This piece was originally published in the September/October 2019 issue of electroindustry.
Mark Kohorst, Director, Environment, Health, and Safety, NEMA
Young, smart, enterprising, committed, “Woke!”—these descriptors come to mind when I recall the crowd that surrounded me at Circularity 19, which took place in June in Minneapolis. Billed as the “largest circularity event in North America,” this three-day conference was all about what the organizers and attendees are promoting as the 21st-century model for conducting business on the global level—namely, the circular economy (CE).
Readers of these pages will be familiar with the CE concept and also know that a NEMA 2019 Strategic Initiative is aimed at assessing the potential value proposition of circularity for manufacturers of electrical products and systems.
In a nutshell, a circular economy seeks to move beyond the traditional “take, make, dispose” approach that characterizes most economic systems. Instead, the aim becomes buying less and reusing more—keeping products, components, and materials at their highest utility and value at all times.
While the core principles underlying circularity may not be new, the macro-level aspirations of circular economy adherents are hard to overstate. The GreenBiz Group (which presented the conference) predicts the CE will be “transformational, disruptive, regenerative and will create opportunities at every part of the economic spectrum”—with the potential to unlock a $4.5 trillion economic opportunity.
Underlying the CE movement is a communal consensus that climate change is real, is existentially threatening, and can only be rectified through drastic action. References to the impending “climate crisis” are not uncommon among circularity fans, with the circular economy put forth as a necessary part of the solution.
That would explain the level of passionate engagement on display throughout the conference in Minneapolis, which registered more than 800 thought leaders and practitioners in the CE space. The goal of the event was to spread awareness about the circular economy and address myths and misperceptions about how to finance it, the impact on the policy environment, and the value proposition that circularity represents to companies and cities.
If the CE advocates are correct, the payoff from widespread integration of circular principles is a better economy, one that produces fairer, environmentally preferable outcomes while generating profits and conserving resources across the globe. Industry buy-in is crucial, with manufacturing playing a lead role.
I attended Circularity 19 with an open mind and a desire to find out which elements of circular thinking make sense for electrical products and systems—and which do not. It’s not a simple determination, given the enormous diversity of our industry and the somewhat revolutionary vision of CE advocates. Simply put, NEMA Member companies will embrace circularity if it provides a competitive edge, increases their bottom line, and requires no compromise to product safety and performance. They will also do so if regulation forces the issue, but it’s always preferable for industry to find its own innovative path in response to societal trends and priorities.
First, there is ample evidence that markets will reward companies that openly emphasize circularity in their business model and investment strategy. It likely will involve a staged process guided by nontraditional notions about the nature of products and relationships with customers, but the potential returns could be substantial.
Second, it’s vital that companies identify where circularity makes the most sense in their product scope and concentrate efforts there. Remanufacturing, for example, was touted at the conference as an extraordinarily high-return venture but is not a viable option for many products. Perhaps the value proposition lies instead in circular supply chains or seeking out next-generation packaging materials.
Truly circular thinking is rapidly expanding the boundaries of what it means to be sustainable. “Cradle to grave” thinking, for instance, has been displaced by “cradle to cradle,” and designers are now advised to design products for their initial use and future uses, as opposed to end of life.
Finally, I’m convinced that large-scale integration of circular principles will require a major “system shift” in some companies, and change like this can be driven only from the top. A rising tide of talented young engineers, designers, planners, MBAs, and “corporate strategists” is ready to provide the brainpower and enthusiasm, but the fundamental transformation they seek must be blessed and promoted by the C-suite. If that happens, circularity may very well move beyond incremental tweaks to a revolution that upends products, services, and systems of commerce.
NEMA Members who attend the 2019 Annual Meeting in Naples, Florida, are encouraged to participate in the Circular Economy Workshop on Wednesday, Nov. 6. NEMA staff and outside experts will present the findings of the ongoing Strategic Initiative and discuss the implications of circularity for the electro-product industry.
To register, go to www.nema.org/AnnualMeeting. ei