One trillion reasons why we need a circular economy

Intesa Sanpaolo has joined forces with the Ellen MacArthur Foundation to help businesses recognise their systemic responsibilities and capitalise on redesigning their business models through regenerative innovation

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Ashley Norris

17/07/2018

In 2012, the world’s cities generated 1.3 billion tons of solid waste. That figure is expected to rise to 2.2 billion tons by 2025, according to the World Bank.

It is not surprising that many are asking whether it is wise to continue wasting Earth’s resources in this way.

One person who is adamant that a revolution needs to take place is British round-the-world yachtswoman Dame Ellen MacArthur. She believes the linear model of “take, make and dispose” has failed us. A restorative and regenerative circular economy, based on futureproof system-wide innovation, is required.

The circular economy is also being championed by Intesa Sanpaolo. As Carlo Messina, the bank’s chief executive, explains: “Intesa Sanpaolo will make its leadership position in corporate social responsibility stronger, becoming the first impact bank worldwide supporting the circular economy.”

To underline its commitment, Intesa Sanpaolo has been the global financial-services partner of the Ellen MacArthur Foundation since 2015 – the first financial institution to have undertaken such a far-reaching relationship. As a leader in this area, the group is willing to work with public, private and academic institutions as well as with other industry pacesetters such as Solvay, Philips, Google, Unilever and other corporates aiming at de-risking their current linear business models.

As set out in the Group Strategic Plan 2018-2021, the bank is also committed to building a circular-economy investment fund and a dedicated circular-economy credit ceiling over the next four years, given that at the European level some €875 billion of investments are expected up to 2025 to accelerate the transition.

The adoption of the circular economy, which extends way beyond green-tech or food-tech, has a sound financial basis, too. Some $65 billion worth of recoverable materials from e-waste went to landfill in 2016, including aluminium, copper, gold and plastics.

"The circular economy is crucial if we want to understand how the future can be and how we can shape it"
Massimiano Tellini, Intesa Sanpaolo’s head of circular economy

The bank is committed to helping businesses monetise recycling, assisting them to obtain a market share of a sector that the World Economic Forum estimates will be worth US$1 trillion annually worldwide by 2025.

“The circular economy, as it’s understood in China, is to make sure that, in the design, production and waste management processes, we minimise the wastefulness of raw materials and resources,” explains Christine Loh, chief development strategist at Hong Kong University of Science & Technology’s Institute of the Environment. “We make sure that something is designed so that it could be used and reused, then disassembled and reused, in a kind of design loop that minimises waste.”

Shift from sustainability to strategic innovation

In a practical way, the circular economy may mean rethinking time-established ways of doing things in the search for more efficient solutions, and this is where emerging businesses can play a key role.

“The start-up can bring the perspective of ‘let’s step back to go from place A to B,” says Karena Belin, co-founder of W Hub, a community for Hong Kong’s start-ups. “We may not need a car, so stop changing the tyres and maybe start working on a solution that is a drone or a flying car.”

Stefano Passarello of STARTIT.asia, which promotes Italian start-ups, adds: “It took us 30 years to convince people to be sustainable. We won’t have 30 years to convince people to be circular, as our resources in the planet are not endless, and we don’t have that much time left. So that’s why it’s not just important, it’s crucial and necessary for our world and our environment to survive.”

Massimiano Tellini, Intesa Sanpaolo’s head of circular economy, agrees. “The circular economy is crucial if we want to understand how the future can be and how we can shape it,” he says. “It’s fundamental to recognise how strategically important circular economy is for Intesa Sanpaolo’s stakeholders. This is about reconnecting business and society. How? By nurturing economic, natural and social capital within a real economy model that is restorative and regenerative by design, thanks to innovation and a systemic mindset shift.”

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