Jon Haag is the Chief Circular Officer at the aptly named &REPEAT, a Swedish start-up striving to make the world more circular. As well as being an expert on the circular economy, he also, having worked with fibre-based materials for 25 years, knows a thing or two about packaging, an industry that will be critical to creating a circular economy.
“In its Circular Economy Action Plan, the EU has said that packaging, textiles, plastics and food are four of the seven most critical industries to make more circular,” Haag says. “Hence, packaging will be on top of the agenda. Materials contribute to about 40% of all climate impact today, and that share will grow to more than 50% in the next 10-20 years or so. Packaging is a very large part of these material streams. Packaging is also an everyday touchpoint for almost everyone on the planet nowadays, making it a signal value for change. That is one reason for us at &REPEAT to incentivise and harmonise high quality material flows like takeaway packaging and move from single-use to multi-use.”
Many people believe that a circular economy, in which all forms of waste are severely reduced, is vital for dealing with global challenges such as climate change and resource scarcity. It is a concept that governments are starting to take seriously and one that Haag believes is the next stage of sustainability thinking:
“For me, sustainability 1.0 is when you talk and report about corporate social responsibility to look good. Sustainability 2.0 is when you try to incorporate sustainability into your business, by showing that if you do business with us you are going to be 10 or 30% more sustainable than by doing it with others. But when you stop talking about value chains and focus on value cycles, then you are talking about the circular economy, which is like sustainability 3.0. This is a transformation for businesses – going from linear to circular. It means that companies have to optimise much more to be the very best in their part of a value chain, and that they have to fit in to other value cycles. To make the improvements the world needs, changes must be made at all stages of value cycles at the same time. It is no longer enough for a company to simply say that they are fossil free in their part of the cycle.”
Haag uses Iggesund as an example to demonstrate the point: “If Iggesund improve their cartons by a few percent, the impact in the value cycle might not be noticed. But if they work with others on how to use the material differently, how to reuse it, and recycle it or incorporate it into products and services again and again, then the impact will be very high. Also for our company, &REPEAT, we must get partners in the value cycle on board for a journey together. Otherwise, the changes needed will take too long time to establish.”
Consumer demand, followed by legislation, will be the main driver for a transition towards a circular economy, Haag says. And that demand is already putting pressure on big global brands to change, and that requires collaboration. “A big drinks brand, can’t for example, have its own recycling system in every country that it operates in,” Haag says. “They need to work together with competitors. The transition will require the creation of new material infrastructure and new packaging systems. How involved a company wants to be will depend how the company defines its role and how much of the future cake it wants to grab. But it will affect everybody, as it is not a value chain anymore, it is a value cycle.”
For packaging in particular, Haag says that the world’s packaging portfolio needs to be simplified, with use of material and product and packaging design focussed on the recycling or reuse systems of today and the future. And to do this, companies need to have a better understanding of what happens now in the recycling systems for the materials and products they currently use.
“If I use fibre-based packaging, I should have a good understanding of what happens in the fibre-based recycling processes. In a circular economy, where we need to use materials several times and for longer periods, we need to choose packaging designs and materials for the most efficient material ecosystems.”
- Jon Haag
Haag points out here though that even the best packaging material systems in the world will have leakages, so the material system will always need to be refilled with virgin material. “That should be renewable material made from photosynthesis,” he says. “No other material base can be as effective as fibre-based materials. So there will be a huge increase in value for fibre-based materials in packaging and other sectors.”
A big finance flow will help the goals set by the EU for recycling within the European Green Deal to be reached, Haag believes. “We think that we need to quadruple investments in both material recycling and material infrastructure. The way that we collect and sort materials today and the way we design for circularity and find new methods for packing food is under invested. What we do today is try to improve the material for existing packaging, but that is not enough. The green deal might however allow for this quadruple investment increase that we all need.”
But in actual fact, Haag believes, much of what we need for a circular economy we have had before. We just need to recreate some of the business models that used to exist.
“Everything before World War Two was reused,” he says. “But we have forgotten this model. In the 50s and 60s plastics boomed, and then we started to have more single use items. In Sweden, until the late 90s, we had a reuse model for glass bottles. They were collected and washed and refilled again. Now we crush them. Today we buy, use and throw away. We have destroyed a lot of reuse models that existed before, so the barriers to actually having an efficient reuse model are higher today than they were 50 years ago. But reuse and repair or refurbish are the key business models that we need to develop again.”
For a company to start taking a circular approach to its business, Haag says that it must see itself as a valid part in many steps of the value cycle. Then it must change the business model and start to experiment with new circular business models, such as rental or pay per use. And this has to be incentivised from top management. “Find ecosystems and platform thinking where you offer services or function together with partners,” he adds. “If we look at what we do wrong today, we are still at sustainability 1.0 or 2.0. We create lots of innovation or improvement projects that we just put into our existing business models. It never works. If you are Iggesund, and you still charge for cartonboard per ton, that won’t solve the problem. But if we think more about how to do things to actually increase value several times and for a longer period, and adapt how we make business out of that, the circular approach will have a clear and lasting impact”