How to Engage the Private Sector to Accelerate Solutions
Transitioning from a linear to a circular economy requires a seismic shift in the way we produce, consume, think, and behave. For a systems change of this magnitude to truly take root, the public, private, and social sectors must coalesce around a common circular vision—one that is inclusive of all communities, at all scales. While each of us has an important function in the transition, the role of the private sector, our economic engine, will be the ultimate catalyst for unprecedented change.
Business’ adaptation to a circular economic system begins by acknowledging the real social, environmental, and economic burden of wastefulness, then scaling profitable reduce and reuse processes, goods, and services.
In an era of hyperbole and empty rhetoric, where terms like “corporate purpose” are on the lips of every business leader, the circular economy transition provides a real opportunity to demonstrate authentic and inclusive stakeholder engagement and deliver ROI together with environmental stewardship.
Achievement of such a bold vision is possible, but it requires multi-sector partnerships guided by a systems approach.
In a remarkable recent example of cross-sector partnership, The New Plastic Economy initiative—organized by London-based Ellen MacArthur Foundation and supported by corporate giants including Coca-Cola, PepsiCo, and Unilever, as well as the UN Environment Programme—has persuaded plastic-dependent companies to reveal for the first time just how much plastic they use each year. The tallies are staggering, led by Coca-Cola at 3 billion kilograms, PepsiCo at 2.3 billion, Nestlé at 1.7 billion, and Unilever at 700 million. The New Plastic Economy’s goals include eliminating some problem plastics and committing to 100 percent “reusable, recyclable, or compostable plastic packaging” by 2025.
In most cases, however, the private sector has not yet demonstrated a sense of urgency to accelerate the circular transition, investing little in reduce and reuse business models, and in some cases doubling down on the take-make-waste ethos. In fact, despite the spotlight on plastic pollution, plastic production is expected to increase 40 percent over the next 10 years. The COVID-19 pandemic has, in fact, exacerbated the challenge, as single-use plastics are now promoted as the hygienic approach for consumers. Even progressive cities such as San Francisco are banning reusable bags for the sake of public health. A recent article in Rolling Stone estimates the environmental cost in 2015 of consumer plastic products and packaging at over $139 billion. Without a course correction, that figure will soar to $209 billion by 2025. This business-as-usual mindset has left many citizens debating the private sector’s true motivations and questioning whether it can be part of the solution at all.
While there is ample evidence to justify the public and social sectors’ decision to exclude some of the world’s largest polluters from circular economy multi-sector partnerships, the sheer size of their impact makes them impossible to ignore—particularly if we are committed to wholesale systems change.
The question is not whether we should entirely dismiss traditional polluters like big oil and big soda and focus solely on circular halo brands like Lush and Patagonia, but rather how can we authentically engage these industry titans and steer them into partnerships that advance common interests.
As a nonprofit with 30 years of experience working at the intersection of public, private, and social interests, PYXERA Global recognizes three key ingredients when partnering with the private sector to leverage the power of business to address “solvable problems.”
1. Engage the corporate partner(s) on the specific reduce/reuse/recycle interventions that stimulate ROI and result in positive environmental impact
When designing a circular partnership, it is essential that corporate partners engage on circular interventions that can drive profit and capture market share. By engaging the business units in solving a social problem—in this case progress toward a circular economy—the ROI reinforces the circular investment, allowing for a deeper and more transformative impact on a social issue. For example, Adidas partnered with Parley the Oceans to design, manufacture, and distribute shoes sourced from ocean plastic. What originally began as a pilot in 2015 has now transformed their entire business model. Highlighting this transformation, Adidas recently announced that by 2024 every Adidas shoe will be made from ocean plastic. This first-mover approach has sent shockwaves through the athletic shoe industry with Puma recently announcing a new line of recycled plastic shoes and Reebok launching plant-based performance shoes made from castor bean oil, eucalyptus tree, algae, and natural rubber. Even Nike got in the game, launching their Space Hippie vegan shoe made from recycled material collected from the waste stream.
While a handful of early adopter manufacturers race to innovate in the reduce/reuse/upcycle space, the world’s largest plastic producers are not incentivized to quickly pivot to circular interventions due to large-scale investments in new resin production and a business model that is still dependent on a linear system. The relationship between reduce interventions and business growth is counterintuitive, yet plastic producers do have an opportunity to leverage their vast resources and engage in strategic partnerships with the public and social sectors to overhaul the existing waste management infrastructure. In doing so, efficient waste streams can optimize the sorting of valuable resources like aluminum and paper, while also providing a transparent marketplace for plastic that can be transformed into new products. While in the mid-to-long term, plastic is not the solution, reimagining the world’s waste management infrastructure is a necessary component of the circular economy and a clear focal area for the plastic industry to meaningfully engage.
2. Validate internal changemakers in corporate settings and hold them accountable
An often overlooked but critical component in creating meaningful partnership, in any context, is the acute understanding that partnership is cultivated by people, not just organizations. In curating circular economy partnerships, it is wise to target internal corporate actors who have the passion, influence, and ability to spark change from within their organization and deliver meaningful value to both business and society. When evaluating whether to engage a corporate partner in a circular partnership, identify the people within the organization who share a common circular vision and a set of ideals that align their work with the engagement.
Once the internal champions are identified, work closely to help them secure key wins and give them the necessary internal support that position you to become an ally for their success. In doing so, the trust and rapport developed allows honest and critical dialogue that can inspire real change and provide the credibility necessary to further the partnership. There will be areas of disagreement, and that’s okay. Like life, partnership is messy, but if you are laser-focused on a shared vision, substantial progress is possible.
3. Actively engage in systemic circular partnerships
The program lead for The New Plastics Economy, Sander Defruyt, admits that project members have shown “an enormous lack of progress” on pioneering essential models for reuse. “The world cannot recycle its way out of this problem,” says Defruyt. The circular economy is “not about keeping today’s system and increasing the recycling rate. It’s about fundamentally changing the system.”
Complex problems call for complex solutions. The circular economy transition requires the best of the public, private, and social sectors’ collective vision and influence. Yet today, most of the corporate interest in circularity focuses primarily on the state of recycling, whether that is the percentage of recycled content in packaging, the open misrepresentation of what is categorized as being recyclable, or the horrid state of the world’s recycling infrastructure. To combat this limiting approach and account for the complexity of the challenge, circular economy programming should be designed from a systems perspective. This way, you are maximizing the power of your partners and providing a place at the table where they can authentically engage.
Highlighting the systems approach, PYXERA Global recently launched its Zero Waste Community framework in collaboration with First Mile, The 5 Gyres Institute, and Arizona State University Sustainable Solutions Center. The concept focuses on creating localized zero plastic waste communities using a reduce/reuse/recycle approach in diverse geographies, cultures, and economies around the globe. Once the community is selected, the partners follow a three-phased approach:
ASSESS: Assess the community’s waste management infrastructure; the population’s behavior regarding waste reduction and reuse; public sector incentives and investments in circular economy activities; and finally, the private sector’s investment potential.
INCUBATE: Based on the assessment outcomes, the partners implement interventions that can be tested to drive potential revenue growth such as new reduce and reuse startups and direct waste-to-product models, among other social enterprises. Interventions also target behavior change by testing new public sector incentives and community education campaigns around reduce/reuse/recycle behaviors.
SCALE: Successful interventions are tested in new markets, always with an eye toward globally-scalable innovations given how ubiquitous plastic waste materials have become.
The model’s complexity allows for corporates from all sectors to find entry points that engage their business. Whether it is a cosmetics company looking to innovate on bio-based sustainable packaging or a chemical producer wanting to turn recycled plastic into bricks for construction, the Zero Waste Community approach provides a foundation for companies to purposely engage on closing the loop.
In the absence of legislation at the federal level to promote and enable circular economy solutions in business, companies are guided by free market forces to justify a circular economy transition. Given this hard truth, it is critical to quickly identify the corporate partner’s circular economy ROI and ensure it integrates with the overall project design. While the current system is broken, a new paradigm is possible only if we align the interests of all sectors and encourage broad stakeholder participation in the process. No matter one’s impressions of collaborating with big polluters, these companies are critical partners in the transition.
This article is part of the Paradigm Shift publication series on solutions from the leaders of the transition to a circular economy. See the full collection of stories and upcoming webinars with the authors here.