Interview with Freek van Eijk, Managing Director Acceleratio (Netherlands) in Dutcham Magazine July/Augustus 2016 no.11
A new global reality toward a more sustainable economy shaping up isn’t that wishful thinking?
I think the world recently made some big statements. Last year the UN endorsed the Sustainable Development Goals. Later that year, in December 2015 during the UN Climate Conference in Paris not only 190 countries (including Brazil) but also 400 companies, 120 investment companies and 150 cities made significant pledges for example to only use renewable energy or to be carbon positive. This is not just a future scenario; this is becoming the new reality. Paul Polman, the CEO of Unilever, even called it the biggest business opportunity of the century.
Why is it time for Brazil to innovate itself to a new future?
First of all, not only Brazil but the whole world simply can no longer continue to grow with the present way of consumption, with a non-sustainable resource demand. Don’t get me wrong, I love Brazil, but looking at Brazil one sees a country that is sub-optimizing its potential amongst other by exporting its agricultural and mineral resources without adding value. The population and economic growth of the last decade have also led to a rapid urbanization. Brazil has roughly 15 cities with over a 1 Million inhabitants that all face some urban challenges, issues related to unemployment & safety, to food & water security, not enough access to affordable housing, electricity, water and sanitation for all. Furthermore, pollution and traffic congestion lead to health issues. Some States suffer from severe droughts or inversely from storm floods and need to build in more resilience. Brazil has a lot to win from a transition towards a circular economy.
Can you tell me what this Circular Economy is all about?
The Circular Economy has been adopted as an economic vision for the future of Europe as a whole, a vision that aims at green growth where economic growth, job creation and sustainability go hand in hand.
I could explain the Circular Economy very abstract: It is a system change that maximizes the reuse of products and materials and minimalizes value destruction. If I were to explain it in a more pragmatic way: it is another way of designing, producing and consuming. Products are designed to be made either from renewable materials or designed to be repaired or upgraded with recycling as a last resort option. In an ideal situation producers keep the ownership of their products and consumers pay for the usage. Do you need a lamp or access to light? Do you want a car or mobility? All the energy in a circular economy is renewable. Furthermore, in order for the system to be sustainable, it has to take into account the preservation of biodiversity and needs to be social inclusive. A system with an unfair distribution of interests is simply not viable in the long run. It is a game-changing strategy, breaking the paradigms prevailing since the industrial revolution.
Does it pay of?
In the Towards the Circular Economy reports (McKinsey & Company for EMF) highlighted the economic rationale for the transition to a circular economy: an opportunity in excess of 2 trillion USD for the global economy.
So it is mainly a new economic impulse?
It does not only bring new employment and business models. It is also good for the environment and gives a new inspiring and non-moralistic dimension to society with new social dimensions. It is a win-win situation
What are the main hurdles to be taken?
Look at is as a system change equal to an industrial revolution that requires a change in thinking, behavior and action from inhabitants, consumers and companies. It requires vision and leadership beyond short term political mandates. It is, both at national and international level, not a political item from the political left wing or right wing, it is necessity for future generations.
What caused the Netherlands to become a source of inspiration for Brazil?
Living in a densely populated delta below sea level, the Dutch were forced over centuries to develop extensive knowledge and experience in finding high quality, sustainable and affordable solutions to protect delta areas and enable delta life. Without protection 50% of our land surface and 70% of our GDP (15-th economy in the world) would be below sea level. Because of our early industrialization in a densely populated country and the Netherlands being a transport hub, a gateway to Europe, we had to solve many environmental issues to keep our country livable. Looking closely at my country you see a low density city where a lot of smart and sustainable city solutions have been developed. For example: Dutch agricultural entrepreneurs’ use efficient and sustainable production systems and processes, resulting in a productivity that is five times higher than the EU average. It is no coincidence that it’s capital Amsterdam was recently chosen as the European Capital of Innovation for 2016, because the Netherlands itself ranks 4-th in the World Innovation Index. “A sustainable Urban Delta” is how we see ourselves and I think both government and businesses are keen to share our pragmatic innovations to Brazilian cities and industrial areas.
Please tell us about the Netherlands as a Circular Hotspot
The Netherlands is a country with the most innovative examples in this area, a living lab where innovation is being shared for the benefit of all countries in the world. “We are a nation of little hierarchy, with highly educated people, many entrepreneurs and the highest waste collection rates in the world“, said Dutch prime minister Mark Rutte recently. “If you put this all together, I think the Netherlands can play a leading role in sustainable urbanization and circular economy“. Leading Corporate CEO’s, leaders from SME’s as well as NGO’s, Ministries, and Knowledge Institute are outspoken in their support for the Circular Economy. The strong examples of collaboration between Universities, companies and government partly explains why Circular economy falls into fertile grounds in the Netherlands.
Which ideas could be applied to Brazil today according to you?
Could this work in Brazil? For sure! First of all; there is plenty of room to increase the effectiveness of the old economy. Just look at the agricultural productivity potential or decreasing cost by being smarter with material, water and energy resources or by tackling pollution now instead of dealing with the far costly societal effects later. Consider waste a resource and with those eyes improve the waste management system combining proven technology and manual labor. As for water management: the cost of not acting will be far higher than the costs of building resilience into the system. Acting now ensures continuity for business and improves the quality of life for Brazilians.
It is even better to take advantage of the circular economy. Biobased solutions are a significant part of a circular economy and one where Brazil might take a lead. It is a way to add value to its agricultural richness and create a global green chemistry hub that exports product from renewable materials to the world. Couldn’t Brazil be the main supplier to the plant bottles of companies like Coca Cola and Danone? Wouldn’t such a hub be an ideal environment for industrial symbiosis where waste (energy, water and resources) for one company is a resource for another?
It might be interesting for Brazilian ports and Industrial Area’s to study the Rotterdam Port example where there are plug-and-play heat neworks and where CO2 is captured and transported to nearby green houses.
In any large city of Brazil the concept of “shared economy” can have benefits. Companies like AirBNB (room sharing) and Uber (alternative for taxi’s) have shown that the market potential can be huge but there are far more examples that benefit the local environment in a much stronger way. There comes a moment that access to mobility (joining a sharing car concept or public transportation) outweighs the pleasure of having your own car and spending your time in a traffic jam. Not convinced? An average car is only used 10% of its time and standing idle in a parking place 90% of its time! In Curitiba the Dutch help to increase the conditions for cycling. Good for fighting traffic congestion and improving health.
What’s next?
“Moving towards a truly circular economy will not be achieved in one step. A real entrepreneur does not wait for the government but determines its own future and starts acting. It often starts with phasing out waste (energy, water, materials) in the whole product chain. By reuse, upgrading or recycling or changing to bio-based input the level of circularity can be increased. Even better is to work on value-chain efficiency, easiness of use and reliability of the product. By going down this road new collaborative insights are being obtained that lay at the basis for new business models aimed at usage instead of ownership or fully digital services.
Could you tell me more about the Circular Economy seminar in the Holland Heineken on August 12 organized by the Consulate general of the Netherlands in Rio de Janeiro?
The Dutch offer themselves as a sparring and business partner for Brazil. In June they co-hosted a thematic conference on Circular Economy with FIRJAN and during the Olympics, on August 12 during a seminar and thematic lunch with Dutch companies in the Holland Heineken House in Rio de Janeiro, they will show that Circular Economy is top sport too. Circular Economy will be a promising and recurring theme for the Dutch in Brazil. My company Acceleratio will be helping them together with ICE Amsterdam and E4CB from Brazil.