Climate Heating and Circularity: A Drama in 3 Acts
A few days ago, I delivered a keynote speech at the Hoffmann + Krippner FutureTalk Event titled ‘Future-proof through Circularity – Strategies, Opportunities and Case Studies’.
To captivate my audience with the concept of circularity, I framed my presentation as a drama in 3 acts:
- Act 1: Circularity is an imperative necessity.
- Act 2: Maximizing economic potential in Circular Economy opportunities
- Act 3: Circularity is a challenge we can master, and here’s how.
Let’s dive right in.
Act 1: Circularity is an imperative necessity
I am usually an optimist and not one to spread doom and gloom in speeches, but the most recent climate data is more than alarming. Global mean temperatures are rising considerably faster than predicted, and climate scientists currently do not have sufficient explanations. They are scared, and we should be, too.
Take the chart of Global Sea-Surface temperatures for example: one year ago in March 2023, the curve significantly detached from the curves of all previous years (shown in yellow), even though the last years were already strongly affected by our emissions. Now, 2024 is starting to stay above even the 2023 curve, again with a large gap.
The message in this and many other data plots: Climate Heating is not a future projection, not a warning anymore, it is NOW.
There is a good chance that we will look back at March 2023 as the point in history when our climate tipped.
Add to this the latest Temperature Anomaly visualizations for February 2024: Central and Eastern Europe were a whopping 7°C hotter than normal.
The message: Climate Heating is not something that only really affects far-away countries, it is HERE, on my home continent of Europe.
In fact, just days after my keynote speech, the European Environment Agency released their newest “European Climate Risk Assessment”, and the key findings are devastating: Europe is the fastest warming continent, the consequences are already severe, and politics, society, and economy are ill-prepared for what’s still to come.
Read our founder’s letter and learn more about our shift from human-first to planet-centric design and humane innovation.
The future must be circular to avoid catastrophe.
Florian Witt
Act 2: Maximizing Economic Potential in Circular Economy Opportunities
Circularity is an opportunity for economic profit, growth, and resilience.
Our current linear economic model is based on the “Value Chain”, or “Take-Make-Use-Waste”. Businesses extract resources and turn them into products to sell to customers and consumers. Each time a business makes a sale, the turnover generated is added to the Gross Domestic Product of the respective country, and if that GDP grew at the end of the year, politicians and business leaders will pat themselves on the shoulder and say “We did a good job! The economy has grown, the value was created for our society.”
Using GDP as a Key Performance Indicator for political and business decisions is problematic. It disregards the decrease in value that occurs as products are used, sometimes even before use. Every time a consumer buys a new car at a dealership, the value of that car plummets the moment they take ownership because now it is “used” – even before it has been driven anywhere!
This progresses to the point where the value of the product eventually reaches zero: this is when we want to get rid of it and replace it with a new one. Sadly, the devaluation does not stop there. Now the product needs to be disposed, which costs effort and money, pushing the product value further down into the negative. This phenomenon is known as the “Value Hill” in the Circular Economy. Much like Sisyphus, we continually push resources up a hill, just to see them roll down into a deeper valley than before.
In a more holistic view, the “Value Chain” is a Value Destruction Chain. It turns valuable resources into waste, giving us a limited amount of use in between, and causing all those highly problematic emissions in the process.
As all of humanity is living together in the closed system that is our planet, the only practical way to a sustainable economy is by circulating the materials and products we already have in closed loops, fueled by energy from the sun in its many forms, the only thing that is plentifully supplied to us from the outside.
To end the “doom and gloom” section of this drama and steer it towards a hopefully happier end, this is exactly where the Circular Economy derives its economic potential.
All circular strategies have in common that they positively influence the devaluation phase of products and materials, preventing or slowing value loss, recreating value, and sustaining a base value of products and materials.
For businesses that leverage Circular Strategies, this will allow
- Higher profits by preventing value loss;
- Growth by building sustained value assets;
- Resilience through independence from volatile resource extraction and fragile global supply chains.
Act 3: Circularity is a challenge we can master, and here’s how
So how can we, as humans running businesses in our current linear economy, start this necessary journey towards Circularity?
The first step is to grasp that all parts of your business will be affected. A complete transition to Circularity can seem like a monumental challenge, and a high risk for your business. Rest assured that there are good ways to break up such a transition into manageable steps, and not embarking on this journey right now comes with significantly higher risks than doing it.
Here’s a rough battle plan that has often worked well for our clients at INDEED Innovation:
- Make yourself aware of the roadmap for sustainability regulations in your current and future markets. There is a lot happening right now in the EU and abroad affecting reporting, producer responsibility, eco-design, and much more. Many regulations are not yet final, but their direction is clear. Do not wait until they come into effect, act on them now and avoid the stress of a fast, forced transition on your business.
- Assess your current business offerings and find out where your best circular opportunities are, through the complete product lifecycle. Maybe the products you offer are already long-lasting, but you do not offer to take them back and refurbish them? Maybe you are sourcing carbon-intensive materials, and designing your products to use alternatives can have a big impact on your emissions?
- Identify which circular business models would work with your products and for your customers, then design your products to enable these business models and make them profitable (“Design for Circularity”). Would your customers see value in renting your products rather than buying them? Start small and learn from circular pilot projects!
Here at INDEED Innovation, we will gladly support or even lead your journey to Circularity. Contact us and find out how.
Florian Witt
Design Engineering
