This joint article is written by Selina Juul, Champion 12.3 and Founder of Stop Wasting Food movement and Flemming Besenbacher, Chairman of Carlsberg A /S, The Carlsberg Foundation and The Tuborg Foundation
If Carlsberg is known as probably the best beer in the world, Denmark strives to be known as probably one of the greenest countries in the world.
Reduce. Reuse. Recycle. Rethink. Those concepts are not new. In fact, they exist in nature. If we look at nature, we see no waste. Everything in nature is reused and recycled, right down to every tiny bone and every small leaf. Waste is a man-made invention - and in the world with a growing human population and increasing resource scarcity, nature can inspire humans to a more circular thinking. And it is about time.
Goodbye to landfill
Want to ensure your company’s future? Drop the linear thinking. In a world of endless resources, thinking linearly is probably the shortest path to bottom line growth, creation of jobs and improved living standards. It has served us well to think linearly. Economically, it still does. However, business as usual and linear thinking is not a long-term solution.
In the first decade of the 21st century, the human population produced more economic output than in the first nineteen centuries of that era combined. Nature continues to be a generous supporter of our economic output, but it takes nature over a year and a half to restore the resources that the world’s population consumes in just a single year. And in the light of increasing population growth and escalating climate change, thinking linearly is no longer sustainable. It is time to say goodbye to landfill – and to introduce long-term solutions.
The price of resources is destined to rise in the upcoming years and the era of continued economic output will add to the end of human civilization, unless we reconsider the way we consume our resources.
If we keep producing the goods to feed our landfills, we will be cutting the very branch of the tree we are sitting on.
Seen from a company’s perspective, humanity can avoid the imminent dark future by employing circular economy.
The ideas behind circular economy are not new and cannot be traced back to one single date or author. The ideas have existed for a long time, for instance in a 1976 research report to the European Commission named “The Potential for Substituting Manpower for Energy”, which sketched the vision of an economy in loops. Still, it was not until the Ellen MacArthur Foundation commissioned “Towards the Circular Economy: Economic and business rationale for an accelerated transition” in January 2012 that the world really began to take notice of the economic and business opportunities of the restorative, circular model.
The linear “take, make, dispose” economic model relies on large quantities of cheap, easily accessible materials and energy and is reaching its physical limits. The circular economy is an attractive and viable alternative that businesses are already exploring today under the principles “reduce, reuse, recycle and rethink.”
A circular economy is one that is restorative and regenerative by design and aims to keep products, components, and materials at their highest utility and value at all times, while distinguishing between technical and biological cycles.
This new economic model seeks to ultimately decouple global economic development from consumption of finite resources. It enables key policy objectives such as generating economic growth, creating jobs and reducing environmental impacts, including carbon emissions.
Cutting the waste and increasing the bottom line
Many SMEs are already applying circular economic models. Food producers such as Snact and Misfit Juicery use “ugly” surplus fruits and vegetables, which would otherwise have been wasted, as raw materials for their innovative food products. Household appliance producers such as Grundig is reusing PET plastic to make new components for their washing machines.
Several supermarket chains use the A.I. particle physics technology originally developed for CERN Large Hadron Collider to create a better forecast and more accurate stock predictions, dramatically reducing food waste (up to 30%), while attracting new customers by ensuring that the items people want are always in stock at the right price and the right time.
These above-mentioned circular economy examples are not hippie romantics and flower power – but LEAN and big business. Going green is the new way to increase your company’s bottom line, and the green circular economy race has just begun.
Denmark leading the way
Back in 1992, Terry L. Anderson and Donald R. Leal argued in “Harvard Journal of Law & Public Policy” that to solve environmental problems, we must recognize that human behavior is much influenced by incentives and low information costs. While business and industry for years have been offended by the tax and regulatory systems of government solutions to environmental problems, the opportunities in a circular economy have a sound underlying profitability, which makes the shift towards the circular economy attractable to everyone.
In Denmark, businesses are driving the shift towards circular economy and recently their efforts were reinforced by the current government, as an Advisory Board for Circular Economy with 12 independent members were established. The aim has been to set a vision for Denmark’s transformation towards a circular economy. The result was five objectives, four overall benchmarks and 27 recommendations for concrete efforts that can strengthen the Danish transformation process.
The first benchmark focuses on turning circular thinking into an integral part of any company’s core business and of the population’s behavior. One tool to do so is for the government to establish a national forum that can bring together industry, government, and universities to drive the transformation process, which in the case of Denmark could be named “Circular Denmark”.
As the Danish business sector consists largely of SMEs - 99% of all enterprises have less than 100 employees - the task force must primarily demonstrate the commercial potential of circular economy to the SMEs and maybe more importantly, assist businesses in the practical implementation of circular business models.
Following the second benchmark, companies must reconsider their design, production, and business models so they can produce quality products that last longer and are easily recycled. The Danish Deposit System for beverage containers is an example of a solution that helps turn waste into new products and materials. Danes excel at returning their empty beer bottles and cans, as more than 90 of bottles and cans are retuned through the system.
The third benchmark urges us to change the way we buy and instead use circular principles. To accelerate the transition in Denmark, the public sector, which accounts for around 25% of production, must be at the forefront. Hence, public procurement and construction works should be based on total life-cycle costs instead of simply purchasing price.
Finally, it is recommended in the report to establish more well-functioning markets for waste and recycling. Denmark has come a long way since the Stop Wasting Food movement was initiated, and in just a few years, Denmark has become one of the leading European countries in the fight against food waste. But to excel in raw material recycling, better regulation and declarations that support recycled waste and raw materials are critical. Increased and better recycling can improve the supply security of raw materials for new production and increase competitiveness, as it reduces spending on raw material procurement and waste management.
Probably the greenest beer in the world
Large companies such as the Carlsberg Group are already adopting circular thinking. Carlsberg’s sustainability ambitions, Together Towards ZERO, are to reach ZERO carbon emissions and ZERO water waste at its breweries by 2030. Among the concrete 2022 targets are a 50% reduction in carbon emissions at its breweries as well as 100% electricity coming from renewable sources.
During the recent New York Climate Week and 72nd Session of the UN General Assembly, the Carlsberg Foundation announced that it has placed 80 million USD in climate-friendly investments such as research in reduction of carbon emissions, research in water protection and research in sustainable food production.
Thinking circular while thinking business is no longer a “nice-to-have” feature – it is a “need to have”. All countries will be forced to undergo this transformation. Policymakers can play an important role, as non-financial barriers often slow down or even prevent further up-scaling. If we manage to overcome barriers and create the right enabling conditions for a transition towards a circular economy and there is willingness to reconsider the way we design, produce, work, and consume we can create new opportunities, new jobs, and economic growth.
The countries which first manage to build the right framework and invest in circular economy will gain a competitive edge and open the gate to new markets based on new solutions and expertise.
For Denmark, circular economy is one of the keys in securing continued growth and high prosperity. The goal is for Denmark to be a society in which materials and products are recycled or reused to an extent where waste no longer exists in 2050. The Danish model can inspire the rest of world, and Denmark will benefit immensely from sharing this knowledge.
We need to recognize the limits of Mother Nature. It is time for action and a reconsideration of our business models and welfare societies based on the following formula: Reduce. Reuse. Recycle. Rethink. Circular solutions and technologies must replace landfill and incineration.