3 ways to collaborate better for a circular economy
- Only 8.6% of the world is currently circular, and that proportion needs to nearly double to reduce the global carbon footprint and address other critical environmental challenges.
- Collaboration is necessary to achieve a successful circular economy, but little engagement means circular innovations are costly with low levels of adoption.
- Better collaboration can result from cross-industry solutions, research and development (R&D) partnerships, and enhanced commercial viability.
Circular economy solutions are essential for sustainable growth and climate action. But the circular economy has not accelerated as only 8.6% of the world is currently circular. This proportion needs to nearly double to reduce the global carbon footprint and address challenges such as waste and resource depletion.
Collaboration between actors is essential but difficult to achieve. In the traditional economy, actors at different ends of the value chain rarely interact with each other, so circular innovations are often costly with low levels of adoption.
To make meaningful progress in circularity, we need to create a collaborative ecosystem, turn waste into treasure, and scale it up. Singapore is excited about how such collaborations can reduce barriers to the adoption of circular innovations by different sectors. Here are some promising actions.
3 steps for better collaboration and a stronger circular economy
1. Transversal solutions
Coordinating multiple sectors, geographies and stakeholders is a big challenge. Reducing plastic waste, for example, involves more than just recyclers managing discarded plastics. To ensure products are properly recycled, consumer brands and waste management companies must work together to increase packaging collection from consumers.
Further up the value chain, chemical companies that create plastic resins need to work with brand owners to improve packaging recyclability. Clearer global standards on the circularity of recycled products would also provide consumers with greater certainty about what they are paying for and increase their willingness to pay. This in turn could spur more investment in recycling projects. Today, however, cooperation between governments, businesses and consumers is limited to address these cross-cutting issues.
the Wedding rings Partnership with the Plug and Play Innovation Platform – which connects more than 30,000 start-ups, companies, VCs and other industry players – helps promising start-ups tackling plastic pollution grow. In 2020, 11 start-ups from across the value chain, with solutions ranging from smart household waste management tools to robots that collect floating waste in waterways, were connected through their 90-day accelerator to investment and support for large multinationals.
WWF Singapore has also encouraged collaborative action through its Plastic ACTion (PACT) initiative, which recently launched a pilot project in Singapore aimed at reducing e-commerce packaging waste. The initiative brings together sustainable packaging and logistics providers, retailers and consumers to explore a circular packaging system.
Such cross-industry collaboration and pooling of resources around common problem statements can make a difference, as stakeholders across the value chain are mobilized to co-create solutions.
2. Research and development (R&D) partnerships
An important part of circular economy solutions will be based on new sciences and technologies. These needle-moving solutions are already present in areas such as circular materials and resource recovery, but many are currently at a low level of technology readiness.
For example, biodegradable product packaging could reduce plastic pollution and help global consumer goods companies meet their sustainability commitments. However, significant R&D is still needed to make it scalable and cost effective.
While some consumer goods companies have strong in-house research teams, all will benefit from collaborating with external academic institutions to complement their in-house capabilities. Promoting strategic R&D partnerships between private companies and leading research institutes translates academic research into concrete applications.
There are already several examples of this indeed. Global consumer goods companies like Procter & Gamble and Nestlé, many of which have their APAC headquarters in Singapore, are partnering with local research institutes, such as the Agency for Science, Technology and Research (A*STAR) Sustainability Institute for Chemicals, Energy and Environment (ISCE2). These partnerships can help accelerate the development and commercialization of circular innovations.
3. Strengthening commercial viability
Even when circular innovations have reached a sufficient level of technology readiness, commercially viable business models can be elusive and difficult to scale. Circular economy start-ups often struggle to grow, fund themselves and access the market.
Tech-focused start-ups typically don’t have the business expertise to assess product-market fit or develop business proposals. Pilot projects are also capital-intensive for start-ups that face difficulties obtaining funding. Until recently, few investors focused on circularity, especially in Asia. But that could change with the emergence of funds for early-stage circular businesses, like Regeneration.VC and the Circular Innovation Fund (CIF). Finally, circular innovators may not know or have access to established companies that are willing to pay a premium for their products and services.
In light of these challenges, the circular economy start-up scene needs programs to help innovators refine their business models and growth plans, raise capital and access buyers for their solutions. .
One such example is HyperScaleAsia’s first tech waste accelerator launched by Enterprise Singapore (ESG) and StartupX in April 2022. The program provides plastic and e-waste recycling start-ups with the knowledge to create scalable products and sustainable business models. It also connects them with regional players to refine their product-market fit and with sustainability and waste-focused venture capital firms and impact investment funds for financing.
Open innovation platforms, such as the recent circular economy reverse pitch jointly organized by SGInnovate and Scale 360°, also facilitate proof of concept and go-to-market opportunities for promising startups, such as the possibility to partner with companies to test and scale solutions.
For well-established companies, New Ventures, the business development arm of the Economic Development Board of Singapore (EDB), has actively supported companies to create new sustainability-related businesses from Singapore. A joint incubation with food conglomerate Dole Sunshine saw it launch its Specialty ingredients unit, which converts pineapple fruit waste into high value revenue streams such as enzymes, extracts and oils. The company received structured support, including user testing, portfolio building and development of a go-to-market strategy.
Companies looking to incubate and build businesses in this space can join EDB and our partner venture capital studios on the Business launch to bridge the gap for businesses and investors looking to accelerate their circular solutions.
Spin the wheel together
Achieving the circular economy is a challenge but essential. Each stakeholder is the key to the solution.
Targeted programs and partnerships will be an integral part of cooperation between industries and countries and will help companies pool their resources to collectively actualize their efforts.