By Alexander Gelfand / Illustrations by Borja Bonaque

If aliens were to visit Earth two thousand years from now only to discover that humans had already vanished, what might they find in our place?

“A lot of toxic and nuclear waste,” says Anya Shapiro ’16, “because it will still be here.” As a graduate student in the University of Michigan’s dual MBA/MS program in business and sustainability, Shapiro spent nearly three years figuring out how to transform that problem into an opportunity. Her goal: to see if spent nuclear fuel, one of the most long-lived and dangerous forms of wastes, could be used to create something beneficial—a source of clean energy.

The spent fuel rods from nuclear reactors are held in enormous steel and concrete containers called dry casks. The half-lives of those radioactive materials are measured in thousands of years, and there are thousands of such silo-sized casks spread across the United States, all requiring careful and costly long-term storage. The situation holds considerable personal resonance for Shapiro, whose grandfather was from Chernobyl and who grew up acutely aware of humanity’s impact on the environment.

But in addition to radioactive emissions, spent nuclear fuel also generates harmless, non-radioactive heat. Shapiro and a group of fellow graduate students wondered: Could that energy be put to good use?

The team answered that question by developing a sustainable business model with an unusual twist: using the heat from dry casks to turn sewage sludge into fertilizer or fuel. The sludge is a mud-like byproduct of wastewater treatment that is typically sloughed into landfills, where it generates methane and other greenhouse gases. But there is value buried in that muck.

Some waste processors already use heat from natural gas to transform sewage sludge into useful biomass. But that process involves extracting and burning a fossil fuel. The system devised by Shapiro and her colleagues uses one kind of waste (i.e., heat) to transform another (i.e., sludge) into valuable products without generating any emissions. The process effectively turns two environmental negatives into a positive. The group founded a startup called Sustainium to commercialize their idea, won various business competitions, and attracted potential investors and corporate partners.

As often happens with business school startups, Shapiro and her cofounders ultimately decided to dissolve the company and pursue other career opportunities after graduation. But for a time, Sustainium represented an elegant example of a circular economy: a self-contained, sustainable system of production whose origins can be traced back thousands of years but that has only recently begun to attract widespread attention in the business world.

Circularity emphasizes three interrelated elements: eliminating waste; keeping materials and resources in circulation; and regenerating nature. Many veteran sustainability advocates, among them more than a few Macalester alumni, are helping to establish circular systems in industries ranging from food to fashion. Their efforts are vital to altering the negative environmental trajectory of a warming and resource-scarce world.

Circularity, past and present

""Circular economies have been around for millennia. Scientists recently discovered evidence that three thousand years ago, inhabitants of the Persian Gulf region turned broken ceramic vessels into tools. And Roopali Phadke, a Macalester professor of environmental studies who researches sustainable development initiatives, notes that circularity remains a way of life in places where resources have historically been scarce.

“Minimizing waste is something you see in day-to-day practices all around the world,” says Phadke, who points to neighborhoods in India where scrap workers collect all kinds of discarded items and resell them to businesses. “There are many communities that still recycle every scrap of everything to make something new.”

But circularity only recently entered the contemporary lexicon of sustainability as companies began creating closed-loop manufacturing systems for making physical products. In 2017, for example, Apple announced its intention to build all its devices using only renewable resources and recycled materials, many of them harvested from its own product lines.

On its face, the business case for circularity is simple: Although adopting circular practices requires initial investment, eliminating waste and turning outputs into inputs ultimately allows companies to cut costs, boost efficiency, and create new sources of revenue.

Yet until recently, says Chris Cloutier ’89, people who talked about circular systems were on the margins: “They were the voices in the wilderness.”

After leaving Macalester, Cloutier spent more than ten years leading the state of Minnesota’s recycling, pollution prevention, and waste reduction efforts, and he has spent the last twenty helping businesses become more efficient while reducing their environmental impact.

Since 2019, Cloutier has led Target’s high-value salvage programs, which recapture items such as used or returned electronics and kitchen appliances and send them to vendors to be refurbished or remanufactured. The products are then resold either in-house or through external channels.

Early in Cloutier’s career, such “reverse logistics” systems—which play an essential role in circular economies by shepherding used or defective goods back to sellers and manufacturers for refurbishment and remanufacturing—were largely unknown. Today, the global market for reverse logistics is estimated to be worth more than $600 billion, and the potential it holds to combine profit with impact is enormous. Every item captured by these kinds of salvage programs, for example, represents a source of revenue for companies. It also represents an expense the company no longer has to incur by buying fresh inputs or trucking waste to a landfill. And beyond the bottom line, the programs mean the company doesn’t have to extract as many virgin materials from the Earth or dump as many processed ones back into it.

Yet circularity has been slow to gain traction in business circles, in part because circular practices represent a significant departure from the linear production model that continues to dominate modern manufacturing. Linear production represents a take-make-waste approach: Extract finite resources from the Earth, turn them into disposable products, and throw them away once they come to the end of their useful lives. And despite its manifest flaws, it remains deeply entrenched.

“The linear path we’re on isn’t working: We’ve got giant plastic patches in the ocean; we’ve got landfills that are leaking and on fire,” Cloutier says. Making matters worse, “we have trillions of dollars of investment across the globe designed to create feedstock for single-use products.” Those dollars support entire industries devoted to turning petroleum into plastic, mining metals for use in TVs and tablets, and harvesting wood to make paper and particleboard.

As a result, moving from a linear model to a circular one at the scale required to significantly reduce the global environmental impact of manufacturing won’t be easy.

“It actually requires changing the entire system, including the labor that is required to produce things,” says Shapiro, who developed new circularity initiatives for companies such as Etsy and Under Armour and hopes to bring the kind of innovative circular thinking that fueled Sustainium to a larger stage.

Corporations and even entire industries will need to find ways of collecting, processing, and reusing existing materials instead of mining, harvesting, or synthesizing virgin ones. They will need to design products that are meant to be recycled or repurposed and figure out how to market and sell items that no longer meet the traditional definitions of “new” or “unused.” And they will have to embrace a brave new world where everything goes on to serve as fuel or feedstock for something else, much as the stillsuits worn by the Fremen of Dune turn bodily fluids into drinking water in an endless cycle of use and reuse.

Yet as the existential threat posed by climate change becomes increasingly clear to investors, shareholders, and consumers alike—and as more and more companies adopt decarbonization targets and environmental, social, and governance (ESG) guidelines designed to boost sustainability—businesses that once considered circularity too difficult or expensive have begun to see it as a useful tool for achieving their broader sustainability goals and strengthening their brands.

“The market has moved, and it’s moved fast. Companies are all looking for ways to reduce their environmental impacts,” says Kevin Wilhelm ’95, founder and CEO of Sustainable Business Consulting, a firm that provides sustainable business guidance to 240 clients across thirty-seven different industries.

A decade ago, few clients were interested in hearing Wilhelm talk about how they could go circular. “Now they are more ready for it and want to see if they can implement it,” he says.

Recently, for example, Wilhelm helped a client turn escaped heat into a source of revenue for their business and a money-saver for someone else’s, neatly illustrating the waste-not, want-not aspect of circular economies.

The client, a brewer, was burning natural gas to brew its beer and venting the surplus heat into the atmosphere. Next door, meanwhile, a struggling Bikram yoga studio was trying to figure out how to lower its heating bill. The brewer devised a way to pump the excess heat to the studio next door, at half the rate of what the utility charged. What had been a form of waste became a revenue stream for one business and a cheap and reliable source of energy for another, all while lowering emissions.

In the course of his career, Miguel Nieto ’04, a senior management consultant at South Pole, a business consultancy that promotes decarbonization and climate action, has helped a wide range of businesses save and make money by applying circular practices.

Prior to joining South Pole, Nieto, who is based in Mexico City, cofounded a social enterprise, Sustenta Estrategia Ambiental (Sustained Environmental Strategy), which helps companies make more efficient use of resources such as water, electricity, and heat.

The firm’s flagship project involves a system for transforming the organic waste produced by restaurants in Mexico City into biogas, a form of renewable energy that those same restaurants can then use to generate their own heat and electricity onsite.

Sustenta Estrategia Ambiental is also developing a regenerative water-treatment system for a hotel under construction on Yelapa Bay, in the Mexican state of Jalisco. Rather than rely on the local waterworks for potable water, the hotel will collect, treat, and recycle its own water, contributing any surplus it generates to the surrounding community. Such “water-positive” systems are considered essential to protecting depleted watersheds.

“When you engage in these regenerative schemes, you have more than you actually need,” Nieto says. “The principle is to switch from the existing paradigm of depending on local infrastructure to one of not just independence, but abundance.”


Circularity challenges

Despite their many advantages, circular economies do have limits.

As Professor Phadke observes, circular manufacturing systems can still be energy- and water-intensive, which undermines the goals of regeneration and resource efficiency.

“If you recycle your end products but you leave a trail of hazardous practices behind you, are you really an honorable, responsible business?” she asks. “If you have a manufacturing process that degrades water quality, is it still circular?”

And as Kim van der Weerd ’09 has learned, circular economies simply cannot solve certain problems—at least not yet, and not alone. Some of these arise from economic inequities that circularity was never intended to address—inequities that land most heavily on the workers who make the things we buy, and that cannot be erased by finding new uses for organic waste and escaped heat.

For five years, van der Weerd worked as a garment factory manager in Cambodia. “If you had told ‘Macalester me’ that I was going to end up managing a garment factory in Cambodia, I would’ve told you that there was no chance,” she said via Zoom from the Netherlands, where she has lived since 2020.

But van der Weerd had a long-standing interest in human rights issues and the global supply chains that underpin the fashion industry. So after earning a master’s degree in human rights from the London School of Economics and working at a London-based nongovernmental organization, she decided to get some firsthand experience in apparel production to better understand the business and its social and environmental impacts. She has since put those insights to work as a consultant and sustainable fashion critic: A frequent blogger, she also hosts Manufactured, a podcast about sustainability and the making of fashion.

One of the production facilities van der Weerd ran in Cambodia was owned by the San Francisco-based brand Tonlé, which practices zero-waste production. Every bit of clothing Tonlé makes and sells, from dresses to jumpsuits, is made from reclaimed textile waste collected in the remnant markets of Phnom Penh. Leftover scraps are turned into yarn that is handwoven and knit into new pieces, and whatever waste remains is mixed with used paper to create handmade paper products. “Nothing goes to landfill,” van der Weerd says.

Tonlé’s methods adhere admirably to the first two principles of circular economics: eliminating waste and extending the lives of products and materials. The company, for example, tries to decouple production from the extraction of virgin materials such as cotton. Scaling such a system up, however, would not be easy—partly for technical reasons and partly because of how clothing production is currently organized.

For one thing, the apparel industry currently lacks the capacity to recycle all the materials that are used to manufacture textiles and clothing—and repurposed fibers don’t always match the quality of virgin ones.

The second garment factory van der Weerd managed produced primarily for luxury eyewear brands, which rarely put down deposits when they make forecasts for the next season. Instead, the factories must front all the manufacturing costs with few guarantees about how many pieces the brands will buy—and absorb all the losses when orders are smaller than expected. Consequently, factory owners have little incentive or spare capital to invest in the technology that might make circularity possible. But they have every incentive to trim costs by paying workers low wages and keeping them on short-term contracts: When a factory has no idea how many orders it will get and must disproportionately front the costs of production, cheaply flexible labor is a way of coping.

And circular economics, which focuses primarily on minimizing waste and maximizing resource efficiency, has very little to say about any of this.

“It’s really blind to the social and governance structures that sustainability embraces,” says Cloutier, who explains that while a circular system would ideally treat workers well, that isn’t really part of the technical definition.

Instead, such matters must be addressed through other means. Van der Weerd, for example, argues that requiring brands to assume their fair share of financial risk on clothing orders would do more to protect garment workers than a circular supply chain ever could. Attempts to make such changes are underway: The STAR Network, a regional association of Asian garment manufacturers that promotes sustainable production, is the first supplier-led call for reformed purchasing practices in the garment and textile industries. Yet by and large, worker rights and circular production remain somewhat separate pursuits.


Looking ahead

Every company, industry, and sector that seeks to embrace circularity will have to confront its own version of these challenges.

It is a truism in entrepreneurial circles, however, that a challenge is merely an opportunity in disguise. And those in the Macalester community who deal in circular solutions remain optimistic about the good that circularity can do and the momentum that it is gathering—especially among younger professionals who are beginning to assume positions of power and influence in business and finance.

“There’s a brand-new cohort that is taking leadership positions within big firms as well as smaller firms,” says Nieto—a cohort that believes in using every available tool, including circular practices, to minimize and perhaps even reverse humanity’s negative environmental impacts.

Given the urgent need to find new and innovative paths toward sustainability and resource efficiency, they are taking the reins not a moment too soon.

“The private sector needs to really roll up their sleeves and get to work,” Nieto says. “If we don’t figure this out, we’re going to be in deep, deep trouble.”

Alexander Gelfand is a journalist in New York City who often covers science, business, and sustainability.

January 25 2022

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