10 December 2014
Remanufacturing, the circular economy and China
James Beresford, Senior Programme Manager
10 March 2015
With raw material supplies and the environment feeling the strain of a burgeoning population, various industries are exploring sustainable business ventures and realising the financial potential in such endeavours.
James Beresford spoke to Reman Industry Focus (RIF) about the role the University of Cambridge Institute for Sustainabiity Leadership (CISL) plays in aiding sustainable industries such as remanufacturing. James is a Senior Programme Manager at CISL, leading the design and development of CISL's online courses.
RIF: Can you tell me a bit about the work of CISL?
James: The University of Cambridge Institute for Sustainability Leadership – or CISL as we're known – is quite a unique place. We are an Institute within the University of Cambridge, which brings together academia with business and policy makers to develop the leadership capacity required to tackle critical global challenges such as climate change and resource security.
We help businesses and business leaders to align their growth ambitions with sustainability. We do this because we believe the private sector will play a central role in delivering the technologies, products and services required to transition to a low carbon, sustainable economy.
We provide a strategic forum for senior decision-makers to explore innovative and pragmatic approaches to reconciling profitability and sustainability – through executive education programmes like The Prince of Wales's Business and Sustainability Programme. The programme is designed to deepen leaders' understanding of the social, environmental and economic context in which they operate and helps them respond in ways that benefit their organisations, governments and society as a whole. We also support leadership at the sector and systems level through our business platforms, which convene business leaders to tackle shared problems within rapidly evolving areas such as natural capital management or energy and climate change policy.
RIF: In which situations has CISL's work been involved with the remanufacturing industry?
James: Through our executive programmes we work with senior decision-makers from resource-intensive companies, so we often work with the customers of the remanufacturing industry. I'll give you two examples from the automotive and manufacturing industries. We delivered a series of programmes for different business functions from car manufacturer Jaguar Land Rover to help senior decision-makers develop a common understanding of sustainability challenges, including the business implications of climate-driven market disruptions and access to raw materials. This process has enabled the sustainability function to gain much stronger traction with other business functions internally. As you may know, Jaguar Land Rover has focused on securing the supply of aluminium through recycling and remanufacturing and aluminium is a key material for light-weighting their vehicles and reducing lifecycle greenhouse gas emissions.
Interface, the pioneering carpet tile manufacturer, commissioned a series of programmes to support their vision of a sustainable value chain. We brought key individuals from Interface together with their main suppliers to build common understanding and a shared vision to operationalise the ambition of a closed-loop, sustainable value chain. These conversations are crucial to build trust and identify ways to re-think the value chain. I believe this type of partnership will be crucial to building resilience, unlock new ways to manufacture and support the transition to a closed-loop economy.
RIF: Can you tell me about the growing importance of the circular economy? Can you elaborate in relation to China and furthermore remanufacturing?
James: As we all know, China's remarkable development has driven rapid growth in material consumption, with China now accounting for about half the world's cement, 30 per cent of steel and 20 per cent of aluminium. With household income projected to grow rapidly, perhaps tripling between 2012 and 2030, our current development pathway will place unprecedented strain on resources and ecosystem services. Within this context circular economy concepts provide an opportunity to decouple growth in material consumption from raw material supply, in the process reducing extraction of raw materials and associated environmental externalities. Chinese leaders have recognised the value of this approach, both in terms of achieving resource efficiency and boosting the competitiveness of the manufacturing sector, and incorporated recycling materials and remanufacturing of products within the 12th Five-Year Plan.
RIF: Can you tell me about CISL's work related to China and the circular economy; I believe CISL's sustainability work has involved the Chinese government? Has remanufacturing fitted into this?
James: This year CISL has run several executive programmes for groups of business and government leaders from China, including a major Chinese bank, mayors and senior government officials, as well as members of a prominent entrepreneurs' society.
On these programmes we challenge participants to consider circular economy and remanufacturing business models amongst a portfolio of other approaches, such as product leasing. We believe 'life-cycle thinking' is a simple but fundamentally important skill for current and future business leaders, and indeed people across organisations. Our online course the Business & Sustainability Programme Online is designed to meet this need and to reach a wider range of people within an organisation through remote learning. The platform has been developed to introduce a number of case studies to engage learners in life-cycle thinking through simulations, role-play and organisational assessment.
For more specific engagements, our position within the University of Cambridge enables us to draw on world-leading researchers and incorporate their insights into the role of remanufacturing.
RIF: What are the biggest challenges facing the development of a circular economy and remanufacturing, worldwide and in China?
James: There's a great quote from William Gibson that says "the future is already here, it's just not very evenly distributed." This seems to be true when we look for the technological, organisational and behavioural changes that will keep economies operating within planetary boundaries – a stable, habitable climate, sufficient freshwater, etc. – while meeting human development needs. Many of the ideas and innovations – including circular economy and remanufacturing business models – are already in existence, just not deployed at an adequate scale. Great technological and business model innovations are emerging everywhere, including China – as the Sustainia 100 list demonstrates. Of course Cambridge is brimming with new innovations. Just recently I saw that Reduse, a start-up grown from the Engineering department, won seed funding for its 'unprinter' device that strips the print from paper so it can be printed on again in the office, without recycling.
Innovations such as these will only move the dial if they can be scaled rapidly – and of course there are many systemic challenges to doing so. Reshaping the linear production model that has dominated the past 250 years or so will require public policy changes that create an enabling environment and shifts in demand and consumer behaviours – in short transformational change.
It will come as no surprise to hear that we see education as key to unlocking new thinking and building a shared understanding of the transformational change required. Decision-makers have to engage with the implications of a growing global 'middle class', increasing urbanisation, resource pressures, destabilising climate disruption and water and food insecurity. Set against this backdrop, any innovations that offer radical resource and carbon efficiency – creating more economic value per unit of material throughput, and creating value from waste – start to make clear business sense.
RIF: How have companies gained from working with CISL? What could a company, which remanufactures, gain from working with CISL?
James: As I mentioned earlier, we often work with the customers of the remanufacturing industry. To understand what they get from the relationship, I think it's best to hear directly from one of the companies themselves. The following quote is from Ian Ellison, Sustainability Manager at Jaguar Land Rover (JLR), part of the Tata Group of companies, following the delivery of a custom executive education programme at Cambridge.
"The JLR Sustainability Committee needed a means to rapidly develop a common understanding of sustainability issues, in the context of global system pressures, for its members and close associates.
Not only did the event instill the desired level of understanding and passion amongst delegates but it triggered appropriate follow-on actions (which) included much deeper engagement with several functions not previously central to sustainability activities.
On reflection, it's difficult to imagine how else we could have brought about such a step change in understanding and engagement, the repercussions of which will be enjoyed by many stakeholders, including customers, employees and the JLR supply chain."
Ian Ellison, Sustainability Manager, Jaguar Land Rover
First published in Reman Industry Focus.