Environmental sustainability has become a tangible concept for about 40 years. It is currently seen as the medium through which we can break the relationship between the growth of an economic activity and the negative impacts it produces.

The evolution of the concept, both from the point of view of the policies created at world level and at the corporate level, has matured other concepts that gravitate around it and that make up the ramifications of the tree of environmental sustainability, concepts that have as principles to combat the scarcity of resources and harmonize economic growth with the preservation of nature:

Eco-efficiency, eco-design, sustainable construction, water efficiency, energy efficiency, renewable energies, recycling, reuse, sustainable mobility, among others …

By adopting sustainability as a factor of competitiveness, many companies have taken steps to create an ecologically and more sustainable future, either by complying with the legislation that has emerged in this area, or by voluntary applications and practices within the various branches of the sustainability tree.

By adopting sustainability as a factor of competitiveness, many companies have taken steps to create an ecologically and more sustainable future

Despite this effort and sustainability “walking in the mouths of the world” almost four decades ago, have we done enough? Are we moving at the desired speed?

The point is that 40 years later, the world economy continues to be built on the basis of a linear business model (extract, transform, discard), which is now reportedly threatened due to the limited availability of natural resources. Some authors even say that if we continue to use resources at the current rate of growth, we will need three more planets until 2050 – the same time since the concept of environmental sustainability emerged.

if we continue to use resources at the current rate of growth, we will need three more planets until 2050 – the same time since the concept of environmental sustainability emerged

In agreement with this observation we are currently witnessing a paradigm shift.

From this change emerges a concept that embraces all branches of the sustainability tree and grows other branches. It is considered the road to sustainable development. A new and enormous challenge, full of opportunities: The Circular Economy.

Considered by several authors as the first new and true economic paradigm since the beginning of capitalism in the nineteenth century, the idea underlying the Circular Economy is simple:

“Keep the value of products, components and materials at the highest possible level at all times in the life cycle, eliminate the very idea of waste, do this using less resources and more efficiently and productively.”

To complete this definition the “ReSOLVE framework” appears. ReSOLVE, based on the principles of circularity (preserving and increasing natural capital, optimizing resource production and fostering system effectiveness), creates six levers for the Circular Economy: ReGenerate, Share, Optimize, Loop, Virtualise, Exchange .

Rethinking how production and consumption, new technologies, and business models are organized is one of the biggest business opportunities and the biggest challenge of the next decade. To make this challenge, ReSOLVE proves to be a very useful tool for companies because it allows them to understand what actions to take, as well as to calculate their costs and benefits.

Rethinking how production and consumption, new technologies, and business models are organized is one of the biggest business opportunities and the biggest challenge of the next decade

The Circular Economy thus opens up a great space for innovation with a disruptive nature throughout the value chain and offers an unlimited number of opportunities. In the Circular economy model, innovation is the key.

Recalling the Law of Diffusion of Innovation that identifies the adoption profiles of different innovation processes and that these obey a curve:

In the Circular economy model, innovation is the key

The Diffusion of Law explains how a new idea or technology is received by the market and presents the diffusion of innovation in a very simplified way.

The curve is divided into several groups:
– Innovators
– Early Adopters
– Early Majority
– Late Majority
– Laggards

The inflection point of the curve represents the point before which any idea or technology is accepted by the critical mass of the market and is comfortably located between the first adopters and the initial majority. Until the idea or technology reaches the point of inflection, we will not be able to enter the great mass of the market.

Khor Alex, inspired by Simon Sinek and Seth Godin, presents an interesting idea when affirming that there are 3 types of groups in the world:
– The ones who play the game
– The ones who watch the game
– The ones who have no idea that the game is being played

Transposing this statement to the various groups in the Diffusion of Innovation Law:
– 2,5% Innovators – The ones who play the game
– 13,5% Early adopters – The ones who play the game
– 34% Early Majority – The ones who watch the game
– 34% Late Majority – The ones who watch the game
– 15% Laggards – The ones who have no idea that the game is being played

The Circular Economy model is still in its first stage (2.5% Innovators). The public sector, large, small, medium and micro companies around the world begin to adopt practices that promote this model, as many players develop research processes to create innovative solutions and the decision-making institutions worldwide and in particular the European establish new rules (European Commission’s 2015 circular economy package).

Knowing the markets that are beginning to emerge around the Circular Economy model, how these markets will receive the product or service, in which segment of the diffusion curve of innovation we find ourselves and being able to change the performance strategy according to this position, reveal – attitudes that will confer a great competitive advantage to companies of all sectors of activity.

Entities such as ISQ and the University of Minho, through its Fibrenamics platform and the Center of Waste Valorisation, are institutions that have been promoting innovation in the field of the Circular Economy, through numerous projects developed and implemented and their activities. Fully focused on the business sector.

They are positioned in the 2.5% Innovators group, similar to the companies they support, and assume themselves as institutions that aim to accelerate and support companies in the transition to a Circular Economy.

What about your company, what stage is it in?