Bending the economy

Written by Liam Kirkaldy on 7 April 2013 in Feature

With new legislation requiring businesses to separate waste materials, how can Scotland go about building a more sustainable economy?

Scotland has come a long way since the days of ‘gardy loo’, when ‘waste’ – to put it politely – was simply hurled out of windows and into the streets.

Changes to how we manage waste have been particularly pronounced in the last few decades - the idea that households should sort different materials for recycling is now mainstream, as demonstrated by the rainbow of different coloured bins lining Scotland’s streets.

The Scottish Government has set a target so that 70 per cent of materials are recycled, with 5 per cent of waste going to landfill by 2025.

New waste disposal regulations, which will change the way businesses separate their recyclable materials for collection, are part of that continuing journey towards reducing our impact on the environment, and making the most from the resources at our disposal.

From January, all businesses, large and small, were required to separate plastic, glass, metal, paper and card for recycling. Most food businesses are also obliged to separate their food waste. The regulations will be enforced by SEPA, along with local authorities, with a maximum £10,000 fine for those which do not comply.

To Iain Gulland, director of Zero Waste Scotland and proud recipient of the title, ‘most influential person in the waste management sector’, businesses should have little difficulty in complying with new regulations.

“Our information suggests that over 70 per cent of businesses are already separating something, mostly paper and cardboard, so it is not such a huge step for them. Businesses like restaurants and hotels that deal with food waste are now required to separate that as well. The regulations came in on January 1st so obviously most businesses got ready in the build up, we did a huge amount of work to raise awareness prior to the regulations arriving. Food waste will be the biggest challenge; places haven’t done that in the past.”

The NHS in particular will be tested by the changes, though due to the recognition that they face a bigger challenge, hospitals have been given until January 2016 to comply.

Gulland sees the new regulations, which affect businesses rather than households, as part of a wider narrative of moving towards a ‘circular economy’, in which resources can move around the system rather than being wasted in a landfill.

He says: “Scotland has made a huge amount of progress in catching up with the rest of Europe in terms of recycling rates, we’ve gone from five per cent to over 40 per cent over the last ten years. That increase has been predominantly achieved through household recycling so the new regulations coming out are really the first sign that the Scottish Government is focused on commercial recycling, in the past a lot of the attention has been on household recycling, local authority collections, so the regulations should help.”

The idea of keeping resources in the system is central to the circular economy – whether it is bottles or electronic goods.

As resources become scarcer, and with precious metal supply chains facing increased risk of disruption through geopolitical upheaval (the Democratic Republic of Congo is the world’s biggest cobalt producer), the circular economy becomes more attractive as an alternative business model.

The idea itself is nothing new, and by taking old clothes and furniture and selling them on - instead of sending them to a landfill – clothes collectors and thrift shops have been using the same basic model for decades.

Established in 1991, the Salvation Army Clothing Collection Scheme - operated by Salvation Army Trading Company Ltd (SATCoL) - is the UK’s leading recycling scheme, with 6,500 clothing banks and more than 180 charity shops throughout the UK and Ireland. It also distributes 400,000 door-to-door bags each week.

Paul Ozanne, SATCoL national recycling co-ordinator, says: “We’ve made huge inroads into reducing our residual waste to 0.2 per cent, meaning over 99 per cent of what we collect from our clothing banks and door-to-door bags is reused or recycled. Reusing and recycling textiles helps to protect the environment as it saves energy, raw materials, water and CO2, as well as making a real difference to those in our society who are most in need.”

But to take off on a large scale, the circular economy will require the support of the world’s biggest manufacturers.

One example is a plan by Philips to lease light, rather than selling lightbulbs. Under the scheme, customers would simply pay for however much light they require, with Philips owning the equipment – in this case, a light fitting – while also taking responsibility for maintaining and replacing the technology.

Gulland says: “Part of the circular economy is changing the business model and Philips’ idea is one of the ways of doing that. People are not interested in light fittings – what they’re interested in is having light. So they’re looking at a model where you lease light - pay them for what light you want, and they give it to you using their equipment, which they own. The advantage is that as new, smarter technology emerges they can come and put in new stuff, still giving you the light you want but at half the price. They can keep the materials used - the technology and the precious metals that are in the fittings - and remanufacture them, meaning you don’t need to get things out of the ground. It’s something that we could pilot in Scotland, maybe through a body like the NHS and see what savings could be made.”

Public cooperation is important in reducing waste, but relying on the altruism of the public is risky. For example, although 80 per cent of people say that they regularly recycle cans and bottles, only 50 per cent actually do.

Part of the attraction to the circular economy is that framing the move towards greater sustainability in business terms – and creating a monetary incentive in the process – can bring a change in behaviour from both business and the general public, since it is in their interests.

Since 2010 the Ellen MacArthur Foundation has worked to bring businesses and politicians together in an effort to create a circular, regenerative economy. The foundation claims that $2.7 trillion is lost each year by disposing of consumer goods, rather than remanufacturing them.

In August 2013 Scotland became the first country to sign up to the foundation’s CE100, which it describes as ‘a global network of 100 companies, innovators and administrations which has set itself a three-year timeframe to accelerate the transition to a circular economy’.

And to Jamie Butterworth, CEO of the foundation, an effective business model is key to making people see waste as an asset to be valued. 

“A circular model means designing a product and its packaging according to the market it is going into. So if it’s going into a developed country, like Scotland, companies would optimise the design of that product to fit the collection, recovery and redeployment model that existed there – so they might design the product to be easily separable at the end of its life. But if it was going into a developing country, they might design it to be completely degradable, since they know there is no collection service.

“What you are trying to do is make the product fit the system, rather than try and persuade consumers to change their behaviour in order to do something differently. What we are particularly interested in are those models that mean behavioural change comes through the business model. So take the example of the mobile phones, you could say, ‘let’s ask all our mobile phone customers to bring back their old mobile phones’. Would you on a Saturday morning think, ‘I’ve got nothing to do, I’ll just head into town and take my old mobile phone back’? Probably not. Whereas if there was a business model that said, ‘we can give you a better product at a better price if you bring your mobile phone back’, or it uses a deposit model, those are the ones that we tend to see working, because the business model works and the company makes money.”

Another strength to framing the circular economy in terms of business is that it can bring public cooperation – and cause behavioural change – even if most people have never heard of the ‘circular economy’.

Butterworth says: “The companies involved are incredibly adept at interacting with consumers, they’re very good at running advertising campaigns themselves, so we’re looking at different performance models. Businesses already have very powerful marketing arms, they have the might of the advertising industry behind them.”

A further strength to the idea is that it fits Scotland’s renewables commitment, since the circular economy requires a lower energy threshold than the classic linear model.

It can also provide greater stability, since an economy that can regenerate itself through reusing resources can free itself from the whims and changing prices of the global commodity market.

Iain Gulland made the same point while addressing the recent Safeguarding Scotland’s Resources conference.

He said: “The circular economy is important to Scotland because we are a small nation, and if we get good at recycling, whether through legislation or behavioural change – probably a bit of both – then we can get some protection from the effects of the global economy.

“We can get buffeted around with changing commodity prices, that’s what has happened in the past - in 2008 we saw a huge downturn in commodity prices globally. Sometimes prices are high, sometimes low, and that is a challenge for a country like ours. From a small nation’s perspective, the circular economy is very attractive because it can make you more resilient, and protect us from changing prices, while having greater environmental and economic benefit – by making ourselves more self-sufficient.” 

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