Sustainability as a business opportunity for restarting

1 June 2020

The protagonists of the QuaranTalks spoke of recovery relying on three key points: innovation, digital and sustainability. In what terms can the circular economy be the way to start again following the health emergency?

We asked Matteo Mura, Scientific Director of the Executive Master in Sustainability and Business Innovation and Associate Professor in Economic Management Engineering at the University of Bologna.

“As a researcher, it is very difficult to talk about a phenomenon when it is still going on. At a national and global level, we are witnessing a crisis in health systems that is prevailing over everything else – as it rightly must be. In terms of implications economic, the first scenario that, in some (fortunately few) contexts has been proposed, is that to avoid the health crisis triggering a negative spiral transforming itself into an economic collapse, the countries ease the environmental constraints adopted.

In confirmation of this, consider that one of the first policies implemented by Trump in the United States at the beginning of the pandemic was to soften the rules on industrial CO2 emissions, including the automotive sector emissions imposed by the administration Obama, lowering the annual reduction threshold from 5% to only 1.5%.

Thus, some believe that to restart production activities as soon as possible, the best way is to loosen – or directly remove – the environmental constraints that govern business activities. This is a dramatic scenario because, as noted by a recent article by Marianna Mazzucato [economist since April 10 in Vittorio Colao’s task force], we are experiencing a series of chain-linked crises: the very short-term health crisis that will trigger an economic crisis already in the medium term, linked in turn to a long-term environmental crisis. These three crises are not disconnected, on the contrary, they are strongly integrated. Recent studies seem to show that the spread of covid depends, on the one hand, on the loss of biodiversity of natural ecosystems that no longer act as a filter for pathogens, and on the other, on the air quality of some areas, as evidenced by the high rate pollution of the Po Valley, not surprisingly among the most affected by the pandemic.

These three crises must be managed in a highly synergistic way: if we only manage the health emergency, the other two crises will only get worse. Likewise, if we are concerned only with the health and economic crisis, the environmental impact will be catastrophic. It is necessary to have a systemic vision of these three crises, which at different times are breaking down on our economic and social systems. Therefore, we must not take a step back, but rather two steps forward on those issues related to sustainability, which are the antecedent that could have triggered this pandemic, and at the same time also the arrival point of these three concentric crises.

It must also be considered that, in this scenario of a globalized economy, the value chains are extremely long, so it is produced in China to sell in the United States, for example. This is a problem because, in a phase in which states close production at different times, these long and complex chains inevitably lead to not supplying adequately. A circular economy logic, on the other hand, could have very strong benefits, because first of all it shortens the supply chains: the waste of a production process, which technically is called raw material second, becomes the input of another production process, offers the possibility of creating ecosystems that work in symbiosis, thanks to short supply chains. This does not mean that they are necessarily located in the same area, but with a spatial proximity location: in addition to this there is a theme of risk reduction during the supply phase and price leveling.

In this context, the circular economy stands as a business opportunity to be implemented in all sectors. “A recent survey we conducted on a sample of 260 SME entrepreneurs – concludes Mura – has shown that the first barrier with which the adoption of sustainable practices comes up is the perceived cost. Yet, the companies that have already started these logics found an advantageous cost rationalization thanks to greater efficiency of the production processes, alongside a strategic differential positioning that the market requires more and more “.

Author: Matteo Mura


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