Within a short period of (surprisingly emotional) time, politicians are demanding an urgent rethinking to climate goals.
The consensus? CO2-neutralilty, undoubtedly, requires a changed behavior of humans, economy and society… period.
Starting from today, every new product and service must take large steps to become CO2-neutral and/or negative. By the year 2050, our economy needs to be a circular economy, in which emissions and the use of resources are regenerated systematically. At that time, the Paris climate goal must be achieved, and we must not feed additional CO2 into the atmosphere.
THE CIRCULAR HORIZONS ANSWERING THE “HOW”.
To amplify this step and to illustrate the path towards a circular economy, the INDEED Innovation team developed the Circular Horizons, rooted in McKinsey’s Three Horizons Model:
At its core, INDEED’s Circular Horizons describe the necessary actions required of people, companies and society to achieve any positive impact on the planet.
On the model, the X-axis describes “WHAT” must be done, and the Y-axis represents “HOW”. In addition, the “triple bottom line” concept (TBL) created by John Elkington is integrated to apply the economic, social and ecological dimensions that measure a company’s performance through the effect on profit, people, and the planet. After all, the goal is to create a planet worth living on for everyone – not just humans.
HORIZON 1 | DESIGN FOR EFFICIENCY
Horizon 1 focuses on minimizing emissions and energy consumption influenced by our behaviors and, at best, of every product.
For instance, for the individual human, this means as simple as using a reusable water container for tap water instead of buying bottled water in plastics. A company can make an enormously positive impact on the environment by extending the product life cycle through repairability, choice of material and the process optimization throughout the value chain.
On a societal level, transparency (and with it the trust in new measures) must be more strongly institutionalized. Life-cycle-assessment (LCA) can be one concrete way to quantify the progress and avoid the trap of greenwashing.
Just as every individual counts with his private recycling activities, every manager can, within his area of responsibilities, take his own decisions and consciously set the course. Where does every single component or material come from and where does it end up? Whoever deals with this issue honestly and systematically, is creating the basic prerequisite for contributing to the Circular Economy.
HORIZON 2 | DESIGN FOR CIRCULARITY
The second horizon is about creating the closed-loop cycle. The purpose of this horizon is to optimize an entire lifecycle of a product or service to best utilize resources by consistently retaining, reprocessing, or renewing.
The Horizon 2 loop is complex for both individuals and companies because it implies an innovation that enables the actual circularity to occur at a structural level. Business models can shift their focus from selling products to renting them out as a service. Several (if not all) areas in a company must collaborate to achieve the goal – this means Horizon 2 is directly led and influenced by the company’s leadership team.
The company Philips established the so-called Circular Lighting. This practice case allows clients not only purchase a lamp and bulbs, but receive a full-service carefree package including planning, installation, maintenance and electricity from renewable energy sources. It can be considered as “renting light”, outsourced to Philip’s Signify, for which the client is not purchasing each lamp, but paying for lighting as a service.
The individual system-components are reused and repaired whenever needed. And, if one piece of the chain actually comes to the end of its life cycle, it will be taken back and recycled by the company. In the end, all involved parties benefit in their own way: the customer utilizes a full-service carefree package while being conscious about his usage. Philips and its suppliers save material and thus increase their margins. Ultimately, the environment also benefits, because the resources are retained in the system and do not end up in a landfill.
And what exactly is the society role within Horizon 2? One solution would be to no longer export waste without regulations, for example, Europe exporting waste to non-European countries. With this current behavior, we not only avoid our responsibility in a cheap way, but also the chance to make valuable materials out of our own pollutants.
HORIZON 3 | DESIGN FOR ECOSYSTEM
The focus of Horizon 3 is to find partners, suppliers and companies, who have formed and established their own closed-loops already. The goal is to create an ecosystem of loops within a value chain together. Within systemic consideration of TBL impact, many of these ecosystems will then achieve a true functioning circular economy.
To establish such circular economy, every human must contribute and adapt his or her own behavior accordingly. As it stands, convenience and cheap products are at the expense of others – including the flora and fauna of our planet. What needs to grow, on the other hand, is sustainability and the prosperity of still completely underdeveloped global population groups.
For hospitals, “sustainability” played a minor role so far. Products are disposed after one-time usage due to hygienical reasons – this means, that each hospital bed generates 2.6 tones waste per year, including 300 kg biologically hazardous waste. A circular loop-ecosystem must be created from this waste:
Collected surgical products can be used by the hospital’s own incineration stations to generate heat and energy for the facility. The resulting CO2 is then collected and piped to a polymer factory for further processing, where it is converted into monomers (plastic components) and finally into polymers in a chemical process. These plastic pellets can be used by any industry, thus saving resources. And for the hospital, new surgical products can be produced.
In order to establish this, partners and suppliers must be found, who are involved in the recycling and reprocessing within their own ecosystem, who might have established their own loops and who are suitable for such resilient loop-ecosystem. With that, the hospital, and on a bigger scale, the entire hospital infrastructure, waste recycling and the energy production can be transformed sustainably.
EVERYONE PROFITS FROM A FUTURE WORTH LIVING IN.
Let’s summarize the Circular Horizons:
- The first horizon is to use less resources as much as possible by extending and renewing their lifecycle.
- The second horizon is to create a closed-loop, the actual circularity.
- The third horizon is to build a circular ecosystem by connecting diverse closed loops.
Therefore, the focus for the next 10 to 20 years is to challenge and encourage humans, companies and the society to jointly achieve the vital climate goal. Examples from all horizons show that there is no “either-or” between increasing profits of companies and meeting the climate goal. The balance between economic, social and ecological impacts must be obtained during the conscious reduction of emissions, the creation of closed-loop cycles and the development of circular ecosystems. Only with that we can ensure a future worth living for all life on the planet, with the help of the horizons.
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Karel J. Golta
CEO + Founder