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17 May 2018

Sustainability and the Circular Economy

With the adoption of the Lisbon Strategy in 2000, the European Union's central objective became the path towards a sustainable and innovative economy. This objective was reinforced later in 2015 with the Commission Communication "Closing the loop – An EU action plan for the Circular Economy" and with the presentation of the Circular Economy Package, a legislative package for the transition to a circular economy in the European Union.

This has established the way for the definition of European policies and legislative initiatives in order to achieve this objective, through strategic guidelines for member countries (including an EU Action Plan for the Circular Economy) and concrete action points: production; consumption; provision of primary raw materials; Waste Management; conversion of waste into resources - secondary raw materials; consumers; innovation and investment.

On August 2, 2017, the "Global Overshoot Day" of 2017 was celebrated, starting this day we began to consume the resources of 2018 and reduce the resources available for the future.

The current linear economy of extracting-transforming-using-rejecting has brought us to this point where we have extracted resources from the Biosphere without restoring the same value so that it is available to our children.

It was in the 1970s that we began this process of depletion of available natural resources, surpassing the capacity for regeneration of ecosystems, and the world population and its needs continue to grow.

In order to reverse this process, the paradigm of the world economy must be changed to a system based on the restoration of natural value through the reduction, reuse, recovery and recycling of the resources used (materials and energy), by extending its lifetime in the system, and also reducing the impact of the life cycle of the products and services generated, within the concept of sustainability, that is, to a Circular Economy.

This adaptation does not imply a loss of competitiveness on the part of the interveners in the process. It can also create opportunities and improvements in existing processes, making them more efficient and with greater added value for society, also enhancing activities at the local level. In fact, the need to optimize resources is a classic economic principle and the move to circular economy will help in this process of efficiency / optimization of resources.

In this rapidly changing economic and social environment, thinking about sustainability and socially and environmentally responsible management represents a way for companies to position themselves and thrive. The concept of sustainability thus enter this process in such a way as to reconcile the needs of the global ecosystem, allowing their coexistence (social, economic and environmental issues).

Waste prevention measures, eco-design (stimulating development and innovation), re-use and other actions within the circular economy could generate significant savings for companies, creating direct jobs in the sustainable management sector (eg in waste management, effluent management and alternative energy sectors) while allowing for the reduction of greenhouse gas emissions and the impact of the life cycle of business activities.

Existing technology, as well as economic availability, already allow productive needs and capacities to respond to society's needs without compromising their values and natural resources through circular flows of reuse, restoration and renovation, and which promote re-absorption and recycling.

Thus, when developing a product or service, in addition to the usual marketing and design thinking criteria associated with the innovative process, the following aspects should also be taken into account:

- maintenance of ecosystems that ensure the existence of raw materials;
- management of the various resources used in the production and logistics process;
- management of waste arising from the production process;
- the environmental impacts resulting from the consumption of the good;
- the final destination of the products after consumption or after the end of the line (reuse).

In addition to the existing productive and technological solutions that enhance the circular economy, there are also many management support tools that will help companies meet this new challenge, which is an excellent opportunity to more broadly implement eco- design, eco-innovation and green marketing:

- Green Public Procurement in accordance with the practices of the European Union's Green Public Procurement.
- National Plans for the Circular Economy (PNEC) are stablished in various countries.
- Ecological Public Procurement Strategy undertaken by central institutions of EU countries.
- ISO 20400 - Sustainable procurement. Although not a requirement standard (it’s a Guidance standard, so not certifiable), this standard establishes very useful guidelines for the definition of purchasing management procedures that stimulate the Circular Economy. It is precisely in the purchases management that the decision-making process is concretized on which way to go in the acquisition of natural resources and raw materials with less impact in the life cycle.
- ISO 14001 - Environmental Management Systems. This standard now emphasizes life cycle analysis in the new version of 2015 and encourages risk analysis along the supply chain. It allows more sustainable management of companies and is an important tool in controlling the impacts of the organizations.
- ISO 50001 - Energy Management Systems. ISO 50001 defines management requirements for one of the most significant environmental aspects today: energy consumption. These requirements support the management of companies in the definition of strategies that allow not only to reduce the impact of energy bills, but also to reduce consumption (acquisition of new and more efficient technologies) or to choose the origin of energy (renewable vs. non-renewable).
- EMAS Verification of the Environmental Management System (EMAS (Eco-Management and Audit Scheme) Eco-Management and Audit Regulation, Regulation (EC) No 1221/2009) - This verification has a philosophy identical to ISO14001, but goes further in controlling environmental aspects and their impacts, namely in the definition of environmental performance indicators of the organization.
- ISO 14006 - Ecodesign (previously also considered in UNE 15031). This standard encourages control procedures in the design of products and services in order to integrate life cycle analysis into their definition.
- ISO 20121 - Sustainable Events MS - Although most events are typically time-limited in duration, they also have non-negligible impacts that should be minimized to avoid "leaving a mark" when finished. It forces the promoters to have a deeper preparation of the organization of the events and to promote more sustainable behaviours.
- EU Emissions Trading System (EU ETS) - it is a legal tool that allows control of the effect of the activities of some companies on the environment (through the amount of CO2 emission), compensate the negative effects and enhancing the positive effects.
- Directive 2003/105/EC of the European Parliament and of the Council of 16 December 2003 amending Council Directive 96/82/EC on the control of major-accident hazards involving dangerous substances - This tool seeks to prevent impacts to the environment by promoting control of environmental aspects with significant impacts, both in terms of their size and their hazards.
- NP 4457 - Research, Development and Innovation MS. Similar to ISO 14006, this Portuguese standard also acts in the design of products and services, a process in which sustainability criteria may be included.
- Social Accountability Standards and Codes of Conduct (SA 8000, NP 4469, BSCI, SEDEX, ...) - These standards seek to protect the Labour Principles of the United Nations Global Compact by safeguarding the interests of workers and increasingly working along the supply chain. There is an adaptation of some standards and codes of conduct (such as BSCI and SMETA) to this reality of sustainability, increasingly integrating environmental issues (such as life cycle) into their requirements and allowing environmental issues to be addressed and embedded along supply chains in conjunction with the other major pillar of sustainability (social issues).

With the support of tools such as these and others available or emerging, organizations, together with the rest of society, will be able to define their path by collaborating in the convergence towards a circular economy based on the principles of sustainability.

With this economic model, alternative to linear economy, we are not only producing, consuming and generating waste, but reusing and recycling after consumption.

The circular economy model can replace the traditional economic model in the short to medium term, focused on a society without waste, based on sustainable production and consumption practices.


Pedro Fernandes,
Comercial Manager | Audit Unit at APCER

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