Presentation for CE100 Brasil member use

TODAY’S TAKE-MAKE-DISPOSE ECONOMY New products = new raw materials Recycling at “end-of-pipe” Waste is chronically high

A COMBINATION OF RISKS AND OPPORTUNITIES A further 3 billion middle-class consumers will enter the market by 2030 fuelling demand ...

A COMBINATION OF RISKS AND OPPORTUNITIES Socioeconomic development

A COMBINATION OF RISKS AND OPPORTUNITIES Living Systems

A MODEL WITH EMBEDDED STRUCTURAL LOSSES Faults in the linear model means great economic losses and negative externalities BUILT ENVIRONMENT MOBILITY FOOD Cars remain parked 92% of the time When moving, they usually carry 1,5 people at a time 30.000 lives are lost in accidents and, 1 out of 4 times, this results in irreversible lesions 30% of waste sent to landfill in Europe originates from construction (in Brasil, approximately 50%) Offices are occupied only 40-50% of the day on a working day 11 million empty homes in Europe >100Mi tonnes of food lost annually in Europe 50% lost along the production chain 97% of global food residue is sent to landfill or ~USD 300 bn Soil degradation is around 30-80% in Europe SOURCE: “Growth Within: A Circular Economy Vision for a Competitive Europe”, Ellen MacArthur Foundation, SUN (Stiftungsfonds für Umweltökonomie und Nachhaltigkeit) and McKinsey Center for Business and Environment, 2015

THE NEW PLASTICS ECONOMY A structured approach The New Plastics Economy is an ambitious, three-year initiative to build momentum towards a plastics system that works. Applying the principles of the circular economy, the initiative brings together key stakeholders to re-think and re-design the future of plastics, starting with packaging. With the aim to create an effective after-use plastics economy; drastically reduce leakage of plastics into natural systems and other negative externalities and decouple plastics from fossil feedstocks, the New Plastics Economy works with five interconnected blocks to create the necessary conditions for redesigning the system: DIALOGUE MECHANISM Cross-value chain collaboration is at the heart of the New Plastics Economy. GLOBAL PLASTICS PROTOCOL A common target state to innovate towards, to overcome existing fragmentation and enable the creation of effective markets. INNOVATION MOONSHOTS Mobilising innovations that can scale across the system, to re-define what’s possible and create the conditions for a new economy. EVIDENCE BASE A robust evidence base to guide improvement and inform the global debate. OUTREACH Engaging stakeholders to learn, to inform, and to amplify what works. WORLD ECONOMIC FORUM, ELLEN MACARTHUR FOUNDATION, MCKINSEY & COMPANY, THE NEW PLASTICS ECONOMY ELLENMACARTHURFOUNDATION.ORG/PUBLICATIONS

Visit our website: www.newplasticseconomy.org FIND OUT MORE Visit our website: www.newplasticseconomy.org Follow us onTwitter: @newplasticsecon WORLD ECONOMIC FORUM, ELLEN MACARTHUR FOUNDATION, MCKINSEY & COMPANY, THE NEW PLASTICS ECONOMY ELLENMACARTHURFOUNDATION.ORG/PUBLICATIONS

Various factors challenge the linear model DRIVERS FOR CHANGE Various factors challenge the linear model PRICE VOLATILITY ECONOMIC AND STRUCTURAL LOSSES DEMOGRAPHIC TRENDS

Various factors challenge the linear model DRIVERS FOR CHANGE Various factors challenge the linear model URBANISATION ACCEPTANCE OF NEW BUSINESS MODELS TECHNOLOGICAL ADVANCES

REGENERATIVE AND RESTORATIVE BY DESIGN CIRCULAR ECONOMY: REGENERATIVE AND RESTORATIVE BY DESIGN

BUILDS ON SCHOOLS OF THOUGHT

A REGENERATIVE ECONOMY …keeping products, components and materials at their highest utility and value, at all times …eliminating the concept of waste, with materials ultimately re-entering the economy at end of use as defined, valuable technical or biological nutrients

RETHINKING VALUE CREATION Three guiding principles to the circular economy Preserve and enhance natural capital by controlling finite stocks and balancing renewable resource flows. Optimise resource yields by circulating products, components, and materials at the highest utility at all times in both technical and biological cycles. Foster system effectiveness
 by revealing and designing out negative externalities.

A REGENERATIVE ECONOMY BY DESIGN 1 Serve and enhance natural capital by controlling finite stocks and balancing renewable resource flows Renewables Finite Renewable flow management Stock management Farming/ collection Biochemical feedstock Parts manufacturer 2 Optimise resource yields by circulating products and materials at the highest utility at all times in both the technical and biological cycles. Regeneration Product manufacturer Recycle Refurbish/ remanufacture Service provider Biogas Reuse/redistribute Anaerobic digestion/ composting Cascades Maintenance 3 Foster system effectiveness by revealing and designing out negative externalities. Extraction of biochemical feedstock Collection Collection As you can see on the chart, Biological materials cascade and re-enter the biosphere as nutrients that can biodegrade and rebuild capital. Technical materials remain in circulation at the highest possible value, with minimum loss of quality and without entering the biosphere. In terms of terminology (how we use it): Recycling: recovery of materials Remanufacturing: Recovery of parts or components, in an ‘as new’ state and often guarantee. These parts and components can be either used for the same product group but also for different applications (e.g., a pump) Refurbishing we refer to for the overhaul of products, upgraded for the same purpose (e.g., exchange of cover of a mobile phone) Reuse (think e-bay, for example) No Waste, just resources Optimise, intensify, loop, substitute and dematerialise Closed loop and open loop systems Inner loop and outer loop systems Design for systems, in context Cross value chain and business ecosystem solutions New era of technology enabled “systems” transformation Minimize systematic leakage and negative externalities

THE COMPELLING BUSINESS RATIONALE €1.8 tri in benefits for Europe by 2030 in mobility, food and the built environment in a circular economy development path Trajetória de desenvolvimento atual Current development path Circular development path OVERALL BENEFITS EUR 0.9 trillion1 EUR 1.8 trillion1 DISPOSABLE INCOME 7% 18% GDP 4% 11% RESOURCES AND EXTERNALITIES 31% emissions 22% primary material consumption 48% emissions 32% primary material consumption 1 Reduction in resource, non-resource and externality cost SOURCE: “Growth Within: A Circular Economy Vision for a Competitive Europe”, Ellen MacArthur Foundation, SUN (Stiftungsfonds für Umweltökonomie und Nachhaltigkeit) and McKinsey Center for Business and Environment, 2015

THE COMPELLING BUSINESS RATIONALE Net material savings in billions of USD per year1 Durable Goods Fast Moving Consumer Goods $145 Motor Vehicles $ 98 Equip. and Machinery $ 67 Electric Machinery $ 39 Other Transport $ 29 Furniture $ 82 Others $194 Packaged Food $ 111 Clothing $ 87 Drinks $ 70 Fresh Food $ 45 Others $ 630 $ 706 1 Net material cost savings SOURCE: “Towards the Circular Economy – vol. 1 and 2, Ellen MacArthur Foundation and McKinsey Center for Business and Environment, 2011, 2013

VALUE IN LOOPS The power of the inner circle The power of circling longer The power of cascading The power of pure inputs How does this model create value? We differentiate 4 important themes:

BUILDING BLOCKS OF A CIRCULAR ECONOMY Circular Economy Design New Business Models Reverse Cycles Enabling System Conditions How does this model create value? We differentiate 4 important themes:

THE ReSOLVE FRAMEWORK ReGENERATE SHARE EXCHANGE OPTIMISE VIRTUALISE Regenerate and restore natural capital EXCHANGE SHARE Select appropriate resources and technologies Maximize asset utiisation OPTIMISE VIRTUALISE Avoid resource use and deliver utility virtually Optimise system performance LOOP Keep products and materials in productive cycles SOURCE: Adopted from: ‘Growth Within: a circular economy vision for a competitive Europe’, Ellen MacArthur Foundation, SUN, McKinsey Center for Business and Environment

THE ReSOLVE FRAMEWORK But what are the practical building blocks? Radical Design – designing for disassembly, design for recovery – could involve modularisation, standardisation, clip-hold-assembly, design for cascade, considered material choice Innovative business models – New business models that see the consumer as user, offer a performance contract or incentivise take back or sharing (→ allows manufacturer to better control material flows and reach required scale for reverse operations; access to higher value items for customers) Reverse logistics – Improving collection systems so that they are user-friendly, cost effective and preserve quality of product. Set up reverse treatment operations at scale, and to the same standards as primary manufacturing Enablers for cross-sector and cross-cycle performance – pubic awareness building, education, R&D; legal and fiscal measures; public investment and procurement; collaboration (e.g., voluntary industry standards)

THE ELLEN MACARTHUR FOUNDATION The Ellen MacArthur Foundation works across four areas, with the aim of accelerating the transition towards a circular economy: INSIGHT & ANALYSIS EDUCATION & TRAINING BUSINESS & POLICY COMMUNICA-TIONS & PUBLISHING Providing robust evidence about the benefits of the circular economy transition Inspiring learners to re-think the future through the circular economy framework Catalysing circular activities across the global economy Developing the conceptual framework and celebrating best practice

INSIGHT & ANALYSIS Providing robust evidence about the benefits of the circular economy transition Previous analyses outlined a trillion dollar opportunity: Further research published in 2015 confirmed the positive effects of a circular model on the economy, society, and the environment, and looked at enablers: 1st report focused on the medium lived complex goods and detailed a USD 630 billion of net material cost savings per year in the EU. 2nd report focused on the fast-moving consumers good and detailed a USD 706 billion of net material cost savings per year, globally. 3rd report, in partnership with the World Economic Forum, focused on actions to accelerate the scale up across global supply chains. Growth within – A circular economy vision for a competitive Europe: Outlining opportunities for three core human needs (housing, mobility, food), with a potential of 7% additional GDP growth by 2030 vs current development path and a reduction of CO2 emissions by 48% vs 2012 levels. Delivering the circular economy – a toolkit for policymakers: Providing a set of tools for policymakers who wish to embark on a circular economy transformation, and a concrete example for a pilot country (Denmark). The New Plastics Economy – launched in Davos at the 2016 WEF, as one of the results of the partnership with WEF and McKinsey & Company on Project Mainstream, the report outlines the future of plastics in a circular economy Intelligent Assets: unlocking the potential of a circular economy – one of the results of the partnership with WEF and McKinsey & Company on Project Mainstream, the report analyses the opportunities of digitalization in the 4th digital revolution in the transition to a circular economy. Ongoing / in scoping Biocycle analysis: Opportunities and economic value assessment for the biological cycle, with emphasis on cities as nutrient concentrators.

Inspiring a generation to re-think the future EDUCATION & TRAINING Inspiring a generation to re-think the future Pioneer Universities Pioneering new approaches to teaching, learning & research programme around CE Schmidt MacArthur Fellowship Programme Building a global partner university ‘network of excellence’ in the top design engineering and business schools Disruptive Innovation Festival Exploiting informal education as a global ideas dissemination model in an online month long festival /MOOC

Catalysing circular activities across the global economy BUSINESS & POLICY Catalysing circular activities across the global economy Global Partners Close collaboration of the Foundation with its Global Partners Google, Cisco, Kingfisher, Philips, Renault, Intesa Sanpaolo, H&M, Unilever and Nike. Goal: Demonstrate circular solutions at scale. CE100 (international and local networks) Global innovation platform bringing together leading corporations, emerging innovators, governments & cities, SMEs, and academic institutions, working both internationally (CE100) and regionally (CE100 Brasil and CE100 USA). Goal: Build capacity, share knowledge and best practices, and develop cross-company, cross-sector, pre-competitive collaboration initiatives. Project MainStream A World Economic Forum hosted, multi-industry initiative in collaboration with the Ellen MacArthur Foundation and supported by McKinsey & Co. Goal: Unlock the stalemates that individual organisations cannot resolve.

COMMUNICATIONS & PUBLISHING Developing the conceptual framework and celebrating best practice Publications A series of publications written by the Foundation’s Head of Innovation, Ken Webster that explore and develop the conceptual framework of the circular economy. These books propose that the time is right to move towards a circular economy and provide a stimulating overview of this emerging framework for economic prosperity reinvented. Circulate A new online location for editorial, news and insight on the circular economy and related subjects. Circulate is the go-to location for circular economy related news and insight. Publishing fortnightly featured articles, regular updates from a team of international correspondents, daily news pieces and recommended reading from other writers and publications.

Thank you for the opportunity to be here today and to present some of the Ellen MacArthur Foundation perspectives on the opportunities for innovation, new forms of growth and prosperity that a circular economy present, and also to perhaps demonstrate the broader potential of this concept for considerations such as future employment, the environment and our shared and finite natural resources. Today I’d like to cover 5 topics: Firstly, give a brief background to the Ellen MacArthur Foundation Our perspective on the opportunity this concept presents Recap some of our previous research and analysis Provide a preview of some of our most recent research and analysis that we will be launching formally next week Finally, provide some perspective into some of the initiatives the Foundation is driving to accelerate the transition Global Partners of the Ellen MacArthur Foundation: