English

As in Madrid at the end of last year, within the framework of COP25, the Eurochile Business Foundation gathered this week the main experts from Chile and Europe to analyse the advances that are being made in the circular economy, a global trend that today it appears as one of the main responses to the social and economic crisis caused by the Covid-19 pandemic and the climate crisis.

This time in a virtual way and through dynamic digital platforms that brought together exhibitors from all over the world, the “Circular Economy Conference” held between December 9 and 11, brought together authorities from Chile and the European Commission, experts from organizations such as the Ellen MacArthur Foundation, Circular Change, Dr2 New Economy, FiBL, SEGITTUR, the academy and representatives of companies that lead the implementation of this trend at a global and national level.

“This diverse, prestigious and important participation is a very good indication that we will approach the circular economy in all its complexity and diversity, in a complete, comprehensive and professionally serious way. This is a good example of integration, collaboration and solidarity”, highlighted the president of Eurochile, Vicente Caruz, in his opening speech on behalf of the Foundation.

With an audience of almost 300 virtual assistants from countries such as Belgium, Spain, Finland, the United Kingdom, Slovenia, Portugal and almost all of South America and Mexico, Vicente Caruz stressed that in the face of the confinement of millions of people in the world and the social and economic crisis that it entails, today the debate on new forms of social organisation, living together, new ways of inhabiting the world and dealing with its balances has accelerated.

“The circular economy – affirmed the president of Eurochile – has a fundamental place in this discussion, especially due to the urgent need to get out of the crisis with a sustainable adaptation. The circular economy implies that companies, with creativity, innovation and intensive use of technology, redesign and adapt their production and service processes to reduce the use of virgin raw materials that are increasingly scarce every day. In the world and in Chile this process has also begun, but it is necessary to accelerate it”.

A vision that was reinforced by Kestutis Sadauskas, director of the Green Growth and Circular Economy of the Directorate- General for Environment of the European Commission, with whom “we have a long and fruitful relationship, they have been leaders in introducing the subject of the circular economy in Chile”, Caruz recalled.

Sadauskas started by highlighting the importance of the discussion generated in the conference, “similar to the one we have in all of Europe, it is very good to see that we are on the same line and that we are thinking the same on the other side of the world, and that we can connect despite to the problems we are currently facing”.

The Covid pandemic, he said, exposed the fragility of our current economic model and has affected key supply chains. The transition to the circular economy is a safe bet to decrease dependence on external inputs and make better use of national resources, this in a scenario with multiple interconnected challenges, such as the climate crisis, pollution and the loss of biodiversity.

In this context, he affirmed, the need for an economic recovery and the transition to a circular economy go hand in hand. “There can be no economic recovery and stability if we don’t leave the linear economy model. In Europe, we have adopted the Green Deal as our growth strategy, which will also be the key to achieving a green recovery after the crisis. The Green Deal has made sustainable growth a political priority“, he said.

Global Alliance for Circular Economy

And one of Europe’s goals in this matter, he added, is to also support the global transition. “The European Commission is launching an initiative for a global alliance for the circular economy, to identify some gaps and work in partnership with other countries. Chile was part of one of the first outreach programs of this alliance, and we appreciate that very much because countries with a similar outlook will benefit from this”.

With regard to this, Kestutis Sadauskas highlighted the country’s support for the European effort to promote the circular approach, recalling that “Chile was the first country to receive a European mission in circular economy in April 2016. Since then our efforts in this matter have increased (…) We believe that together we can advance in this regard; and by investing now in the circular economy we can prepare the path to accelerate the transition to gain new markets, because we know that in this particular case those who advance first will be those who will have the advantage”.

Among the main speakers of the opening day was also the president of BancoEstado, Sebastián Sichel, who pointed out that today, as a society, we are experiencing four joint changes that are changing society: the aging of the population, a society that aspires to participate more in decision-making, a technological change that includes greater access to information and technologies, and a climate change that -among other impacts- is affecting the way of producing.

“The circular economy,” Sichel said, “makes it possible for the fourth industrial revolution, which involves these four changes, to become more viable for a developing economy like Chile’s. First, because Chile is an exporter of natural resources, and therefore the availability of these in the future will be a determining factor in the country’s economic success or failure. Second, because most of the productive activity occurs in the regions, and therefore an important part of it will be determined by the sustainability of the business at the local level. And third, because almost 70% of employment in our country is created by micro and small companies and the way they produce will be a determining factor in their future success”.

For this reason, he stated, the circular economy is not only an ecological concept, but is related to the strategies adopted by the country to face this wave of changes. And in this, the role of financial institutions, even more so if it is public like BancoEstado, is to set aside neutrality and choose to provide financial support to those companies in which the sustainability of the business is not seen only by cash flows, but also because of how it contributes to this logic of facing these new challenges in a better way. “That non-neutrality is the concept behind the struggle for circularity,” he said.

“Our challenge as a public bank is to put the incentives to steer the curve towards circularity, and because we effectively believe that it is competitive, that it is an economic reflection and not just a political one. Those companies whose environmental traceability in the medium term is more successful will be more competitive,” said Sichel.

Meetings and workshops

The first two days of the “Circular Economy Conference” organised by Eurochile were focused on analysing the circular economy as a tool to mitigate climate change and its contribution to the economy, society and the environment, as well as discussing its potential in the different productive sectors of the country and in evaluating the tools, technologies and programs that make their adoption by companies viable.

Three workshops were also held to analyse practical aspects of the circular economy: introduction to eco-design, the importance which is fundamental for the implementation of this trend since 80% of the environmental impacts of a product are defined in the design stage; generation of networks for the circular economy, having as focus that the circular economy is collaborative or not; and new business models and circular strategies in tourism, a path that may be key for one of the sectors hardest hit by the Covid-19 crisis.

Today, there will be a Brokerage Event with more than 170 registered from countries such as Uruguay, United Kingdom, Portugal, Spain, Chile, Peru, Mexico, Italy, Argentina, Finland, France and Germany, among others.

One of the main missions of Eurochile Business Foundation is the permanent search to increase cooperation with Europe, which implies constantly observing the new issues that are developed in that continent and that, either will arrive in Chile in the near future, or it is necessary that the country pay attention to them for eventual improvements in their development and future competitiveness.

It was within this framework, says the executive director of Eurochile, José Aravena, which the incorporation of the circular economy in the Foundation’s work emerged. “Since the beginning of this decade we have been talking about this issue, mainly due to our relationship with the Directorate General of Enterprise and Industry of the European Commission, which at that time was headed by Daniel Calleja. They were already entering the circular economy, it was already developing strongly, and we knew that it was an issue that we were necessarily going to have to bring it up in Chile, ”he recalls.

And although there was work started in this matter, when it was more fully addressed was in 2016, the year in which the first circular economy mission with European companies was carried out to Chile. From there, more formal actions were initiated, first through business cooperation between national companies and representatives of the Old Continent.

“Later we realized,” says José Aravena, “that this was a much deeper movement, where there were many more actors, and therefore we had to start spreading it in Chile in order not only to interest companies, but also institutions, others actors. Then came the whole issue of the COP, which also involved a particular work on this, but I would say that from 2016 we integrated it clearly within our lines of action, and as of 2019 it becomes a specific work area of the foundation”.

A milestone inEurochile`s work was having been selected to prepare the Circular Economy Roadmap in Chile. How has this process developed, how has it progressed since March, what have been the main milestones?

It has been a very positive collaborative and participatory work – about 150 actors have participated in the entire process, with many meetings – where we all contribute in the preparation of the workshops, analysis of the results and preparation of the Road Map document … It has been a journey, sometimes not so linear because many times it was necessary to give more thought to certain issues, but establishing the vision has been an important milestone. One can then discuss how it is going to be implemented, but the first thing was to co-build that vision, to agree on what circular economy means, or a circular Chile, because not everyone sees it in the same way. That has been a very important milestone. Obviously the development of the work tables, and all the inputs that they delivered, are a milestone in the project. As it is now, having sent the first draft of the Roadmap to the Strategic Committee.

An important part of Eurochile’s work in this process has been to advance in consensus, in building a common vision. Has it been complex, how did the work develop?

There are several stages, but we have opted for an initial methodology to develop the vision and raise the different initiatives or actions that should enter the roadmap, and then prioritize and work on them. This methodology has been adapted to the needs of the project and the theme, always thinking that it is at the line of the project, not the other way around. In this process, many inputs and many ideas were generated that we later had to download, understand, make sense of and organise. And in terms of consensus, the methodology advances from the first stages of divergence, where everything is accepted and nothing is prioritized, all ideas are welcome, and then progress is made by filtering, consolidating ideas, until a final proposal is reached. Each of these stages serves to reach a final result where all the actors have been able to submit their ideas, and then participate in adjusting the result.

An advantage of this co-construction is that the roadmap is grounded to a national reality; it is not simply applying models from other countries. In this process, what is the vision that was agreed on regarding the circular economy in Chile?

An important point that was highlighted is that the circular economy, first, is not an end in itself but a means to achieve a greater goal, which would be the sustainable development of the country, to be able to comply with the SDGs, with the Paris Agreement. In this sense, it must be remembered that what this roadmap should seek, in addition to supporting economic development and the regeneration of environmental capital, is to also focus on people and their well-being, on improving the quality of life of all who live in Chile.

11 thematic tables were set up with 150 actors, what are the main conclusions of this work in terms of collaboration, consensus, reaching agreements… What is the main thing that is extracted of this work, which took up much of the time?

I don’t know if one can call it results, because in reality what came out of there were inputs for the strategic committee, which we work on. Similar initiatives, ideas and actions came out from the 11 thematic tables, so in general – although we saw 11 groups moving independently – in the end we saw that all of them move more or less in the same direction. That’s interesting, because the actors have a pretty similar idea of ​​how to get to a circular Chile.

In these inputs there are regulatory issues, the importance of creating culture in citizenship, incorporating innovation, etc. How is this materialised in the document that is going to be proposed, in terms of goals and actions?

We can say that in the roadmap there are three main sections or results: the vision, the goals, and the strategy (made up of the initiatives). Obviously, these three sections have to talk with each other, so everything that is reflected in the vision has to be reflected in the goals that we set ourselves, and also in the initiatives. Within the vision, the regulatory aspect is not necessarily addressed, but it is known that in order to achieve the goals there is a whole list of regulations that must be established in order to achieve it. So, the three parts are articulated with each other to put together a complete strategy.

What is the vision of Eurochile, which has led this work of dialogue and co-construction, regarding how this document should be implemented in the future?

Its implementation will depend on the will of the different actors involved, both public and private. And one of our roles is to try to show the benefits that this development model has for the well-being of the country as a whole. Therefore, it is important that all actors take these commitments as their own and carry them forward. That in practice will depend on the political-institutional environment in which this work takes place, and how both national governments and local governments take on this issue. Sometimes it is possible that the communes or regions take up these issues, and we see it in other parts of the world. In the United States it is very clear, for example, where California is much ahead of the rest of the country. But the fundamental thing is the conviction of society as a whole, without that it is difficult to advance. There may be specific cases, companies or communes that stand out, but at the country level it will not be enough. But I am optimistic about it, I do not see in Chile that there are sectors that oppose this change for their own interests, and we are a very open economy, so we need to adapt to what is happening in the rest of the world, and that is going to be seen in the commercial relationship with the European Union in the future, for example.

How could this impact the development of the country?

Clearly it is not going to be fast, it requires a great effort to convince, disseminate and demonstrate the benefits of this new development model. It is a long process, but I believe that Chile has favorable elements to advance in these matters. Regarding its impact on development, it is complex, because the first thing is how we measure this. How we measure well-being and that is something that in the world is not resolved. If it continues to be measured in terms of GDP growth, I do not think it captures all the benefits of a circular development model. So, efforts must be made to try to measure it better and show its benefits in a more practical way. One can talk a lot about this, but if it is not shown in numbers it is difficult to convince.

In the implementation of the roadmap, companies and citizens will play an important role. How is it possible to maintain the drive that was generated in the work of the roadmap with these actors, post implementation? What role will Eurochile play in this?

We have a limited role, from the business point of view what interests us particularly are SMEs, which is a sector that will have more cost adjustments towards a circular transition because in a first stage it has higher costs than the benefits, which will be given over time. So financing this transition to circularity is a big effort. We are going to work hard trying to help SMEs, and to gather resources so that they can adapt; resources that governments and banks should make available to this process. So, first of all we see a very important role of Eurochile in the adaptation of SMEs, because multinationals bring this from their headquarters. The second thing is that we want to continue spreading the advances of the circular economy, particularly in Europe, because this is a process where know-how, experience, even scientific research on the matter is accumulating, and that has to help the process in Chile to be done more quickly. We have been doing that and we will continue to do so in the coming years.

Today the scenario is favorable for the circular economy, because it has positioned itself as a powerful and viable tool for a different post-Covid-19 economic development. How do you position this opportunity?

Yes, it is difficult to find contrary opinions, in Chile at least. But what is missing now is to put the action where the words are put, and that is more difficult. For example, everyone talks about the importance of recycling, but how many people recycle – and do it well – in Chile, a very low percentage. In companies, everyone talks about the need to be more efficient in the use of raw materials, and to return them to the process, but how many have managed to do that. So, the great challenge is to take advantage of this good will to the circular economy, but that has to be truly transformed into actions. And that is not going to be achieved from one day to the next, and conviction has to come on the one hand, but also regulation, because the speach also has to be accompanied by incentives and punishments. In addition to convincing, it is necessary to have tools so that people do what they have to do, in this case companies and consumers.

The European Green Deal could play a relevant role in this, because it is also going include demands on imports to that continent that allow compliance with the deal’s commitments. How could that help speed up this whole process?

Undoubtedly, the entire export industry to Europe, where we have fruits, wines, and other raw materials, will face restrictions associated with circularity sooner rather than later, because Europeans have not only already said it, but have written it in the Green Deal document. The restrictions that are going to be placed on European companies in this matter will also be applied to companies that export to the European market. So, Chilean companies should be looking from now on where these regulations go to adapt with time. There is also a role for us there, Eurochile has privileged information about what is happening in that continent, and undoubtedly in the dissemination activities of the advantages of the circular economy we will also emphasize the threats that this could mean for exports Chilean, and the need to adapt in these matters. And if the rest of the world begins to raise their standards as well and incorporate these elements – which one would hope they would – this will end up having positive consequences.

Eurochile has a historic role as a bridge with Europe. How will SMEs be helped in this process, in technology and knowledge transfer?

One of the issues on which we are going to deepen our work is in the agri-food sector, because we believe that it will have to make significant adjustments. The small producers can be negatively affected if they do not begin to take these issues into account in their own interest. If large exporters have circularity requirements, carbon footprints, they are going to demand it from small producers, and there the issue is how they adapt to these new circumstances. In our 2021-2023 plan we have made the agricultural sector one of our priorities precisely thinking about this, that they know what the trends are in Europe and see how we can adapt them to these matters through workshops, projects, support, in the change of their production processes. And there are other sectors that also interest us because they have circularity challenges, such as non-conventional renewable energies, and with them we are looking at options to face the challenges, how large companies support the SMEs that provide the services.

In December Eurochile is going to carry out a virtual event on circular economy, with national and European experts. The idea is to transfer all these concepts, trends, regulations, technology, etc.?

The event is planned in four panels, each one with its own specificity. The first is oriented to the major issues in Europe -the Green Deal-, in Chile -the road map- and other issues, with a more dissemination perspective than it exists. The second panel is sectoral, where we want to bring the circular economy issues to specific economic sectors, such as agriculture, tourism, construction, and renewable energies. A third panel that aims to be more practical: what we do, what instruments exist, what things help enable us to make this work. There are financial instruments, programs and technologies available. And the last is to look to the future, what can we expect and what is the role that each of the different actors will play.

Why is it important for SMEs to participate in this seminar, to get involved in this?

The circularity of the economy is difficult to implement without SMEs. The large companies do not do things alone, they are associated with multiple SMEs, and they need them to be circular. Larger companies already involved in this are also concerned with how they help their suppliers to be more circular, and some include it into their tenders. This is a trend that is going to come anyway, therefore SMEs are a bit forced to do this, it is going to reach them even if they think they are not responsible for these changes, but thousands of SMEs are responsible for this change.

How will Eurochile work on this issue in the coming years, thinking about the tools, challenges and opportunities that arise from the adoption of the circular economy in the country?

We are going to work spreading knowledge to companies and SMEs, above all, but also to public institutions, because although the Ministry of the Environment is promoting this, a lot of knowledge is still lacking, especially when one goes to the regional, municipal level , and even within ministries and public institutions, where, for example, purchasing decisions are made by the State, which represents a very important part of GDP, and sometimes they do not handle the issue. We must position this issue, educate, train, both the public and private sectors, and specifically SMEs and all the key roles within the public institution that can have an impact on the market. In this, Eurochile can make a contribution in different sectors, and then help them find solutions, resources. Today there are sectors that do not appear in the circular economy, such as tourism, and we believe that the future of Chilean tourism lies there. Then, it is important to show success stories, things that have already been done, of course in Europe but also what we have already worked on in the country with Chilean SMEs, showing that it is possible to create a circular economy. And bring closer tools, both technological and analysis and decision-making, to companies and public institutions. Also in building roadmaps at the sectoral level, we want to offer this as a service that helps this development, and at the regional level as well. The new reality of regionalisation should imply – we hope – a greater empowerment of the regions on different issues, and this should be one that the regions should take on. And they should start with regional roadmaps, where we, who already have the experience of doing it at the national level, can help them in that process. The work that can be done is enormous.