Ep 171: What’s stopping Scotland from scaling a circular economy?

[01:00:00.320] - Finley Phillips In order to move from circular theory to circular practice, we need businesses, households and governments to move forward together. Welcome to the Circular Economy Show. I'm your host Fin, and in this episode we'll be talking to an organisation who are playing a key role in making this happen. Zero Waste Scotland have positioned themselves as a leading thinker in the circular economy space. Their new report, Scotland's Circular Economy Practices Ecosystem, aims to identify the barriers that are stopping businesses from adopting circular practices at scale. Joining me today to discuss its findings are Peter McCafferty, business support manager at Zero Waste Scotland, and Dr. Michaela Hruskova from the University of Stirling. Welcome both and thanks for joining me today. I'll start with you Peter. Zero Waste Scotland sits as an intermediary between business and policy through their three pillared system. Could you tell us what those three pillars are and how they're connected? [01:01:08.010] - Peter McCafferty Yeah. Thanks Fin. So we're an evidence led organization so obviously the role of knowledge in that is essential, it's really important and that can be knowledge in the sense of broadening and deepening our own kind of knowledge and expertise through engaging research and other types of projects to, you know, to build that knowledge around the circular economy. But it's also about sharing and cascading that knowledge, facilitating understanding and greater participation and involvement. So as well as knowledge, we work across business and citizens, supporting them directly to implement the principles and the theory of a circular economy. We're fortunate in Scotland that for a long time we've had a really supportive kind of regulatory framework that encourages a lot of this work and at the same time we've had a really bought in community which is great. It means that we've been able to kind of work from the top down and the bottom up to really drive the circular economy in Scotland. [01:02:13.940] - Finley Phillips Great. And we know that there are a lot of innovative circular businesses out there and as you say, supportive government policy too. So what would you say are the barriers that are currently holding those businesses back? [01:02:25.420] - Peter McCafferty Yeah, it's an interesting one. So in terms of our work, thinking specifically about business support, we've been working kind of coming back to that idea of top down, bottom up. It's been about creating supply and demand. So at an individual business level we've seen a lot of really strong successes. We've supported individual businesses to explore and innovate around circular business models, for example, new technologies and business practices. So at that business level we've seen a lot of success and there's pockets of that replicated kind of regionally and sectorally as well. But what we've not seen is that kind of organic scale and replication of that success. It's almost, we've not got to that kind of tipping point. So we start to think about why that was. Why are these kind of individually successful businesses struggling to gain traction in the market and why are other businesses not adopting these approaches? So it's almost like we're creating this little parallel economy and obviously all businesses have the same struggles in terms of competition, uncertainty, risk and access to investment and things like that. But it just felt as though when we were working with businesses to look at circular, there was always an extra, an extra hurdle. [01:03:47.300] - Peter McCafferty And that got us to what we're going to talk about more today in terms of the report, the ecosystem report. Because what we started to look at was actually, well, fundamentally the conditions in the economy are geared towards linear. And those circular businesses are struggling to get traction because they're not competing on a level playing field in terms of cost or value or perception of risk and all these kind of things. [01:04:13.570] - Finley Phillips Yeah, I mean, so as you say there, the current economy is obviously hardwired and incentivized for linear activity. Just moving to you, Michaela. What could we do, thinking about the report now, what can we do to sort of tip the balance towards circular economy practices? [01:04:29.650] - Dr. Michaela Horuskova Thank you for that question, Fin. That's a really important one. Well, I think I would like to first of all start by highlighting and reiterating some of the points that Peter just made in terms of, in terms of the lessons learned from the report. I think there are really two key lessons learned that are worth highlighting and going into a little bit more detail. And the first key learning from the study that we did is the fundamental conflict between the linear and circular economies. It became very apparent that our entire economic system is designed for continuous growth. But this really isn't sustainable. We cannot be producing and consuming at the expense of our planet. So we need to shift our thinking away from the idea that selling and buying more is inherently good. And we need to look beyond purely growth oriented metrics such as the GDP alone. And this then goes hand in hand with rethinking how we measure value and how we do pricing and how we price the cost of production and consumption. So in our current linear economic model, we don't really account for any of the environmental and social harms that that we price into our products and services. [01:05:43.510] - Dr. Michaela Horuskova Which means that circular products that do account for externalities actually appear more expensive in comparison. But actually it's not the circular products that are more expensive, it's the linear ones that are not priced correctly. And the second key learning then is the lack of understanding of what it means to be circular, why is it important and why it's worth incorporating into our daily lives. And where we see this very apparent is with both businesses and consumers who are quite afraid of becoming more circular because they believe it's too risky and too expensive for them to try to adopt circular economy practices. And let's be frank, many of us still believe that brand new products are better and of greater quality than reused or repurposed ones. So there really is a big obstacle that we need to overcome in terms of our culture and our general perception of what a good quality product looks like. The implication here really is that we cannot tip the balance towards circular economy practices only by addressing the supply side and developing the infrastructure without actually educating the demand side about the benefits of the circular economy. And we really need to demystify the perceptions around riskiness, cost and low quality. [01:07:14.460] - Dr. Michaela Horuskova And now I acknowledge that both of these will take significant time and effort, but we really have to start taking the steps today so we can reap the rewards later. [01:07:23.270] - Finley Phillips Yeah, I mean, as you say there, there's kind of both sides to that. We need business action, but we also need to sort of help that knowledge gap. On that. What do you think the role of the, like, how can the consumer help in shifting towards a circular economy? [01:07:40.900] - Dr. Michaela Horuskova So with consumers, I think there is an important educational piece. We have to acknowledge that we can't force people to buy products if they don't deem them to be good enough or if they perceive them to be too expensive. Because why would you buy something that's more expensive if you don't really understand the inherent value of something being more circular? So the education piece is really important. The other one is this is quite an ambitious one. But we really need to start thinking about how can we use some sort of incentives, both positive and negative, to really start pricing our goods appropriately. We can't pretend that the planet isn't on fire and ignore that in our pricing. It really has to be built in. And because if we start forcing people who are artificially deflating their price to take these factors into consideration, I believe we will have a lot more equal playing field, like Peter said earlier. [01:08:41.930] - Finley Phillips Yeah, and obviously I think collaboration is a huge part of that across the industry. So on that sort of topic around collaboration, how scalable do you think these new approaches are? [01:08:52.330] - Dr. Michaela Horuskova Well, I think they have to be scalable because we can't successfully transition towards a more circular economy without involving every one of us. We have to do this at scale because no single organization can do this alone. The government cannot do it alone, the business community cannot do it alone, and consumers cannot do it alone either. So we really need to be working collectively to bring the circular economy agenda into the mainstream. And by that I mean we need to involve not only those who are already active in the space, but actually we need to lure the actors from the other spaces of the economy into, into the fore and mobilize them to get involved as well. But the challenge here is that our study actually shows that we do not have particularly strong networks around circular economy at the moment. One of the perhaps more tangible action points that we can make, perhaps one of the more tangible action points that we can make is bring role models into the spotlight and encourage them to share their journey, tell their stories and inspire others to follow suit. Some quick wins here involve developing case studies of both success and failure, illustrating best practice in different sectors, and generally championing the adoption of circular economy practices across the board. [01:10:18.650] - Dr. Michaela Horuskova So I suppose the point here is that we have to do all of this to share the message that it's not enough just for the select few to be adopting circular economy practices, but instead we all need to get behind this. We all have an important role to play. [01:10:34.770] - Finley Phillips Great. And sort of building on that. Peter, what recommendations do you think that could be made to accelerate the transition to a circular economy in Scotland specifically? [01:10:45.650] - Peter McCafferty So I think Michaela touched on a lot of kind of specific things that we can work on in terms of building and creating those networks and obviously the role and the importance of collaboration. But I think what, what comes through actually is, is the role of leadership and the importance of having a really kind of clear and a shared vision for a circular economy in Scotland. Everyone, yeah, everyone has to be bought into that vision. Everyone, I think, has to understand kind of the role that they can play in delivering that vision. And that's an important part of it too. I think it's recognizing actually that obviously the scale of change is significant. But an individual or a collective level, we can all do kind of incremental things that will add up in aggregate to that big impact. That vision piece, I think is really important. Again, coming back to the ambition and the positives of the circular space in Scotland, the Circular Economy Bill, Scottish Government Circular Economy Bill gives us a really excellent framework to position a lot of specific activity and a lot of actions within. But ultimately it's making sure that everyone is fully bought in and understanding why they're doing what they're doing and what the net benefit is going to be. [01:12:09.770] - Finley Phillips Great. And then just finally on the report, as we've spoken about the importance of leadership, collaboration, what were the key sort of learn, what were the learnings that you took away from the report? What perhaps didn't. What isn't looking so promising at the moment in the circular economy space? [01:12:29.300] - Peter McCafferty Well, that's a tough question. Maybe kind of let Michaela come back in on that one as well. But I think for me the big thing is the lack of those kind of networks and it's actually a big opportunity. It's a positive thing as well. But we need to work much harder, I think, to build that kind of peer to peer support and get to a place where businesses are really supportive and encouraging other businesses to adopt circular practices. [01:13:01.830] - Finley Phillips Great. And then, Michaela, do you have anything to add on that one? [01:13:05.190] - Dr. Michaela Horuskova Yeah. And to build on Peter's points, I think we have to acknowledge that our business community is facing an uphill battle because they might be willing to be a little experimental, introduce some new practices, some new products, supply chains and all of these important factors. But actually if we don't acknowledge that if you don't have demand, you don't have a customer base, then you can't survive. So I would say here that we have to collectively work on this together, look beyond just focusing on the business side. And I think we need a strong vision, like Peter said, to tie it all together. Because if we don't have a clear vision, we don't have a context for why what we're doing is really important and that there is backing and there is a lot of buy in from all the important players to make this happen. And the reality is it will be difficult because we have a lot of really difficult trade offs that we need to make because a lot of the points that I made earlier were very long term and you might feel like not nothing's happening for a very long time, but that shouldn't be an excuse for why we don't take action today. [01:14:25.010] - Dr. Michaela Horuskova So we need to find a balance between chipping away at the big important items like rethinking our pricing, rethinking externalities, but at the same time having some really quick wins like the case studies, organizing meetups for our community, encouraging them to get together, share what's working, what's not working, and. But also we need maybe perhaps a bit of a campaign to educate all of us about why all of this matters. [01:14:56.640] - Finley Phillips Great. And I think that's sort of a great place to end on that sort of shared vision of citizens, businesses and government all moving together to implement the circular economy at scale. Well, thank you both for your time today. It's been great to talk about the report and its findings. And for those of you that would like to read the report, we'll leave the report in the show notes. But that's it for now. Thanks for your time and see you guys later. Thanks for listening to this podcast by the Ellen MacArthur Foundation. If you enjoyed it, don't forget to leave a review and subscribe for the next one. See you guys next time.