Circular isn’t enough – why your business should be FAIR
Sustainability & circularity isn’t enough when we’re starting from here. We’ve already over-exploited natural resources, exhausted and destroyed land, forests, oceans and rivers, and created waste and pollution that is breaching our planetary boundaries. We need to build back better – FAIR businesses create a better world, for all of us.
- …concentrations of substances from the earth’s crust (such as fossil CO2, heavy metals and minerals)
- … concentrations of substances produced by society (such as antibiotics and endocrine disruptors)
- … degradation by physical means (such as deforestation and draining of groundwater tables).
- And in that society, there are no structural obstacles to people’s health, influence, competence, impartiality and meaning.”
However, because we’ve already over-exploited natural resources, exhausted and destroyed land, forests, oceans and rivers, and created waste and pollution that is breaching our planetary boundaries, it’s not enough to be ‘sustainable’.
We believe we need to go beyond circular, and we need to make sure businesses meet the ethical standards that people expect. That means providing good jobs, supporting nature and communities, using safe materials and processes (at every stage from farming and extraction through to use and end-of-use).
So over the last couple of years, we’ve been thinking about how to sum this up – our manifesto[i], if you like – and we’ve decided to sum it up with an acronym: FAIR – the building blocks for a better world (and a better business). FAIR stands for:
- Fair shares – committing to fair trade, fair labour and fair taxes.
- Authentic – being open, honest, transparent and trustworthy about all that you do.
- Inclusive – this means more than just being welcoming! We believe business structures themselves should be inclusive – for example, cooperatives, employee ownership, social enterprises and community interest companies.
- Regenerative (AND circular) – given the damage we’ve already done to our planet and society, ‘sustainable’ isn’t enough. We need to regenerate our resources, regenerate living systems and regenerate communities.
Let’s dig into those in a bit more detail, to underline why we think they are important, and what they mean in practice.
[i] A manifesto is a published declaration of the intentions, motives, or views of the issuer, be it an individual, group, political party or government. A manifesto usually accepts a previously published opinion or public consensus or promotes a new idea with prescriptive notions for carrying out changes the author believes should be made. https://en.wikipedia.org/wiki/Manifesto
Fair shares - fair trade, fair labour and fair taxes
Fair shares – we believe it’s important to share and circulate value, balancing effort, risks and rewards fairly. We think organisations of all shapes and sizes should commit to fair trade, fair labour and fair taxes.
All too often, business owners can find they are prioritising their own financial needs at the expense of others. If you’re familiar with Permaculture, you’ll recognise Fair Shares as one of the three Permaculture Ethics.
But supply chains can’t survive and thrive on a ‘cost down’ approach. Forcing prices down may mean suppliers can’t afford to invest in building skills, in paying living wages (including sick pay etc), in safe working conditions, and so on. If the employer can’t provide this, then those costs are passed onto society, or worse, they result in precarious, unsafe, underpaid work, and even in modern slavery and child labour.
There are recognised organisations that help businesses to implement fair systems, and to signal this to their employees, customers and other partners. Have a look at the websites of FairTrade International, the Fair Labor Association, and the Fair Tax Mark. We also like the work of the Ex’Tax Project, ‘turning tax into a force for good’.
Authentic and trustworthy
Authentic means being open, honest, transparent and trustworthy about all that you do. That’s harder than you might think, even for small businesses. Often, we rely on suppliers that are bigger than our own organisation, or are overseas and difficult to check up on. How do we know what they’re really doing? Are we confident they are using safe materials, meeting our standards for employment, ensuring they don’t pollute the environment, meeting our quality standards and so on?
So it’s important to be honest and open about what you are doing, and what you can’t yet do, or what issues you’ve uncovered that you’re going to deal with next. Even big companies like Patagonia have experienced reputational issues, for example in 2011, the same year that it became a B Corp, Patagonia audited its tier-two fabric suppliers in Taiwan and found that migrant workers in some factories were being charged $7000 to work there – a form of debt similar to forced-labour conditions. In an interview with Fortune Magazine, CEO Rose Marcario explained the actions Patagonia took to resolve this and head-off any similar problems elsewhere in its supply chain. Patagonia partnered with Verité, a nonprofit that works to create fair conditions for workers globally, to create a comprehensive migrant-worker standard and explain it to all of Patagonia’s suppliers.
Inclusive – this means more than just being welcoming! We believe business structures themselves should be inclusive – for example, cooperatives, employee ownership, social enterprises and community interest companies.
Inclusive business models benefit employees and their communities. They support and build value for all stakeholders – employees, customers, suppliers and shareholders. They can be ‘for profit’ or ‘not for profit’, and are not philanthropic models – they aim to be sustainable businesses that ‘do well by doing good’ (to use our favourite Ray Anderson quote).
They are suitable for businesses of all shapes and sizes, and are promoted by the International Business Leaders Forum, the International Finance Corporation, key bilateral donors (USAID and AFD), the World Business Council for Sustainable Development, University of Michigan and Harvard Business School.[i]
This short blog from the New Economics Foundation discusses the benefits of Inclusive Ownership Funds (proposed by the UK Labour Party back in 2018) and includes a link to its report on UK Cooperatives.
More organisations are recognising the need for, and the benefits of diversity and inclusivity in the workplace too. This article from the World Economic Forum highlights some of these, and has links to other relevant articles on diversity.
[ii] This Wikipedia article on Inclusive Business Models includes a summary of the benefits for business and employees, and has plenty of links for more information https://en.wikipedia.org/wiki/Inclusive_business_model [accessed 1 Feb 2021]
Regenerating resources, nature and communities
Regenerative AND circular – when we consider the damage we’ve already done to our planet and society, ‘sustainable’ and ‘circular’ isn’t enough.
We need to regenerate our resources, regenerate living systems and regenerate communities, and continue to build the health of society and our planet with regenerative and circular systems.
For natural resources, regenerative agriculture is gaining ground (pun intended!). We mentioned the documentary Kiss the Ground in our Circular Insights #26 (January 2021). Narrated by Woody Harrelson, the first 20 minutes are tough going, with all the bad news we pretty much know about from industrial agriculture. After that, there are lots of inspiring stories and reminders of how easy it is to lock carbon back up into our soils, reduce water and nutrient run-off, and at the same time improve the health of all living things – including us humans! The film blurb says “by regenerating the world’s soils, we can completely and rapidly stabilize Earth’s climate, restore lost ecosystems and create abundant food supplies.” The film shows that “by drawing down atmospheric carbon, soil is the missing piece of the climate puzzle. This movie is positioned to catalyse a movement to accomplish the impossible – to solve humanity’s greatest challenge, to balance the climate and secure our species’ future.”
Regeneration International (RI) is a non-profit, with a blueprint for an international movement “united around a common goal: to reverse global warming and end world hunger by facilitating and accelerating the global transition to regenerative agriculture and land management.” RI engages with a network of more than 250 international partners and a growing number of Regeneration Alliances throughout the world, including in the US, South Africa, India, Canada, Belize, Mexico and Guatemala.
For ‘technical’ resources (metals, minerals, plastics and so on), we should be recycling what we already have instead of creating more destruction and pollution by mining new sources. Often though, we’ve buried things in landfill, or just allowed them to decay (eg microplastics from ‘biodegradable’ plastics). So regeneration might include ‘urban mining’ – recovering ‘lost’ resources from landfills and discarded waste.
This article from the Copper Alliance organisation, in 2020, summarises the benefits and some current limitations. A blog in Forbes Magazine explains how the Urban Mining Company in Texas, US, is recovering Rare Earth Elements that would otherwise by mined in China. And if you’ve listened to one of Catherine’s talks, you might have seen the example of extraction rates for gold… around 5 grams of gold from each tonne of ore for gold mining, and yet there are around 150 grams in each tonne of discarded mobile phones!
An article by Pure Planet Recycling says this approach can be far more profitable than traditional mining. It cites a study carried out in China, where academics found that it was about 13 times cheaper to extract metals from e-waste than it was to mine them, once all the additional costs are included.
In 2018, the BBC reported on an urban mining research project in Australia, where Professor Veena Sahajwalla’s mine produces gold, silver and copper from electronic gadgets. Professor Sahajwalla, an expert in materials science reckons her operation will become efficient enough to be making a profit within a couple of years: “Economic modelling shows the cost of around $500,000 Australian (£280,000) for a micro-factory pays off in two to three years, and can generate revenue and create jobs”.
We need to regenerate communities too – those communities that have lost their industries (mining and steelmaking in the UK), that have lost their agricultural self-sufficiency after being encouraged to focus on cash-crops, or that lose their ability to rely on soil, forests and oceans after over-exploitation of resources or ‘land-grabs’ by big corporations. Often, regeneration projects can produce multiple and transformational benefits. For example, the Loess Plateau regeneration project in China has improved the livelihoods of millions of local people since it began, back in 1995.
The Regenerative Communities Network (RCN), supported by the Capital Institute, was “launched as an urgent response to the Anthropocene — and the declaration of a Planetary Emergency by the Club of Rome and others. the RCN says we need a “profound response to:
- climate change and biodiversity loss;
- deteriorating ecological health at watershed, bioregional and biosphere scales;
- grotesquely unjust and ever-rising inequality;
- loss of linguistic and cultural diversity;
- and severe economic fragility as revealed by the Covid-19 crisis.”
A Chatham House research paper: Promoting a Just Transition to an Inclusive Circular Economy, points out that ‘many social and political issues social and political issues have so far been neglected in planning for the circular economy transition.’ The paper, by Patrick Schröder, notes that the ‘urgency to connect environmental with social justice is gaining in significance’ as we understand more about the links between the environmental impact of climate change, overconsumption and resources and waste generation, and the social issues of inequality and the future of work.
Peter Desmond’s blog: Inclusive Capitalism – the basis of a just and fair circular economy? We see increasing awareness amongst businesses that all key stakeholders need to be considered in directors’ decision-making. The work of Tomorrow’s Company heavily influenced changes to the Companies Act 2006, requiring boards to adopt an enlightened shareholder approach. US Business Roundtable is now promoting this approach, and B Corps encourage businesses worldwide to be more inclusive, with a focus on people and planet as well as profit.
Catherine Weetman’s blog: Transforming plastic waste into social value Across Africa, and much of the world, end-of-use plastic is not collected for proper recycling. Instead, it is burnt; ends up in drains, sewers, fields and rivers; or in unprotected landfill, allowing toxins and microplastics to leak out. This is one of the hidden costs of our modern ‘linear’ economy – take, make and waste. Four entrepreneurs are turning that plastic waste into value: creating jobs for both disadvantaged and skilled people, improving local environments, and helping people find a purpose. We dig into their business models and uncover their top tips for circular startups.