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Interview #15: Harald Friedl of Circle Economy

Posted on: 06.08.2019

Circle Economy is a Dutch social enterprise with the mission to accelerate the circular economy transition. EREK spoke to Harald Friedl, the CEO of Circle Economy, about the role of social enterprises in the transition toward a circular economy and the current state of the market for circular economy products and services.

 

What does Circular Economy mean to you?

An economy based on a system that is regenerative and redistributive by design. This entails a shift away from a linear model, and the linear thinking that has cemented this model, towards rebuilding an economic model with a healthier and more sustainable foundation. This means reusing resources, avoiding the creation of waste and designing business models differently to cater to the needs of people and planet. 

What should not be forgotten however, is that the circular economy is about the economy. This is why we with our team at Circle Economy are focused on working with the incumbents and innovators alike to make our economic model future proof.

 

What does Circle Economy do to accelerate the circular economy transition?

We work with both businesses and cities to help them with strategies, capacity building, research and community building. The last activity is very important because the economy of the future will need to be based on transparency, radical collaborations and partnerships. We believe that you cannot fundamentally change a sector without having everyone at the table, which is why we work to build multi-stakeholder alliances when we are trying to solve a systemic problem.

 

Why is the work Circle Economy does with regard to the circular economy needed?

Because in times of big challenges you need organisations that show that it is possible to create a better future. We often observe, that in general big visions are out there, but the difficulty is to break them down into practical solutions. That is where we come in: We try to show that real change is achievable, and we show people how to get there by co-creating solutions. We work in parallel on changing the old paradigm while creating conditions for a new model to emerge. One step at a time – until we hopefully reach a tipping point towards a circular future. 

 

Circle Economy is a social enterprise and structured as a cooperative, can you explain what this looks like and how this supports your organisation’s mission?

A cooperative has members, we have an active group of businesses and institutions as our members. Membership not only creates awareness but also ownership and involvement. It also shows that the drive towards the circular economy is bigger than our own interest, it is the interest of all people. The structure of this organisation really aides in the creation of a community, which is why we designed our organisation this way. 

 

How do social enterprises in general contribute to resource efficiency?

Social enterprises have sustainability central to their business models. A goal beyond ourselves and profit. Social enterprises are a way to combining a healthy business case without being too dependent on donor money with a vision to strengthen the social good. It allows us to focus on having impact, instead of having to focus on the bottom line only. Therefore, social enterprises increase the chances of being successful in the transition. 

 

Is there a market for circular economy products and services today?

It is emerging. Think of MUD jeans, Adidas creating a circular shoe, circular t-shirts and the bicycle rental and repair service Swapfiets. Consumers also want more transparent labelling, which is something we are currently working on. In the Netherlands we see that 80% of consumers bring reusable bags when they are shopping and in general it is encouraging that more than a third of the consumers is willing to pay more for sustainable products. So yes, there is an emerging market. There is a big demand for circular behaviour, that is more connected, more human. However, a circular economy requires a lot of changes in the value chain that are less visible to the consumer. So many of the changes are happening in the background. 

 

If many of the changes are not visible for the consumer, what are the main drivers for companies to move towards a circular model? 

It is primarily to make their businesses future-proof. Most companies sense that change is coming and that they will need to change their business models to survive. Another reason is pressure from clients, who want to see different behaviour. Changing regulation also plays a role. The last driver is that there is internal pressure in companies to adapt behaviour. Employees want to contribute and involve themselves to live purpose through their work. You don’t have to be a CEO to make changes, people in various functions throughout companies are making changes. 

 

What is needed for the circular market to grow?

The most important thing is that regulation needs to be changed. Now regulation often hinders the transition, for example the subsidies for fossil fuel production. Regulation needs to create an incentive to reuse products instead of buying new products.

A huge change will also be needed in consumer behaviour. If enough consumers would make it clear that the external effects of production are unacceptable and they do not wish to be a part of this current economic system, it would speed up the transition. 

In the end, everybody is needed to pull this change forward. Businesses, governments and consumers alike need to be part of the solution.