You have to change the goals to change the system.
In her book Leverage Points: Places to Intervene in a System, Donella H. Meadows describes that one of the most efficient ways to change a system is to change the goals and what you measure in a system. So like any digital transformation, your sustainable transition needs clarity on what you want to achieve. Do you want to achieve fewer Co2 emissions, or will you take a more holistic approach and can you change how your organisation operates to stay within a broader set of social and sutainable boundaries ?
Find a safe and just space for humanity.
If we want to change this system from a linear to a circular one and thus find a safe and just place for humanity, we should start to design a circular goal. Kate Raworth wrote Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist. She visualised the circular economy in a doughnut shape, which includes a framework to reach both a social foundation and an environmental ceiling.
Which targets the EU uses to transition to the circular economy
How the economy is structured impacts our daily lives, as we all contribute to it through the goods and services we buy and use. The current linear global economy is designed around the consumption of goods and services, so much so that the measurement tool we use to determine the success of nations is called Gross Domestic Product (GDP), and it measures the things produced and sold in a country.
The European Union states that the daily production of materials to 45% of CO2 emissions. The European Commission recommended the following leading indicators for European countries to use in their national evaluations to take the appropriate measures to promote a sustainable circular economy. These are:
1. The production and consumption indicator
2. Waste management indicator
3. Secondary raw materials indicator
These are good guidelines for a macroeconomic level, however, more in-depth strategies are needed to set specific targets for your organisation. The first step is to set wider targets than only to reach profit.
From a single to a triple bottom line
For many companies who have already taken steps towards a circular economy, sustainability efforts made their operations more efficient. An important incentive of this is that it benefits their economic bottom line. Therefore the first step they take is extending their targets to a single to a triple bottom line. However, if you really want to take responsibility for both climate and social boundaries, consider a triple bottom line.
The triple bottom line (TBL or 3BL) is a framework for measuring the sustainability of a business or organisation. The three bottom lines are:
- financial performance,
- social and environmental performance, and
- long-term economic performance.
It is also known as “people, planet, profit” or “the three Ps”. TBL aims to measure a business’s economic, social and environmental performance, allowing for the measurement of its overall sustainability. The TBL framework is intended to provide a more comprehensive view of a business or organisation’s performance than traditional financial measures alone.
These indicators are high-over to take more responsibility within for your organisation’s targets. So how do you set specific climate targets for your products or services?
Step 1- Start by mapping your organisation’s life cycle.
If you want to explore how your organisation can contribute, the first step is to map out how the linear current product or system works by doing a life cycle activity. This should explain the following:
– Extraction / which raw materials are needed, and where do they come from?
– Manufacturing / How are the materials and final products made?
– Packaging + Transport / How are products protected and moved around?
– Use phase / How are the products used, active or passive?
– End-of-life options / Where do the products end up after for how long?
Step 2 — Identify potential intervention areas in your linear products or system across each life cycle stage.
Depending on the organisation, department, and products and services you offer, there is a multitude of opportunities to influence the current linear system towards a circular one. Get creative at this stage! Can you use more circular materials? Manufacture more locally? Package it in a way so that it can be reused or reduced.
Step 3 — Explore which circularisation strategies would work for your organisation, products and systems.
You can apply circular design strategies to reduce overall environmental and social impacts in all product or service lifecycle domains.
Some of these circular design strategies are gamifying returns, Service instead of product, closed-loop business models, and design for remanufacture or modularity, but there are many more. The Unschool for Disrupted design offers a whole six-week course in these strategies.
Step 4 — Sketch out and manage What, Who, Where and How you will transition
Once you have mapped the life cycle and potential areas and defined the circularisation strategies, you can calculate its positive effects in terms of Co2 Emissions and stay within the environmental ceiling. Develop detailed strategic plans to align execution with business and circular strategy. These targets then can be the fundament for a blueprint of your What, Who, Where and How you will transition towards a circular economy.
“A dream becomes a goal when action is taken toward its achievement.” — Bo Bennett.
Once we have taken these steps, digital transformation strategies taught us that we should follow the following three steps to verify our activities, challenge ourselves with the industry, and report to create more transparency and keep ourselves responsible.
Step 5 — Audit performance and processes
This is a verification activity of your performance and processes to ensure compliance with requirements and if you reached your targets previously.
In digital projects, I audited my performance next to the AARRR metrics framework (acquisition (or awareness), Activation, Retention, Referral, Revenue) to explore where you have the most challenges in the funnel.
Step 6 — Benchmark for insights and keeps your feet on the ground
If you have an opportunity to benchmark your performance, this is a good sanity check. You may have data on the competitor’s performance, other departments, or past timelines. Comparisons create a ton of insights and keep your feet on the ground.
Step 7 — Report internally and externally to all stakeholders.
Provide regular Business Intelligence reporting back to all layers and all involved teams.
In conclusion
The transition to the circular economy could be pretty overwhelming, but there is a lot to learn from systems perspective and digital transformation strategies. It could be challenging, but following these four steps give you the first tools to get a grip on your linear process and the tools to transition to a circular one.
“Begin with the end in mind.” — Stephen Covey.
In the next blog of this series, I will research who should be responsible for the transition towards the circular economy within your organisation. Not only from a strategy perspective but also the execution of operations, go-to-market and HR functions.
