Circular Economy: Tips for its implementation in Latin-American enterprises

Implementing a Circular Economy strategy at the corporate level in Latin America is not an easy task. Certainly, you will find in the core business processes a rooted linear economy which extracts resources from the environment, transforms raw materials into finished goods and throws away materials at the end-of-use generating considerable amounts of waste. In addition, there are three major behaviors: production is highly dependent on virgin materials; waste solutions are focused at the end-of-pipe and there are high levels of waste. Operating in this way implies large losses of money causing negative social and environmental impacts. The Ellen MacArthur Foundation estimates that the global economic losses by linear companies is about $USD 2.7 trillion[i].

However, this negative panorama is a great opportunity for companies who look for solutions through circular business models motivated by the economic benefits that this model represent in comparison with the traditional lineal operating model. According to the most recent publication of the World Business Council for Sustainable Development, the economic potential of a Circular Economy surpasses the economic value of a linear economy and it is estimated at $USD 4.5 trillion.

The same publication, as by its name, as well as the aim of this blog is to serve as a guideline for mangers and CEOs. The question that arises is why the CEOs? This is mainly because an initial top-down support is fundamental and needed to engage the whole organization in powering and making a reality this paradigm change. After a top-down support, the organization DNA will be focused on realizing a Circular Economy corporate model.

The benefits are huge: boosting innovation, reducing costs, reducing carbon emissions, technological advances and greater competitive advantage, just to mention a few.

But what is the ABC of a Circular Economy corporate strategy once having the support of the CEO and understanding its importance for the organization, future generations, society and the environment?

For me, something fundamental and logical is to surround yourself with experts, and experts today are part of the Ellen MacArthur Foundation and in our region experts are gathered in the Circular Economy Platform of the Americas (CEP-Americas). CEP-Americas provides support of prepared experts and with practical experience in the implementation of the Circular Economy strategies under the conditions and needs of the businessmen and entrepreneurs operating in Latin American contexts. At the global level, the Ellen MacArthur Foundation's CE100 program brings together companies around the world that have the ambition to make a transition to the Circular Economy by showcasing concrete actions to achieve it, the foundation has brought together representatives from all the industrial sectors and a large number of countries mainly in Europe and the United States. Being part of this platform and CEP-Americas will allow you to have a great support and guidance, but at the same time a great opportunity to develop projects synergistically with other participating companies that will have more years of experience in the Circular Economy transition and will provide solutions to many of the challenges that your company is facing.
Once you have got a membership to the Ellen MacArthur Foundation and CEP-Americas and access to knowledge, publications, network and expertise, it is important to form a team within your company. This team will represent your organization in front of the Platforms, but more importantly, they are the primary architects and change agents who are responsible of changing the whole organization mindset, guiding the activities, leading by example while developing projects, achieving results and transforming the company operation. The shift from a linear economic model to a circular one must be continuous and never think that the destination has been reached by completing the assignment. This process must be understood as a holistic approach which is being achieved progressively by improving continuously more and more the developed processes and products. However, a short, medium and long term plan should be established (my recommendation is to establish goals to 1, 3 and 5 years respectively) and at each stage re-evaluate and correct if needed.
Develop an implementation plan: This is a basic step since depending on the sector, size, supplier and regulations, there will be different paths. When I had the opportunity to represent HEINEKEN-México, being part of the Project Team mentioned in the second point of this blog, aiming to be a change agent and to lead the transition from linear to circular economy I used the ReSOLVE framework as the guideline to develop the implementation plan along with the foundation's expert guide such as Jean Charles Guinot and Ken Webster, CE100 Business Manager and Head of Innovation respectively. It is also important to mention that the first World Standard to implement Circular Economic has been published by the British Standards Institution (BSI), this is also a guide to implement the concept in companies (in my next publication I will present a review and analysis of this first standard).
Projects, projects, and more projects: The best way to achieve results in a Circular Economy strategy implementation is through executing projects in the main areas and processes of the organization. Start by empowering teams in these areas through training and workshops, with the advice and support of the specialized team (2nd point of this blog) aiming to develop, execute and finalize flagship projects as the starters of other projects in the same area and to trigger projects in different areas of the organization. For this, it is extremely important to set goals, indicators and reward the most productive teams and individuals.
Documentation: Finally, it is important to document the whole implementation process as it is to document the lessons learned and the achievements. Documentation is important because involved people and teams can at some point change their positions or location within the same company or even they can change their jobs to start new challenges in a new company. Having documented processes, projects, and in general learning, will enable next generations to learn from history, and thus to repeat or improve achievements and avoid mistakes.

Please do not hesitate to contact me for any comments/dialogue.

Twitter: @RichoWeigend

Email: RicardoWeigend@ecorglobal.com

LinkedIn: https://www.linkedin.com/in/ricardo-weigend-4b169758/

[i] Only for the Fast-moving Consumer Goods sector (FMCG) according to Ellen MacArthur Foundation: https://www.ellenmacarthurfoundation.org/assets/downloads/TCE_Ellen-MacArthur-Foundation_9-Dec-2015.pdf

[1] Ricardo Weigend is a Circular Economy pioneer in México, introducing and implementing the concept of Circular Economy in his country. He works as the Circular Economy Business Developer of ECOR in México, providing commercially viable, turnkey, closed-loop enterprise solutions for private and public entities with ECOR alloys, which convert waste fiber into high value building, merchandising and packaging materials. Ricardo previously worked in HEINEKEN-México for 10 years. His last role was being the Circular Economy Leader that he led the organisation to become a member of the Ellen MacArthur Foundation CE100 program featuring the company as the first Mexican and Latin-American organization to join this selected group of world leading companies in 2016. Ricardo previously did his Master Degree in Management and Corporate Sustainability at Cranfield University in the United Kingdom and holds a bachelor degree in International Relations from Instituto Tecnológico y de Estudios Superiores de Monterrey

[1] Only for the Fast-moving Consumer Goods sector (FMCG) according to Ellen MacArthur Foundation: https://www.ellenmacarthurfoundation.org/assets/downloads/TCE_Ellen-MacArthur-Foundation_9-Dec-2015.pdf