We are coming home.

Cliona Howie del Río is the Head of Circular Economy development and transition for EIT Climate-KIC. Working as an environmental consultant for over 20 years, Cliona has held important roles such as championing sustainable business in SMEs as the Chairman for the Environment Sector Group for the European Commission’s Enterprise Europe Network, as well as sitting on a range of committees and working groups for the European Commission to influence policy and EU funding programs, including the Circular Economy Expert Finance Group. Currently, Cliona works closely with national and regional governments and a variety of stakeholders in order to develop large scale, deep demonstrations on circular economy transition.

Hi Cliona, it’s a pleasure to have you here for a conversation. By way of introduction, what major steps led you to your current role as Head of Circular Economy at Climate-KIC?

I’m a ‘lifer’: I've been in the environment sector since I was very young. I started volunteering when I was at school and my studies were all in the environmental sector. I’ve worked on it from many different perspectives, both public and private, and worked in conservation, industry, policy, entrepreneurship. Altogether, I have close to 30 years’ experience, which means I’ve tackled challenges in the environmental sector from lots of different angles and approaches.

With the circular economy, first I became involved in eco-innovation as a trigger for reducing environmental impact. How can we use a positive thing - innovation - to change a negative one - environmental impact? I was very focused on environmental impact assessment and monitoring, which—20 years ago—had a very negative connotation. The focus was on compliance, rather than progress. I became interested in how to flip that on its head. How do you build positive environmental impact, instead of merely punishing for negative environmental impact?

Where did this lead you?

To technology innovation, which used to be called eco-innovation. Then it turned into resource efficiency, which led to a discussion about smart business models and practices. There is so much potential for better use and management of resources. We are not thinking about the value across all resources, not only inside of products and materials, but also energy, water use and human effort! That led me to work with industries to help them redesign their business models around being more resource efficient, and to look for diversification and new opportunities, both upstream and downstream. Looking at the production cycle, an industry needs to ask itself: where do the raw materials come from? Do they need to come from there? Is there potential for substitution with one that costs less, has less environmental impact, and actually allows the production cycle work better?

As a strategic business advisor—from a sustainable point of view—I stopped talking about the environment and started talking about business benefits. That really triggered what we’re trying to do now at EIT Climate-KIC. The circular economy started emerging as an economic model. It isn’t necessarily about saving the planet and reducing environmental impact anymore, even though—given my deep passion for conservation—that has always been the basis of everything I have done. But the decoupling of economic growth from environmental impact started to become about being clever and resourceful.

Now the circular economy is much broader than just a business model, it’s also about building resilience and quality into our ways of living, and that means more than waste management and material management. It feels like small challenges of diversifying business models and becoming more resource efficient have now converted into this full-blown global challenge of systemic transformation. And the COVID pandemic has only reinforced the need for us to live in a way that is more sustainable, more resilient, and just more intelligent. Decoupling economic growth from environmental impacts is about creating a sustainable way of living on a healthy planet. 

“Small challenges of diversifying business models and becoming more resource efficient have now converted into this full-blown global challenge of systemic transformation”

You just mentioned a mindset shift from environmental protection - ‘let’s save the planet’ - to an economic model - ‘it makes business sense’. As we know, however, resource efficiency at the individual company level does not necessarily imply higher sustainability at the aggregate level - see rebound effects. Do you recognise this tension - that if it becomes mainly about a new economic model for individual companies, we might lose the collective benefit? What is your way out of this?

I do see this tension. But when I talk about circular economy I talk about full systems change. That isn’t just about the way we do business, it’s about the way we live. When we talk about the way we live, we’re talking directly about the importance and value of the natural world. Our health and wellbeing are directly linked to it; just see how the amount of greenery in cities contributes to wellbeing, or how amazing landscapes and natural spaces serve as carbon sinks. It’s absolutely not just about the business, and we need more education around what the circular economy is.  

But if we don’t demonstrate the business sense of what we are doing, we’ll never achieve the other. That was also my personal journey. I was a staunch conservationist and I felt very little warmth for the financial sector. Now, after more than two decades at it, I’ve learned that for systemic transformation to take hold we must work to integrate all elements of policy, including fiscal policy and the financial sector if I want to have any hope of saving the natural environment. Why do we protect natural landscapes? Is it just because of appreciation for beauty ? Or is it because it plays a part in sustainable business models? I would say it’s the latter. 

Earlier you mentioned the key role of the circular economy in decoupling economic growth from resource consumption. This is also a contested topic. Do you believe in the decoupling potential of the circular economy? 

If you asked me for a straight yes or no answer here, I would say yes. 

If I’m allowed a condition, I’d say it is the best tool we have right now for systemic transformation. When applied properly, the principles of the circular economy redefine growth, enabling positive society-wide benefits. Do I think it needs further work? Do I think we will develop it and it will evolve over time into something better? Absolutely. If you look at what we know about the circular economy, it is incredibly dynamic and we learn every day. 

For instance, right now, the community and social engagement element of the circular economy is becoming a protagonist in the story. Three years ago, we weren’t talking about the need for active, strong community engagement for uptake of circular economy models. We were very much focusing on closing material loops and waste management. It then became clear that it isn’t just about the waste sector, it’s about all resources in all sectors. And now we see that it is not sufficient to focus on policy and industry, it’s about community engagement and behavioural change of citizens. The consumers are vital to our economic model and their values must be considered. 

There is always further work to be done. If every person on this planet was working towards a circular economy, it still wouldn’t happen fast enough. We have so much to learn and grow, and we need to improve this model to really reach a point of sustainable, healthy lifestyles. At this moment, circular economy is one of the most comprehensive and coherent systemic tools that we can apply to accelerate this transformation of our society and economy.

“Circular economy is one of the most comprehensive and coherent systemic tools that we can apply to accelerate this transition of our society and economy”

Coming to the work you are doing at EIT Climate-KIC, it is a lot about knowledge and innovation to combat climate change. What is your philosophy around building systemic innovations to become resilient and regenerative in the face of climate change? 

At EIT Climate-KIC, we’ve been working on climate innovation for ten years. To be honest, it used to be done in a very fragmented, individual, project-based way. About a year and a half ago there was an important evolution point, as we understood that with individual, fragmented projects we were only going to have incremental progress and this would not meet the scale of the challenge of climate change. Climate targets and goals require a systems approach to address the complexity of the issues.  If we continued as per normal, we would find ourselves with an impressive library of individual innovation projects, yet we wouldn’t have changed our society and our economic model in a way that brings about a new vision.

Climate-KIC started thinking on a larger scale, about how to build portfolios of connected innovation projects that learn from each other with a coordinated approach. This led us to our “Transformation in Time” strategy, that commits to a connected model applying a systems design method. Think of a large spider web covering Planet Earth. All our activities need to be connected because, at the end of the day, they are in fact dependent on one another. This isn’t new. We started learning in the 1970s that environmental impacts had a global effect and that our use of finite resources would lead to a moment of crisis. 

“Climate-KIC started thinking on a larger scale, about how to build portfolios of connected innovation projects that learn from each other with a coordinated approach”

So, what exactly is EIT Climate-KIC doing now, taking on this switch of strategy? We are fully committed to large scale portfolios, something we call Deep Demonstrations. The whole portfolio stretches across multiple elements of societal change, asking ourselves: what are the levers of change we need to trigger systemic transformation?

And what levers of change are you working on?

We need to improve our current education system, by integrating sustainable thinking into it. But this includes increasing capacity building at all levels, from school children up to high-level politicians and CEOs.  We need to mainstream the circular economy as fundamental principles of innovation, it should not be considered a separate category or alternative form of innovation. We need to demand and push the financial system to change –  investments should not evaluate opportunities on a linear system, as our current financial system does. We need to base our funding criteria for businesses on circular criteria: all new business models need to be circular or they are not attractive, bankable investments.  

Importantly, fiscal policy and incentives need to change. The playing field is designed to favor linear rather than circular growth. This would point to a radical change in tax frameworks, subsidies and financial incentives. Also, when it comes to community engagement, how do we raise awareness around this? Behavioural change and consumer trends are critical levers of change for our society and economy. Nobody thought we could ban public smoking or have everyone wearing a seatbelt in a car, but mentality was shifted, stimulated with policy and regulatory measures to match the need. Other historical movements have also shown us that cultural change can happen in a relatively accelerated fashion with the right triggers. 

“Behavioural change and consumer trends are critical levers of change for our society and economy”

One of the things I like to say when discussing the circular economy, is that this set of principles feels like coming home. There is an easy acceptance of  circular economy activity because not too long ago, it was our natural way of living – taking, making and disposing was not an option. We need to rethink how we talk to people about these concepts, and learn how to communicate better and use media as a messaging multiplier.

It sounds like quite a deep change in philosophy. And, perhaps, a clear exemplification of it is given by the CICERONE project, which is basically aiming at changing the landscape of how circular economy innovations are funded in Europe. How did this project come about and how is it changing the rules of the game?

That’s a really good way to express it: it’s exactly about changing the rules of the game. We need to change the playing field, but we also need to change the rules of the game, so that being circular becomes advantageous. CICERONE focuses almost entirely on policy and financing of European research and innovation. In the European Union, we live in a bureaucratic, multi-level-governance society. There are different levels of actors that converge in a top-down approach where we are told what the rules of the game are. 

This, in a way, is a good thing. We know where the trigger points are. We know what the rules are, and we know where and how those rules put money in our system. Yet, the system we live by now, where our taxpayers' money goes back out to businesses, research and technological centres, is still based on a linear economy. But the challenges we are facing—whether it’s climate change, a pandemic, an economic crisis—don’t recognise these boundaries that we have created to govern. These challenges are large-scale, transversal and completely ignore geopolitical and cultural limits. What we are missing, and what CICERONE is trying to address, is the opportunity for the way we finance research and innovation to be a better fit for a circular economy.

“What we are missing, and what CICERONE is trying to address, is the opportunity for the way we finance research and innovation to be a better fit for a circular economy”

What does that entail?

The question is, how do we design funding mechanisms for research and innovation in Europe that address the true nature of circular economy challenges? What we need and what we’re moving towards is called joint programming. 

As an example, let’s say that the North-East corner of Spain has challenges that spill across the border into the South-West corner of France. How can these regional authorities address that issue together? Right now, it is difficult to utilise a purpose-built mechanism. Collaboration of this sort needs new and facilitated means that enable cross-cutting, systemic solutions.

So how do you create a mechanism that means they can equally address this issue together? When you start being able to blend funding sources, then you start being able to raise the amount of capital that is needed for large, cross-sectorial, cross-boundary challenges. Circular economy challenges are complex and require adequate capital. Even inside the same regional authority, funding comes from different funding streams, and each one has its own conditions and requirements. This forces decision-makers to think with a very siloed approach; it forces them to think that they can only use each funding stream for each specific activity. This defers to small scale, individual and incremental initiatives, rather than a broader, cross-cutting initiative. 

CICERONE aims to create a joint-programming platform for circular economy financing bodies (mainly public authorities) that can address the true nature of systemic challenges.

At its core, this change seems to be about allowing us to put our joint creativity at the service of systemic projects through a boundaryless funding system.

Exactly, the challenges are boundaryless, so the way we fund how we address them needs to be boundaryless too. And it’s not just about financing, it’s about convening the actors and pulling together a collaborative effort. We need to have a facilitator mechanism that empowers actors to say, “yes, it makes perfect sense, it’s very clear how we need to collaborate and work together”. At the moment, you often find that inside public authorities, it's common to discover that the right hand doesn’t talk to the left hand. 

Staying on this point, you mentioned earlier the top-down component characterising our European society. What kind of bold policies do you think we need at this point in time to really accelerate the circular transition?

One of the main challenges is that we need to accelerate the transition. We are in a big rush. Yet, we all know that when you do things in a big rush, you don’t tend to do them well. Unfortunately, we do not have the luxury to work slowly and steady, patiently waiting and hoping for change. We must create change. And we need to start big. I can throw one example out there. 

Please.

We need to stop subsidising the fossil fuel industry. If we want to create that level playing field, we need to stop throwing prizes at the wrong things. Ten years ago, it would have been controversial to say that. Nowadays it isn’t, because we all know that industry is not sustainable. They know they need to change, but they’re not going to change transformatively unless forced. Indirectly, we are putting obstacles and limitations on disruptive, circular innovation because it’s not receiving the same kind of step-up the fossil fuel industry is receiving. 

“If we want to create that level playing field, we need to stop throwing prizes at the wrong things”

So, number one for me is to take a firm stance on our current fiscal policies and tax incentives. If you want SMEs to change their business models and dedicate time, energy, and resources to be more sustainable, they need the support for that. We give them support for other things, why not give them support for circular innovations, knowing how critical it is to their and our economic resilience? These kinds of measures will force shift and accelerate a low-carbon transition. 

I already mentioned joint programming - developing new funding mechanisms that allow public authorities to address challenges together. And when we talk about consumer behaviour, we shouldn’t fear what imposing some measures will bring. We need to make sure we are facilitating in every way logical and circular options for the consumer. Subsidised public transport is an example of this. Choosing public transport should be more convenient, cost-friendly and accommodating than using individual cars. 

A very interesting feature of EIT Climate-KIC is that it’s not focused on one specific sector. As you said, circular economy is really about innovation in many different sectors. Using the helicopter view this approach facilitates, where do you see us already having the technology necessary, which only needs to be scaled? And where, instead, do you see us still lagging behind in terms of innovation and progress? 

There are a lot of areas where Europe is actually very technologically advanced - industrial symbiosis, for example, which is a circular economy at an industrial scale. These large-scale industries in Europe know exactly what they are doing, and they have the resources to invest in development and innovation to make sure they are as efficient as possible. They’re doing this extremely well, yet we are nowhere near achieving the full potential of industrial symbiosis in Europe because the replication and the scale isn’t there.

We have evidence that if we were to untap the full potential of industrial symbiosis across Europe, it would not only generate hundreds of thousands of jobs and create huge carbon emission reductions, it would also change the way we do business in a transformational way. Whilst the technology exists and we know it, the regulatory measures aren’t in place to be able to enable it to its full potential.

Instead, what don’t we know enough about yet?

We don't know enough about the regenerative economy. We need to improve on the regenerative side in sectors and value chains that are less technological, for instance land use and agriculture. Pushing technology and innovation into these sectors is more difficult, for a variety of reasons, but again, policy as a lever of change can trigger uptake. So once again, we are linking action-based innovation to policy and regulatory measures, but it’s also linked to our culture.

When you actually talk to farmers and agricultural sector actors and understand how they work, you identify cultural elements that should be respected. It's not as easy to upscale the use of digital tools or to upskill them on understanding the importance of efficiency at a technological level. But focusing on regeneration, a regenerative culture should be built into everything we do, across all sectors, not just the agricultural sector. Sustainable, resilient business models should have a component of regenerative principles integrated into production and consumption. So much advancement is needed here to allow the necessary healing of our use of resources.  

“Sustainable, resilient business models should have a component of regenerative principles integrated into production and consumption”

And, finally, we don’t know enough around our metrics and indicators. Our playing field tells us that the metrics and indicators we’ve used for innovation and growth so far, are not the same ones we need to be able to shift to a circular society. What criteria do we need to start applying to accurately evaluate a true transition? We don’t know nearly enough about it yet. And we seem a bit hesitant to take it on board, because it feels like a betrayal to traditional, more comfortable indicators of development we’ve been using for a very long time.

A final question on behavioural change and community engagement. At the beginning of our conversation, you argued that the circular economy has been gaining momentum due to the fact that it feels like coming home. But standing where we are right now—with incredible pollution in our lands and seas, climate change, excessive consumption, and waste in our production processes—it seems like we have lost the way home. What does the path to go back home look like to you?

I think there needs to be an epic mentality shift around the question: what do I need to exist? 

Our generation has grown up with access to so much that learning to live with less feels like punishment. However, if forced to live with less we probably wouldn’t notice much of a difference, because we know that material ownership is not linked to human happiness. Yet, we resist because we have grown to value commodities based on a psychological need rather than physical or physiological need. . 

So, for me, the pathway to a state of appreciation of living with less is linked to raising awareness and educating ourselves through experience. I include every single one of us in that - including myself. How can we educate ourselves to understand that the transformation we are talking about is not about losing, it’s about gaining? 

“How can we educate ourselves to understand that the transformation we are talking about is not about losing, it’s about gaining?”

This is an existential problem for us human beings. We have always been taught that success means more, including elements of society that have deep value such as: more education, more health service, more quality of life. Yet the criteria we use to evaluate our quality of life are distorted compared to what we actually utilise as a need. How do we learn to change the way we value what we need, without feeling like we’re resigning to a lesser existence?

If you had asked me 10 years ago about what was necessary to change things, I would have given an answer around technology, and later on I would have said regulatory measures and top-down approaches. Today, I feel really the best resource we have on this planet, the best untapped resource, is the human potential to dream, imagine and develop new and different things. The biggest potential resource we have inside a circular economy is the human being. So how do we tap into invaluable resources to really make a shift? To me, that’s going to be the pathway forward. When you look at our history, we have achieved harder things, so we should be able to achieve this. I genuinely believe it’s possible, it’s just not going to be easy. 

Yes and, as a matter of fact, we don’t have any other option. Time is running out.

A conversation between Cliona Howie del Rìo & Emanuele Di Francesco

November 2020