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Introduction to the Circular Economy: A Sustainable Alternative
Climate Governance Malaysia (CGM) held the first session of the inaugural Chairperson Masterclass , titled "Scaling Up the Circular Economy".
This event brought together chairpersons & board of directors of various esteemed companies in Malaysia to provide invaluable insights into global challenges to address climate change and sustainability issues.
Welcoming remarks were delivered on behalf of the venue host by Puan Salmah Bee, Executive Director of Market Development at Securities Commission Malaysia, and on behalf of Climate Governance Malaysia by Datuk Tengku Marina Tengku Annuar Badlishah, CGM Council Member.
Ashleigh Morris is the CEO of COREO, a leading sustainability consultancy and advisory firm based in Australia, specializing in circular economy strategies and implementation. COREO works with organizations to develop and implement circular business models, resource optimization strategies, and sustainable practices. With expertise in circular economy principles, COREO helps companies unlock value from their resources, reduce waste, and transition to more sustainable and resilient operations. Ashleigh is a renowned sustainability expert, an advocate of the circular economy and an Ellen MacArthur Foundation ‘From Linear to Circular’ expert mentor. She is on a mission to catalyse the global transition to a circular economy by empowering organisations to make systemic change, with an unwavering commitment to be of service to the creation of an economy that respects and values people and nature.
Circular Economy
The concept of the circular economy is the concept of an economy which aims to eliminate waste and pollution, circulate products and resources, and regenerate natural and social systems. This is an alternative to the linear economy, which addresses climate change, inequality, and resource scarcity. Various tools and principles can guide businesses in adopting circular practices.
Ashleigh discussed five circular economy business models: resource efficient supply chain, resource recovery, resource utilization maximization, product life extension, and product-as-a-service.
Resource efficient supply chain: Focuses on procuring recovered and renewable resources, promoting sustainability and reducing waste in the supply chain.
Resource recovery: Mechanical or chemical recycling and reuse of materials, diverting them from landfills and contributing to a more circular approach to resource management.
Resource utilization maximization: Maximize the utilization of resources through sharing platforms and technology.
Product life extension: Design products to have a longer lifespan, either through repair, refurbishment, or upcycling.
Product-as-a-service: Provide products as a service rather than selling them outright. By offering the "outcome as a service," companies can retain ownership of the product and take responsibility for its maintenance, repair, and eventual disposal, thus promoting circularity.
Real life examples of these models that were being applied in Malaysia include sustainable wood manufacturing and plastic recycling.
One such example is sustainable wood manufacturing, where companies focus on using reclaimed or responsibly sourced wood to create products, minimizing waste, and maximizing resource efficiency.
Another example is plastic recycling, where companies adopt processes to collect, sort, and transform plastic waste into new products or materials.
Bubbles is a smart detergent vending machine service, instead of selling washing machines, opted to offer laundry services, maintaining ownership of the machine and providing ongoing maintenance and support. This approach promotes longer product lifetimes, reduces waste, and fosters a circular economy mindset.
Network Governance: Overcoming Challenges through Collaboration
The significance of network governance in achieving circularity was highlighted. Reformation of governance structures and mechanisms is needed to foster collaboration and transparent information exchange.
By creating a framework that encourages open communication and cooperation among stakeholders, network governance enables the effective implementation of circular economy principles and practices, ultimately leading to a more sustainable and circular economy. Network governance should also be tailored to each organization's needs and context.
IKEA and Philips were such examples of leaders in the circular economy. IKEA's initiatives i.e. reselling & refurbishing products and Philips' goal to decouple growth from resource consumption were admirable. It was further highlighted that the maturity curve for circular economy adoption and the importance of understanding, taking action, and communicating circular economy practices were key elements to these companies’ successes.
Open Discussion
During the open discussion session, topics related to materials, circular economy, and environmental challenges were discussed. When addressing issues like electric vehicles and mining for metals, Ashleigh highlighted the importance of reducing carbon emissions in materials production e.g. diversifying scrap metal recycling, steel refurbishment and implementing policy interventions e.g. public transport to make systemic changes to implement circularity in existing supply chains.
Diversification was also important to mitigate risks. Another way to mitigate risk is to consider servitization, which is where customers pay for a service, rather than buying the equipment themselves, such as in the case of pay-per-use steel.
Restrictive cultural norms, e.g. patriarchal norms was brought up as a source of significant challenges. To combat them, empowering change and bridging the disconnect between the board and core operations will be crucial. Sharing insights at all levels, empowering employees, and using third-party facilitators to address concerns will be crucial steps in overcoming such adversities.
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