According to the United Nations, if the global population continues to grow as predicted, it may take almost three planets by 2050 to provide the natural resources needed to sustain current lifestyles.
Since the Industrial Revolution, the growth of the global economy has been accompanied by large-scale extraction, manufacturing, use, and disposal, but in the context of climate change, ecological crisis, and carbon neutrality, people are increasingly aware of the limitations of this model. Only when the impact of our economic behavior on the environment is minimized and we move from a linear economy to a circular economy can we have new opportunities.
In the fourth issue of the micro-documentary "The Thinkers Are Coming", Rui Meng, professor of finance and accounting at China Europe International Business School, and Wang Yongliang, CEO of the New Life (Aihuishou) Group, walked into the circular economy around them and talked about how we can have a healthier, A sustainable future.
Be a friend of the earth
Rui Meng: In 1966, the concept of circular economy originated from "Spaceship Economics of the Coming Earth". The earth is a lonely spaceship, and there is no infinite storage compartment for matter. Human beings must reproduce matter through circulation. But in the course of history, this academic concept has become a blur. It was not until 1990 that the term "circular economy" was officially clarified, with the purpose of establishing resource management rules for sustainable development and a fundamental change in the traditional growth model of "mass production, mass consumption, and mass waste". The circular economy has two main cores: one is to extend the entire life cycle of the product as much as possible, and the other is to reduce the loss of resources during the production process of the product.
Circular economy also has its own answer in everyone's mind. In the practice of loving recycling, could you please share your answer? How does the circular economy become a sustainable business model? What are the difficulties and pain points in implementation?
Wang Yongliang: Taking mobile phone recycling as an example, in 2011, the rise of Apple mobile phones led to the rapid development of smart phones, and a large number of consumers had the need to replace their phones. Every year, our country has a demand for 300 million to 400 million new mobile phones, which means that 300 million to 400 million old mobile phones are produced. The pain points of second-hand recycling lie in three aspects: first, the user's mind, whether they have the awareness to recycle old mobile phones; second, how to build consumer trust; third, establishing standardized and standardized services to solve issues such as data privacy and security. We have solved user experience problems and business model problems in the past ten years.
Rui Meng: But Chinese consumers still prefer to use first-hand products. Do they have any psychological barriers to second-hand products?
Wang Yongliang: This also requires a process of habit formation. Through our continuous education, everyone will find that second-hand items are actually very useful and can reflect a lifestyle.
Rui Meng: I think in the dual-carbon era, for young consumers, what is cool and what is fashionable? It means being able to be a friend of the earth. Everything they do is to contribute to sustainable development.
Wang Yongliang: In fact, don’t think of the circular economy as mysterious. China has this traditional culture, and the Chinese people have a diligent and thrifty consumption consciousness in their bones. As our older generation said, the new year will last three years and the old will last three years. Three more years of supplementation. But this requires our company to truly bring convenience to users. It is based on such user needs that we have put smart recycling machines in residential areas. Many children have gradually developed a habit. Instead of throwing away the garbage at home, they should save it and put it in the smart recycling machine, and they can also earn some money. Pocket money.
Rui Meng: According to your observations, what kind of people are the users who are keen on circular economy, and what changes have occurred among them?
Wang Yongliang: The differences among consumers are mainly related to category differences. In the past, we mainly produced mobile phones and electronic products, and our users were mainly young people, especially young men. In 2022, we began to expand to include luxury goods, bags, watches and other categories, and the number of female users gradually increased. As for the home projects like the smart recycling machines I just mentioned, the age groups involved are even more diverse. From the elderly to young people and even children are participating in this matter, which is what we particularly hope to see.
Circular economy forces enterprises to innovate
Wang Yongliang: Professor Rui, in your opinion, how can an enterprise take into account social and environmental values while achieving commercial value?
Rui Meng: This is the "triple bottom line" principle in our economics. Originally, an enterprise had only one goal, which was to create more profits. However, in the process of creating profits, it produced huge externalities, which would affect the sustainability of a country's economy.
Therefore, the company has changed from the original single goal to a triple goal. In addition to commercial value, it also has social value and environmental value. Being able to unify these three values is a new concept for corporate development that we will particularly advocate in the future. The purpose of an enterprise's existence is to make the world a better place and make people's lives happier.
Wang Yongliang: The second-hand recycling we do is part of the circular economy, but as an important national strategy, the circular economy also covers many fields. I would like to ask Professor Rui, what areas of application does circular economy include?
Rui Meng: In fact, the circular economy is explained in great detail in the country’s “14th Five-Year Plan” development plan. There are several main principles: the first is to reuse (reduce); the second is to recycle (recycle); and the third is that we must have economies of scale and form an industry.
The "14th Five-Year Plan" development plan makes detailed plans for the major industrial directions from six aspects. For example, new energy vehicles are developing very rapidly in China, but their lifespan is shorter than that of fuel vehicles. How can we consider how to recycle and reuse their lithium batteries and parts 10 years from the beginning of the design? In addition, my country's express delivery industry is developing very fast, and there is a lot of excessive packaging. How to reduce packaging and promote the degradability and recyclability of packaging materials? In addition, it also includes the recycling of electronic products that Aihuishou is doing, as well as household appliances such as air conditioners and refrigerators. How to achieve recycling?
Wang Yongliang: What do you think of the new business models and new business opportunities brought about by the circular economy?
Rui Meng: The circular economy covers a wide range of links. What we have just focused on is the manufacturing and remanufacturing links. In addition, there are also circulation and consumption links.
I will take the circulation and consumption links as an example, which requires a change in concept. The first concept is to share. For example, the shared bicycles we use every day for travel belong to the circular economy model. The second concept is how to turn products into services. For example, do all ski enthusiasts need to buy ski equipment? These needs can be fully realized through rental services. The third concept is to consider from the design end how to return to the industrial chain through circular economy when the product life ends.
In fact, circular economy can force many companies to innovate and make their business models sustainable.
Wang Yongliang: Yes, in fact, we have also done a lot of exploration ourselves. The clothes I am wearing today are very special. We have spun the recycled coffee grounds into silk and made clothes to convey the concept of circular economy to consumers. .
Conclusion:
A healthy, sustainable future
Rui Meng: China wants to achieve carbon peak in 2030 and achieve carbon neutrality in 2060. One of the most important ways to reduce the amount of carbon dioxide produced is circular economy.
I think that economic success and the progress of human civilization cannot be a one-sided pursuit of the size of GDP. We need to pay attention to environmental protection and sustainable development. The essence of sustainable development is people. We need to slow down and rethink what kind of lifestyle is healthy. We must balance the relationship between man and nature, the relationship between efficiency and fairness, the relationship between growth and sustainability, and more importantly, we must balance the relationship between the current generation and the next generation. (over)
Editor in charge: [Liu Pai]