THE GLOBAL MANUFACTURING & INDUSTRIALISATION SUMMIT
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KNOWLEDGE HUB

The coronavirus changed the world in just a few weeks. As the disease spread, borders, offices and factories closed, planes stopped flying and millions of people were quarantined in their homes. Whilst the initial focus was rightly placed on the health implications of the virus, as the peak passes in many economies, it is now time to focus on the future.

Exit plans that allow business, manufacturing and shops to slowly and carefully open up will help reignite economies and encourage life to return to the streets. Yet it is becoming increasingly clear that there will be a new normal – defined by social distancing and an ever-present threat of a new wave of infections.

National lockdowns a gave a clear signal of the severity of this virus, but what also became clear, was the sky, the rivers and the oceans as commuters and transport stopped overnight. Air pollution levels in China dropped by roughly a quarter over the course of a month and nitrogen dioxide levels, a pollutant primarily from burning fossil fuels, were down 30%, according to NASA.

Meanwhile in the Indian region of Punjab, residents can see the Himalayan mountain range from more than 100 miles away for the first time whilst in Delhi, the air quality index (AQI) levels – usually a severe 200 and a life-threatening 900 on a bad day (above 25 is deemed unsafe by World Health Organization) – have regularly fallen below 20 as the city’s 11 million registered cars were taken off the roads and factories and construction ceased.

Given these significant side effects of the lockdowns, it could be that the coronavirus pandemic has actually created a once in several generations opportunity to reset society and realign values. Therefore, it seems prudent to attempt to combine tackling both the virus, and the climate crisis in whatever global restoration strategy emerges. Because, although a difficult situation for both society and business, how we manage, prevail and evolve from this experience will be part of defining the future of our species and the planet.

Recent trends indicate that consumers are shopping based on necessity meaning old purchase habits and consumption without consideration is declining. If these consumption habits could be encouraged, they could help create and accelerate a new, global economic paradigm based on empathy, collaboration, sustainability and consciousness of waste.

The circular economy is a concept that moves past the traditional, linear model of production and consumption – produce, use, discard – towards a new, “bio-based” economy that reuses and recycles materials, water and energy involved in the production process to eliminate waste.

Whilst it may sound like an idea born of increased awareness of the global climate threat, it is a concept that has been around for decades. Indeed, during WW2, President Franklin Roosevelt’s U.S. created a rubber drive and asked Americans to contribute everything from tyres, raincoats and hoses to shoes and gloves collecting 450,000 tons of rubber collected and repurposed.

Whilst the circular economy model has so far failed to break into the mainstream, it had been quietly gaining traction as governments and businesses start to “future proof” their operations by introducing processes and products that ensure life beyond the linear. For example, in the apparel industry, The North Face’s Clothes The Loop approach and Patagonia’s Worn Wear programme both operated on circular principles, demonstrating the long-term economic and environmental opportunity this approach can provide, and during the pandemic, others have joined in. For example, San-I-Pak and the Battelle Memorial Institute; and medical centers such as Providence St. Joseph Health are all using commonly found sterilisation agents, as well as steam and vaporised hydrogen peroxide to decontaminate face masks for prolonged use and prevent waste.

Indeed, the worldwide scramble to secure personal protective equipment (PPE) for health workers has defined the coronavirus as whilst it is sparking collaboration and pockets of circular economy principles, it also highlights the plight of the climate change strategy. For example, COVID-19 saw demand for plastic-based PPE sky rocket, causing a focused increase of the global reliance on plastic. Part of this issue is that while the coronavirus caused a collapse in oil demand, as the price of plastic is closely linked to the price of oil, the crash meant that the price of recycled plastic rose to be much higher than virgin plastic. This means it now makes more economic sense for manufacturers to use new plastic instead of recycled plastic.

“The last time we saw an oil price shock this big was the global financial crisis in 2008. Then, the volume of plastic recycling in China fell from 4 million tonnes to 1 million tonnes,” said Martyn Tickner, the former chief executive of Bangkok-based plastic producer HMC Polymers, who recently joined a plastic waste reduction firm.

However, whilst the demand for these products is there, it seems that many of the manufacturers responsible for producing and supplying the products remain committed to reducing plastic waste. For example, Unilever, one of the world’s largest packaged goods firms, said its commitments “remain unchanged”, and the company has “robust plans” to meet its target of increasing the use of recycled plastic in its products to at least 25 per cent by 2025. The company estimates that just 5 per cent of its 2019 plastic footprint was recycled plastic. Meanwhile, Henkel is just as confident that the price of recycled plastic will not affect its sustainable packaging ambitions, and has committed to meeting a newly announced target of using 30 per cent recycled plastic in its products by 2025.

Therefore, to ensure that economic restoration is built to solve two global challenges concurrently – that of the virus and climate change – more complex policies against plastic pollution must be established to encourage smaller producers to also remain committed to the reduction of plastic.

In addition, organisations should invest more in sustainability, endorse responsible consumption, and boost investments in research and development that help create a long-term, sustainable solution to the coronavirus crisis.

If these circulars policies can be established, and consumer behavior continues along the trend of focusing on necessities and considerate consumption, the post-coronavirus world could look very different. For example, countries relying on imported energy will start developing energy sources that can be locally obtained, sparking innovation and allowing solutions in solar, wind and water to leapfrog traditional energy sources.

In addition, restrictions on international transport that prevents food and groceries from being imported could encourage sustainable and urban farming allowing residents to provide for their local communities.

The remarkable situation we are now in has exposed the fragility of the dominant economic model to prepare for and respond to crisis and shocks. Therefore, economic restoration must be centered upon long-term, risk-reduction and sustainable fiscal thinking that turns away from the current focus on delivering profits and infinite growth. As the Planetary Emergency Partnership explained in a call to action to global leaders in March; “This is an unprecedented opportunity to move away from unmitigated growth at all costs and the old fossil fuel economy, and deliver a lasting balance between people, prosperity and our planetary boundaries”.

By steering innovation towards reaching public goals over private ones, the circular economy could contribute to the creation of stronger communities, more resilient economies and sustainable businesses.

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