The growth of interest in the circular economy has been meteoric with new initiatives emerging weekly. A key figure in this movement has been Dame Ellen MacArthur, a renowned and iconic round the world yachtswoman. In this article, the authors explore how MacArthur and her foundation have created a framework for a new economy, leading to a major movement concerning global resource challenges and how the economy operates, and what business leaders can learn from her successes in building and sustaining transformation within the circular economy.
In 2012 a report was launched at the World Economic Forum (WEF) demonstrating the economic and business case for a circular economy. Five years later, a report focussing on the application of the circular economy to address a New Plastics Economy was the highest downloaded report in the history of the WEF. In October of this year over 2,000 delegates gathered in Yokohama for the second World Circular Economy Forum. The European Union second circular economy package, impacting on industrial supply chains within and beyond the region is under consideration. (see Atasu et al., 2018 in HBR).1 Over 100 universities worldwide now feature the circular economy in one or more programmes and 17 academic journals have recently issued themed calls on the circular economy.
By any measure, the growth of interest in the circular economy has been meteoric with new initiatives emerging weekly. Business leaders are starting to embrace the term and are moving beyond symbolic support statements to exploring how to implement the circular economy, as examples from Danone, Philips, Renault (See exhibit on next page) and Ricoh testify. This presents significant short-term challenges but also long-term opportunities and rewards. (see Tse et al. 20162 and Esposito et al., 20183 in HBR).
A key figure in this movement has been Dame Ellen MacArthur, a renowned and iconic round the world yachtswoman, who at the age of 24 completed the Vendee Globe, the world’s toughest race. As the fastest person to circumnavigate the globe single-handedly, breaking the record in 2005 (age 28) her elite sporting status was assured. However, soon afterwards and finding herself in the Antarctic on a sabbatical after one especially gruelling race, she reflected on the abandoned industrial remnants of the whale oil industry.
“There were ships filling the harbours, some of which still line the shores today, and spare propellers and patterns for producing engine parts (…) This was a massive industry with thousands of tons of steelworks employing thousands of people and now it’s a dead, empty space.” This eventually led to her setting up the Ellen MacArthur Foundation with a mission to accelerate a transition to a circular economy.
Why is this different from many other charismatic and high achieving leaders who have established charities, foundations and done good deeds as part of an epiphany or career change? What can business leaders learn from the successes of building and sustaining transformation within the circular economy? MacArthur and her foundation have transcended a single issue focus and created a framework for a new economy, leading to a major movement concerning global resource challenges and how the economy operates.
It is one thing to identify what needs to transform, but another thing to overcome resistance to inertia. In order to fulfil its potential, both purposeful and inspirational leadership is required across every facet of business and society to persuade everyone on this planet that everything that we extract, produce and consume cannot be disposed of over time (linear economy), but must reintegrate back into our system (circular economy). How can this seismic shift in thinking and behaviour be achieved? To answer this question, we need to look at what has been achieved and how, and whether the transition can indeed be accelerated and sustained.
Following her Antarctica experience, MacArthur began to move away from competitive ocean racing, and spent three years travelling the world for a different purpose: to find out more about how economies work and whether it might be possible for an economy to operate in a fundamentally different way. This meant re-thinking an economic model that extracts resources, converts them into products and services which are then consumed and either disposed or replaced with new products and services. MacArthur termed this the ‘linear economy’, a throughput model that relied on relatively cheap accessible resources and fossil fuel energy, mass production and consumption and little regard for the accumulation and consequences of external costs. Some of the clues were already visible in previous iterations of ‘new economic thinking’ such as natural capitalism and performance economy, which had attracted their own followings, but failed to gain traction with business or policy makers or scale. More significantly, MacArthur noted the rise of the 4th industrial revolution and the need to harness scientific and technology revolutions in innovations and deep insights from complexity science created new opportunities to apply systems thinking to the challenge of resource depletion and natural capital degradation.
At the outset MacArthur’s message was simple – the linear economy is failing and we need a new economic model. This was not about saving the planet or an environmental agenda, but targeting a generation to think differently about the future and providing a positive alternative to a take-make-dispose model.
About the Authors
Peter Hopkinson is Director of the University Exeter Centre for Circular Economy that brings together academic researchers, business, policy makers and civic society to support the transition to a circular economy. He set up and ran the world’s first MBA in circular economy and a global on-line executive education programme for leading global businesses, innovation companies and educators. He is most concerned with developing the scientific evidence base for circular economy theory and practice at varying scales and within different industrial contexts.
William S. Harvey is Professor of Management and Associate Dean of Research at the University of Exeter Business School. Will researches on reputation and leadership within organisations. His work has appeared in world leading journals such as Harvard Business Review, Journal of Management Studies and Human Relations.
1. https://hbr.org/2018/07/rethinking – sustainability – in – light – of – the – eus – new – circular – economy – policy
3. https://hbr.org/product/introducing – a – circular – economy – new – thinking – with – new – managerial – and – policy – implications/CMR677 – PDF – ENG
4. http://www.oxfordhandbooks.com/view/10.1093/oxfordhb / 9780199596706 . 001 .0001 / oxfordhb-9780199596706-e-19
8. https://www.ellenmacarthurfoundation.org/publications/towards-the-circular-economy – vol – 1 – an – economic-and-business-rationale-for-an-accelerated-transition
10. https://www.theguardian.com/business/2016/jan/19/more – plastic – than – fish – in – the – sea – by – 2050 – warns – ellen – macarthur
11. https://www.ellenmacarthurfoundation.org / our – work / activities / universities /network – universities