Op-Ed: EU Legislation on The Circular Economy Calls for Transition Brokers
15. Sep 2023We need transition brokers, courage, and free data. Those are the three recommendations that three actors give Danish companies and their ecosystems. The recommendations should help the companies as they face even more EU legal requirements on the circular economy
By Julie Hjort, Director of Sustainable Transition – DDC – Danish Design Center; Andreas Hastrup Clemmensen, Chief Consultant, Circular Economy – Danish Chamber of Commerce; Nanna Callisen Bang – Director, Ethical Trade Denmark
Read the article in Danish here
With the EU’s comprehensive and ambitious Green Deal, Danish companies will soon have to meet even more framework conditions and legislative requirements that promote a circular economy. Although we don’t know all the details and consequences of the decisions yet, the new legal framework will undoubtedly be highly gratifying for our environment, climate, and biodiversity. For many companies, however, meeting the existing legal requirements is already a challenge. This applies, among other things, to new rules for packaging, requirements for documentation, and target setting for CO2 emissions in scope 3 from 2023, as well as the EU Parliament’s circular economy action plan, which requires additional measures to achieve a climate-neutral, environmentally sustainable, non-toxic and fully circular economy by 2050.
That is why DDC – Danish Design Center, the Danish Chamber of Commerce, and the Danish Industry Foundation invited 26 business leaders, political actors, and interest organizations to a workshop in the Spring of 2023. The purpose was to prepare recommendations for the Danish companies and their future work to proactively adapt to the requirements. Suppose we, as a combined production and industry sector, succeed in this. In that case, the legal requirements open new strategic opportunities and provide competitive advantages for Danish companies.
In addition to three general recommendations from the authors of this op-ed, we have mapped part of the existing EU requirements. The mapping must make it easier for companies to meet the requirements and, at the same time, be ambitious with their circular conversion. The mapping can be visited here (it is in Danish for now).
"The most crucial recommendation is that more individuals and organizations become
transition brokers"
Julie Hjort, Director of Sustainable Transition – DDC – Danish Design Center, Photo: Oliver Herlitschek
The three overall recommendations are:
1. We need transition brokers – both in business and at a political level
In Denmark, we are hugely divided by sector and industry. This makes the circular transition difficult because the circular economy affects many sectors at once. For example, a material or product has to be handled in new ways throughout its entire life cycle from design, production, sale, take back, reuse, recycling, and decomposition. So who will drive the changeover? Who will take responsibility for bringing actors together to navigate many conflicting interests and create common ground for circular solutions? As an individual company that is part of a linear value chain, it is too huge a responsibility for them alone to undergo a circular transition.
We need brokers who bring together companies and organizations across sectors, take care of the dialogue, and create safe development spaces for an entire value chain.
Therefore, the most crucial recommendation is that more individuals and organizations become transition brokers. The term comes from the former Dutch professor and former Minister Jacqueline Cramer. Through several years of focused work, Cramer has taken on the broker role to create a circular economy in the Netherlands. She argues that precisely this role is absolutely crucial. Both public and private actors need a neutral mediator when they are to transition together.
The broker’s role is to orchestrate the transition process from linear to circular, and they can accelerate this from a neutral position. They are credible, trust-building, and seek to build coalitions with actors willing to take transformative steps forward. Change brokers from several levels of society are needed – companies that create new joint alliances and partnerships and business organizations that manage to bring together partners for knowledge sharing and collaborative new solutions. It is just as urgent to have representatives across agencies and ministries who can coordinate, create dialogue, and provide access to political knowledge across areas of responsibility, bring together one or more sectors, and work to remove legislative barriers.
Fortunately, we have several strong examples of transition brokers at home. The Danish Chamber of Commerce acts as a mediator when it works with the entire value chain to increase the reuse and recycling of plastic packaging through The Cooperation on Plastic in the Retail Sector. Ethical Trade Denmark is a transition broker when, in national multi-stakeholder alliances, they bring together entire value chains in the work of system transformation towards greater sustainability and responsibility, e.g., within the coffee, soy, palm oil, and fishing alliances. DDC – Danish Design Center is a transition broker when 30 experts in sustainability and circular economy formulate the mission of creating an irresistible circular society and define 10 actions we must all take to realize the mission.
"In cooperation with transition brokers and their value chains, companies must develop, test, fail, learn, develop, and test again until they have well-functioning companies contributing to a circular society"
Andreas Hastrup Clemmensen, Chief Consultant, Circular Economy – Danish Chamber of Commerce
2. We must be courageous
The second absolutely crucial recommendation is that companies and the actors around them must be brave. Core actors such as the Ellen MacArthur Foundation, for example, also recommend this – because many circular and sustainable solutions exist, but we hesitate to implement them. We will make mistakes until we find the best ways to create a circular society and meet the EU’s requirements. In cooperation with transition brokers and their value chains, companies must develop, test, fail, learn, develop, and test again until they have well-functioning companies contributing to a circular society.
Courage is often found in individual leaders and employees who dare to drive change. We have several brave companies and players here at home. Some of what they have in common is that they share knowledge and experience with competitors. They talk about their process and transformation while in progress – before they are “at the finish line.” That change – meaning that companies can and dare to communicate about the process – requires effort from both sides. The recipients, and society, must understand that adjustment processes are often enormously complicated and take time. It’s terrible to do nothing – but it’s good and necessary to be active and, at the same time, share the experiences you gain. When companies and actors do this, they help build competencies and create cross-collaborations in their value chains, but probably also outside them. And in the end, it benefits us all.
"Although a lot of responsibility rests with the companies, the task – and not least the effect when we succeed – is far greater than the individual company"
Nanna Callisen Bang – Director, Ethical Trade Denmark
3. Set data free
Our third recommendation is about all the existing data and the data that will come, which is crucial for the circular transition. The data is stored, for example, in companies, municipalities, and with authorities. Suppose companies are to have a chance to succeed in the circular transition, meet the EU’s upcoming requirements for product data and the digital product passport, and at the same time benefit from them. In that case, all public data dealing with the circular economy (and not just waste) should be gathered in one place and made freely available. Data collection without being used to drive the circular transition will be seen as an administrative burden by the companies. Therefore, it is essential to release all the newly collected information so that green data becomes a critical tool for the transition brokers and, not least, the companies.
The transition to a circular economy requires new processes and collaborations across the value chain, often challenged by closed rights and a need for more transparency. Suppose companies share non-business-critical data to a greater extent. In that case, we create a more substantial basis for increased collaboration, the development of new technological solutions, and more robust common standards and formats for sustainability in the industry. Openness about data from both the private and public sides will therefore be a prerequisite for, e.g., developing new business models that rethink the use of resources and a well-functioning market for recycled materials.
Huge potential awaits
If companies, authorities, and other relevant actors in our society succeed with the recommendations, there is enormous potential for both our planet and the economy. And although a lot of responsibility rests with the companies, the task – and not least the effect when we succeed – is far greater than the individual company. We look forward to continuing the collaboration.
- Flexible legislation
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