Lawrence Black sees the circular economy finally moving from theory and high-level strategy to practical applications in design, engineering, and marketing. He has a clear view of these changes as senior advisor to the Waste Management-McDonough Sustainable Innovation Collaborative, a partnership formed in 2013 to improve the recyclability of packaging and products.
Black, who also advises Fortune 200 companies on how to create waste and recycling strategies, will be discussing the business case for circular economies at the 2017 Environmental Leader Conference in June. We caught up with him to get his perspective on how this tool can be a driver for innovation.
What does the term circular economy mean to you?
There’s the theoretical term, which is taking manufactured goods and materials and, after their first use, creating value —hopefully by upcycling them. The practical is a little bit different. It’s far more challenging, especially the upcycling part. It’s hard to take a lot of used materials and create higher value for that material after its first use. Optimally, in the most practical sense, the circular economy is taking those materials and reusing them in a way that they can go on being reused. It’s not just one cycle. There are options for multiple cycles of reuse.
What are the stickiest aspects of upcycling?
Many of the materials that come through are mixed, like plastics. And often, getting that plastic to be used for a higher value than its virgin use is difficult because engineers and people who spec plastic have no idea what’s in that plastic. They’re unwilling to use it for plastic like certain parts of a car body or a healthcare medical device, where they need to know the exact specs. The plastic, because it is mixed, just goes into products as recycled plastic content like bottles, containers, car components with lower tolerances.
The whole concept of plastic being upcycled into something improved at a better level is limited — and often limited by the design. One of the biggest challenges of the circular economy is that the first use of the material is not designed for a second use. Designers still are not considering what happens to their product when it is no longer useful.
Are you seeing solutions for mixed plastic upcycling?
There’s better and better technology for separating and making a higher quality plastic. That continues, even in the face of low oil prices, which makes plastic recycling in general a bit challenging. But we continue to have advances both in material separation, the use of technology to glean a higher value from the material, whether there’s plastic, other metals, trace minerals, et cetera.
What we’re seeing also is a bigger push in the design aspect. The concept of circular economy, cradle-to-cradle is now being integrated more in the design process. The younger generation that comes through design schools is far more interested in recycling than their peers of 20 or 10 years ago. They’re interested in making their products have the ability to enter into the circular economy, and actually challenging their employer to give them the resources to do that.
Which programs and tools are companies considering as they look at their design process and supply chains?
The Zero Waste Program has now become far more competitive. That’s creating energy inside of companies to look at recycling. Programs are coming that enable engineers to get a better feel for the performance of non-standardized plastic and, within that plastic, which tolerances they’re spec’ing that are applicable.
For example, there are a lot of things that go into coating the underbody of a car to protect the parts that’s not overly critical. [There is an] easing up on the tolerances and the specifications for those types of plastics. Some is internal policy asking these engineers, do you really need that kind of a specification?
What are some examples where companies are embracing circular economy concepts?
FEMSA, the Coca-Cola bottler of Mexico. They have found ingenious ways of reusing that plastic for things like the red chairs and tables that Coca-Cola distributes to some of its merchants [home page photo image: chairs made from 111 Coke bottles]. They produce autobody parts using plastic from old Coca-Cola bottles. They’re a great example of a company that’s embraced circular economy.
Kimberly Clarke has innovative programs with their manufacturing material. There is leftover residue when they make paper. Now they have a plant nearby that Waste Management created to pelletize that waste, and the pellets go back to the boilers to be used as fuel. Granted, it’s a one-cycle circular economy but, from a logistics point of view, it’s very tight because it goes across the street, gets changed, brought back across the street, and converted into energy.
Where are we headed with circular economy principles?
There’s a lot of reliance on commodity markets. As long as oil stays below $60 a barrel, some of the challenges with plastic recycling are very much a business case. Company by company is going to have to make a decision: how much recycled material they use, how much they create, how they design their products to be disassembled.
In the long term, though, this will move from theory and high-level strategy to practical application in the design room, in the engineering function, and in the marketing. And at some point, as Millennials are far more concerned about being green and environmentally conscious, you’re going to see economic value in pursuing green circular economy strategies. So I see it progressing, albeit at somewhat of a slower pace due to the price of oil.
Could you expand on the business benefits to embracing a circular economy?
Obviously it reduces the cost of waste disposal if your material is picked up for beneficial value. Importantly, it’s becoming an expected corporate value. A company that ignores waste does so at its own public relations peril. Investors are seeing that circular economy and recycling is not just good for the planet, but good for the bottom line. They’re questioning the companies that are not aggressively looking at that as leaving money on the table. As a CEO, as the leader of a company, this is something you must have fluency in because you’re going to be asked. You need to be able to understand your company’s strategy using circular economy principles.
It spurs innovation. You become innovative in how the product is made and assembled, how it can be disassembled for its next use, the materials used. Perhaps in the long term that has the greatest value. Companies have made substantial savings — one was William McDonough’s efforts with Herman Miller on their chair, reducing the componentry and adding to the ease of disassembly by looking at it in a cradle-to-cradle fashion.
The term circular economy got its gestation from the work of William McDonough with cradle-to-cradle. Mr. McDonough comes from a design philosophy. If you don’t design it, you don’t get the result just by accident. You have to be thoughtful in the execution of the design to get the material to be able to be reused in an economical and practical manner.
Lawrence Black will be speaking at the Environmental Leader Conference in Denver June 5-7, 2017. His workshop, Circular Economies – Extracting Maximum Value Out of Resources, starts at 1 pm on June 5.