challenges and opportunities to reduce GHG emissions, leverage low-carbon policies, and enable private-sector circularity in key industrial (and complementary) sectors and business innovations around the world. The expert panel includes practitioners, academics, and leading global voices. 

Eco-Industrial Parks

“Integrating circularity into industrial parks requires new technologies and business models.”

Eco-Industrial Parks (EIPs) are an effective approach to achieving a circular economy and increasing the competitiveness of firms and industry sectors. Greening the supply chain and alleviating resource constraints, waste and pollution through circular economy practices, can lead to improved resource management, resource conservation, and reduced climate impacts, consequently paving the way for a more competitive industrial ecosystem.

This session aims to address how EIPs are used as a tool to enhance the circularity of depletable resources at industrial parks by introducing new business models and habitual behavior change to alleviate dependence on those resources consequently creating a positive contribution to climate action. It also touches on how EIPs create an enabling environment to replace fossil fuel with renewable energy resources and bio-based fuel, transform waste into energy, raw material, and by-products, and strengthen infrastructure capability for sustainable utilization of potable water and recirculation of wastewater. In turn, and in line with circular economy goals, EIPs help achieve more cost-efficient production processes that are resilient to price fluctuations and resource scarcity.

Circular Economy and Plastics

“The plastics sector is due for a reboot, driven by circular and sustainable principles.”

Plastic is durable and malleable, among its many attractive qualities that are well-suited for continued reuse and re-circulation in a closed-loop system. Yet, we live in a mostly linear economy where plastics, as a material, are a prime example of risks and dangers associated with a non-organic or technical material leaking into the natural environment. 

In this session, we explore how and why the plastics industry is at a watershed moment, as regulators and buyers are moving in favor of circular solutions to mitigate the plastics waste crisis; beyond the environmental impetus, the economic opportunity is massive. Speakers discuss how players that move ahead and innovate, be it in scaling reuse/recycle models or adopting alternative materials, stand to gain greater market share and consumer acceptance. Those that do not could lose their societal ‘license to operate’ or face negative repercussions from tightening regulation. 

Circular economy and tourism

“Tourism can and should be more sustainable and circular, especially now.”

The tourism sector is a generator of jobs and income but without proper systems in place, tourism can consume large quantities of energy, water, and plastics which degrade the environmental quality of coastal destinations and ecosystems and affect the lives of residents. New and circular business models are needed to change the way tourism operates and enable businesses and destinations to be sustainable. The COVID-19-related tourism pause is an opportunity to rethink, refocus, and reimagine how the tourism sector can build a better and more circular economy tourism system for the future.      

This session brings together policy-makers and leading private sector stakeholders to discuss the needed transition to circular business models and explore approaches to operationalizing a circular tourism economy in a post-COVID world.

Circular Economy and Food

“The food and agricultural sectors are extremely wasteful and need to be reimagined.”

A fundamental transformation in our most critical sectors, particularly the food and agriculture industries – whereby current practices throughout the value chain have resulted in systemic inefficiencies, losses, and waste – is urgently required. Applying a circular approach to the food sector – from agricultural production, processing, and manufacturing facilities, to transport and distribution, retail outlets, and household consumption – can result in positive impacts at the economic, social and environmental levels.    

In this session, Circular Economy and Private Sector Development Learning Series, we explore the challenges and opportunities inherent to this critical sector and tackle topics from the manufacture of bioproducts, food losses, and waste, to regenerative agricultural systems, and strategic investments. The expert panel also sheds light on examples of effective policies being implemented worldwide to enable innovation, dematerialization, and greater efficiencies in the food production processes.  

Circular Economy and Finance

“Significant and more innovative financing is required for a circular future.”

The global economy is placing severe pressure on our planet and is pushing through our planetary boundaries. There is an urgent need to move from a take, use, waste linear economy towards a regenerative ‘reduce, reuse and recycle’ circular economy. This requires a fundamental transformation not only of the private sector’s businesses and value chains but also of the financial sector which plays a critical for financing businesses with circular ambitions. Currently, the financial sector is insufficiently equipped for financing circular businesses – including start-ups, SMEs, and corporates. Despite some very positive recent developments (e.g. ESG guidelines, EU green taxonomy, impact investment), there is a need to further transform financial sector policies and regulations, as well as the incentive structures and mental maps of its players.     

In this session, we explore, alongside global leaders, the critical issues that can inform policymakers and stakeholders within the financial sector. We explore, on the one hand, circular financing needs through the lifecycle of a business where start-ups, SMEs, and corporates have different risk profiles. On the other hand, we explore the capabilities and constraints of finance providers such as venture capital capitalists, banks, and institutional investors, as well as the role of government. Examples of issues discussed include the lack of risk capital for early-stage finance, a lack of understanding of circular business models, eligibility issues of collateral, and valuation techniques of residual value. 

Circular Economy and Critical Materials

“The circular economy will have a crucial role in meeting future demand for minerals. “

At least 30 raw materials have been identified as critical due to their importance for key sectors in the global economy). Some metals and minerals have a high-supply risk due to the dependence on imports and a high level of concentration in particular countries,  scarcity of (viable) substitutes, and  very unique and reliable properties.  Urban mining and circular design are becoming essential strategies to ensure more sustainable growth of the global economy, in terms of competitiveness and access to markets. The cost efficiency of recycling processes has sharply improved in recent years. For some critical raw materials, it is cheaper to extract them via urban mining (e.g. gold from e-waste) than from classic mining (recycling requires significantly less energy per produced kilo of metal than primary production). Urban mining can also contribute to mitigating raw material price fluctuations and ease access to critical raw materials.  Finally, it is critical for primary mineral activities to be climate smart, transparent, respectful of human rights, and provide lasting benefits for local communities. 

This session investigates the mining of main minerals and metals, how they affect strategic value chains, and their impacts on competitiveness. The panelists shed light upon fostering the efficient design of products to improve traceability, recovery, and recycling of main minerals and metals; and increasing accessibility to recovered minerals and metals by strengthening urban mining. They also provide examples of policies to foster circular economy business models, smart mining, and urban mining.

Circular Economy and Emerging Technologies

“The intersection of ICT and the circular economy is buzzing with possibility.”

Emerging technologies and their convergence are having a transformational effect across global value chains. The range of these innovations across the digital, physical and biological technologies −from AI/machine learning, robotics, Internet of Things, bioelectrochemical engineering, to blockchain, etc.− play a crucial role in enabling circular business models by increasing efficiencies and reducing wastage; driving innovation by allowing new entrants in the markets; increasing information transparency allowing companies to gather insights; and by enabling a move away from the use of traditional, limited, or resource intensive materials.

This session aims to address those emerging technologies most frequently embraced by industries that can be catalytic enablers for new disruptive business models and facilitate the required fast pace for the transformation to a circular economy.

Circular Economy and Textiles

“Textiles are essential products. Their mode of production is also highly problematic.”

Textiles – including the apparel and fashion industries – are facing a transformation moment. With a general perception that linear, fast-fashion models are unsustainable, consumers, businesses, and regulators search for ways to make textiles and apparel into a more efficient and less polluting sector. Circular solutions are seen as a way to transform the sector, from its material essence to its guiding business models. A variety of measures are proposed, including design-for-durability, materials innovation, mainstreaming and modernizing second-hand markets, as well as promoting different business models which rely on access-as-a-service instead of ownership for garments

In this session of the learning series on ‘Circular Economy and Private Sector Development’, we invite global leaders who are advancing sustainable textiles initiatives to explore questions of economic viability, policy, environmental impact, and scalability in a new normal. 

Circular Economy and Construction