The circularity paradox in the European steel industry

What happens when solutions to economic system challenges start to create their own problems?

Researching the European steel industry, Dr Julian Torres discovered that the more integrated supply chains are, the easier it is to track the lifecycle of steel alloys and the elements that go into them. Higher levels of integration make it easier to bring steel back via reverse logistics without losing too much value. The more you do this, the less iron ore you need to mine and melt, and the longer the reserves of high-grade iron ore – which needs less energy to transform into steel – will last. And integrating supply chains does not necessarily mean having the different steps all within the same company.

Recycling, remanufacturing and refurbishing are indisputably important tools for reducing our consumption of natural resources. These activities contribute to what scientists call circularity: making sure we use materials for as long as possible, over and over, so that we exploit nature less and less.

Doing so requires creating what are called “secondary markets”, where used materials are gathered up, reworked and injected back into the economy. While this is an essential part of creating circularity, there can sometimes be unintended and negative consequences. A striking example is the secondary metals market: it has been a success), creating new jobs and business opportunities), but the environmentally friendly goal that it once had is no longer a priority.

In Europe, we recycle more than 70% of used steel on average, and just over 30% of all recycled or remanufactured steel is produced in furnaces that use electricity rather than burning coal. Not bad, but no longer enough when considering the increasing steel demand from developing nations, which are growing rapidly.


Read Julian’s recent piece for The Conversation here explaining his findings, and what the steel industry can do to improve.

He has also created this entertaining video to help explain the circularity paradox – a.k.a. the “little monster” Scrappy! Check it out, and be sure to share it.

Dr Julian Torres is a recent graduate of the AdaptEcon II PhD programme. During the Programme’s final retreat in Iceland in August he participated in workshops with the WEAll Amp team. Julian received funding from the European Commission’s Horizon 2020 Programme via a Marie Curie Fellowship on Excellent Research (grant agreement 

675153). Julian is a member of the International Society for Industrial Ecology and a Board Member of the Jean Monnet Excellence Center on Sustainable Development.

Photo by Scott Webb from Pexels

Dr  Yannick Beaudoin is a WEAll Global Council member. He’s also Director General of the David Suzuki Foundation in Canada (a WEAll member organisation).

He recently appeared on cosmetics industry podcast EcoWell to discuss the wellbeing economy and how sustainability and alternative economic thinking apply to the cosmetics industry.

So, check out the original podcast here, or listen below:

Reposted from Junxion 

Capitalism is suffering from a crisis of legitimacy and nowhere is that truer than in the banking sector. Following the 2007/8 crash, banks have focused on compliance and getting their house in order, but they have broadly failed to win back the trust they lost.

Working together in a process convened by the UN Environment Finance Initiative (UNEP FI), a group of 30 banks have developed the Principles for Responsible Banking—a framework for all banks to show that they understand their purpose is to serve and contribute to meeting society’s needs and individuals’ goals. Following a six-month global consultation, the final version of the Principles and supporting documents were released this week (July 25, 2019). The Principles will be opened for signature on 22 September 2019 at the UN General Assembly.

To cite r3.0—the multi-stakeholder platform that promotes Redesign for Resilience and Regeneration of which Junxion is an Advocation Partner—it’s the kind of ‘radical collaboration’ needed for system change. The Principles for Responsible Banking aim to create nothing less than the sustainable banking system of the future.

Who’s involved?

The 30 founding banks come from around the globe and include China’s ICBC—the world’s largest bank—BNP Paribas, Barclays, Citi, National Australia Bank, BBVA and South Africa’s Land Bank. A further 40-plus banks have committed to becoming signatories and these include Standard Chartered, ABN-AMRO and Amalgamated Bank from the US.

There are also a number of non-bank endorsers of the Principles—banking organizations such as the European Banking Association and the World Savings Bank Institute as well as specialist service providers such as Datamaran and responsible investment advocates such as ShareAction.

What are the Principles for Responsible Banking?

The Principles for Responsible Banking are a framework for all banks to show that they understand their purpose is to serve and contribute to meeting society’s needs and individuals’ goals.

The six principles signatory banks commit to are:

  1. Alignment We will align our business strategy to be consistent with and contribute to individuals’ needs and society’s goals, as expressed in the Sustainable Development Goals, the Paris Climate Agreement and relevant national and regional frameworks.
  2. Impact & Target Setting We will continuously increase our positive impacts while reducing the negative impacts on, and managing the risks to, people and environment resulting from our activities, products and services. To this end, we will set and publish targets where we can have the most significant impacts.
  3. Clients & Customers We will work responsibly with our clients and our customers to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations.
  4. Stakeholders We will proactively and responsibly consult, engage and partner with relevant stakeholders to achieve society’s goals.
  5. Governance & Culture We will implement our commitment to these Principles through effective governance and a culture of responsible banking.
  6. Transparency & Accountability We will periodically review our individual and collective implementation of these Principles and be transparent about and accountable for our positive and negative impacts and our contribution to society’s goals
How will banks implement the Principles?

Within four years of signing the Principles banks must fully implement the three key steps of analyzing positive and negative impacts, target setting and implementation, and reporting on progress.

The impact analysis has to ‘identify the most significant (potential) positive and negative impacts on the societies, economies and environments where it operates’ and identify the business opportunities to increase the positive and decrease the negative ones.

Secondly, banks have to set two or more targets covering at least two of the priority impact areas. These targets have to be SMART (specific, measurable, achievable, relevant and time-bound). Banks have to begin taking steps to meet the targets, including establishing a governance and oversight structure to monitor progress.

Thirdly, banks have to publish their impact analysis and report their progress in implementing the Principles and meeting their targets, and this self-assessment has to be subject to limited assurance.

So what?

A responsible business professional might say this is sustainability 101 for banks: Set a vision, improve performance with the help of some targets, engage with all the people that matter in the shape of your customers and stakeholders, look at how you make decisions and your company culture and report on progress.

But it’s not just any old vision that the banks can set for themselves: it’s a vision of what the world needs. The draft Implementation guidance for Principle 1 talks about ‘creating consistency between the bank’s value creation model and the SDGs and the Paris Climate Agreement …’. This is big: the Principles are normative, explicitly calling on banks to work towards how the world should be.

It’s not just any old vision that the banks can set for themselves: it’s a vision of what the world needs.

And this theme is continued in Principle 2 about measuring impact and setting targets. On the face of it, that looks like any sound sustainability programme. But those targets have to meet or exceed the targets in the SDGs and the Paris Climate Agreement. Again, signatories have to contribute explicitly to what society needs.

And if those targets are judged to be failing to address that bank’s most significant targets or are not in line with the ambitions in the SDGs and Paris, then that bank can be removed from the signatory list. So, the Principles have teeth.

Will the Principles achieve any real change?

There are definitely reasons to be cheerful. The Principles elevate sustainability to the strategic level—this is more than some risk analysis on an individual transaction or an ESG (environmental, social and governance) screen on a particular portfolio. The Principles are saying society’s goals have to form an integral part of banks’ own strategic objectives.

And they are deliberately designed so banks can ‘start where they are’. No matter their starting point or context, developed or developing country, banks can get on board so the Principles create a framework for the global banking industry.

A key determinant of how much progress banks will make to delivering on the promise of the Principles lies  in the interpretation of ‘alignment’—a question that was raised In the public consultation that just closed. The official answer is that ‘Alignment requires that a bank’s business strategy is consistent with and geared towards making a positive contribution to the SDGs, the Paris Climate Agreement and relevant national or regional frameworks, where a bank is best positioned to do so through its business.’

This is clearly designed to leave space for individual banks to make their own judgement. But James Vaccaro, director of strategy at the ethical Triodos Bank, one of the founding banks that led the development of the Principles, is confident that the Principles are well designed to achieve change across the banking system:

“We have our ‘light on the hill’ in the shape of the SDGs and Paris and we have that ‘ramp effect’ where companies make progress as they individually go through their iterations of analysis, engagement and implementation. But crucially there is sharing between the individual signatory institutions as well. And that means you will have a race to the top, which creates the right conditions for non-linear change and the potential for the banking industry to take some really big steps towards the world we want.”

What’s the big opportunity here?

This is much more than a voluntary industry initiative that banks glibly sign up to, warns Madeleine Ronquest, Head of Environment, Social and Climate Risk at South Africa-based FirstRand Bank—also a founding bank of the Principles:

“We want to properly apply our minds so that the process and the information we publish will stand up to scrutiny. And there is a lot of groundwork that needs to be done in advance, engaging critical stakeholders, internally and publicly, spending as much time as may be required and being as inclusive as possible. The Principles are very aspirational and very ambitious and that was the intention in developing them. Signing them represents a serious commitment.”

The real opportunity of the Principles is to convince a sceptical world that businesses can and will collaborate for the common good.

So, they are not going to be easy to implement—but we all know they are necessary. The Principles represent an outstanding opportunity for the banking industry to do the right thing. To demonstrate that they are serious about backing up their social purpose statements with real impact that ‘achieves shared prosperity for both current and future generations’, as the Principles’ mission statement says.

And given the crucial role that finance plays in society’s collective efforts to create a better future, there is a lot riding on how banks step up here. It’s more than securing their own legitimacy and creating the sustainable banking system of the future, it’s about financing the change we need to see in the world.

Even more than that, we need these industry initiatives—these ‘meso-level’ activities in r3.0 parlance – to succeed and society has to see that they do. The real opportunity of the Principles is to convince a sceptical world that businesses can and will collaborate for the common good.

It’s what we at Junxion call being ‘audacious, together’. It is leadership.


Adam Garfunkel is an owner and Managing Director at Junxion. For more than 20 years, he’s been involved in corporate sustainability initiatives and led the team that created the communications strategy for the Principles for Responsible Banking.

This piece was originally posted on CDS Scotland

It is ten years since I took up my role as director at Co-operative Development Scotland. As someone who is passionate about creating a progressive economy – one that delivers for people and planet – it has been a real privilege to lead CDS over the past decade. As I prepare to move on, I’ve been reflecting on what we’ve achieved.

Initially on the edge of the economic development agenda, co-operative models have shifted firmly to the mainstream. Thousands of businesses and individuals have benefited from the 290 consortium co-operatives, community co-operatives and employee-owned businesses established in Scotland over the past ten years.  We have seen a fivefold increase in employee ownership since we started promoting the model and the pace of take-up is accelerating.

This growth has led to Scotland being viewed as a pioneer in co-operative development, with many aspiring to echo our approach. Over the years, I have been invited to speak at a range of international events and forums, including in the co-operative heartlands of Italy and Spain. A true recognition of our success.

In 2018, the Ownership Effect Inquiry, an independent review into employee ownership’s impact on the economy, recommended that the UK Government replicate “Scotland’s successful scheme that has delivered a tenfold return on investment for every £1 devoted to on-the-ground support.”

There are a number of reasons behind Scotland’s success in this area. We’ve had exemplary support from the Scottish Government, which recognises the key role that co-operative models can play in delivering its economic goal of Inclusive Growth – a fairer economy which distributes wealth more widely and addresses inequalities.

An encouraging amount of cross party support has also led to increased dialogue around the models, with parliamentary debates on the importance of co-operatives and employee ownership to the Scottish economy. I have frequently been invited to contribute to meetings of the Economy, Jobs and Fair Work Committee (and its predecessors), where I’ve shared some of Scotland’s many success stories as evidence of the wider economic and societal benefits of co-operative working, bringing these to the forefront of the economic agenda.

The Scottish Government’s commitment to promoting co-operative models was further demonstrated with last year’s launch of ‘Scotland for EO’, an industry leadership group co-chaired by Jamie Hepburn, Minister for Business, Fair Work and Skills. Led by industry working in partnership with the public sector, it has a championing, influencing and facilitating role which aims to build and strengthen Scotland’s EO community. ‘Scotland for EO’ is built on the immense pride and passion displayed by Scotland’s employee owned businesses in endorsing the model over the years – hugely valued support which has been vital in effecting wider change.

Also key to the surge in awareness of co-operatives is the work of a dedicated team here at CDS, whose commitment and approach to promoting the models has been instrumental to their growth. From raising awareness among professional advisors to providing businesses with advice and financial support, the team is passionate to drive momentum. With the ongoing support of our colleagues at Scottish Enterprise, Highlands and Islands Enterprise and Business Gateway, we have continued to attract increasing demand for our services, and as I move on, there is a strong pipeline of businesses looking to adopt co-operative models, particularly EO.

While progress has been significant, there remains work to be done to reinforce the benefits of co-operative models, and the route they offer to a more equal economy. As I hand over the reins to my successor Clare Alexander, I feel very positive that our activity over the past ten years has paved the way for continued change.

With a wealth of experience in driving better business through workplace innovation, Clare is ideally positioned to fully maximise the opportunities, and further drive the uptake of co-operative models in line with the Scottish Government’s Inclusive Growth Strategy. With her belief that “business leaders should be predisposed to see the power of their people”, her values are synonymous with those of ‘Scotland for EO’. Her position on the board will see her working towards the group’s ambitious goals of increasing the number of employee-owned businesses in Scotland to 500 by 2030, and by 2040 to have created the best environment for EO businesses to thrive with Scotland having the highest density of EO businesses in the economy as a consequence.

Meanwhile, I plan to continue to promote inclusive approaches through the Wellbeing Economy Alliance – a new global collaboration of organisations, movements and individuals working together to change the economic system to one that delivers human and ecological wellbeing. I look forward to building on what we’ve achieved over the past ten years and continuing to promote co-operative and employee ownership models as a way of achieving a fair and inclusive society.

There’s been a lot in the news in recent times about the sheer volume of money sloshing around the system and how it is being put to use. In our opinion at WEAll, nowhere near enough of it is finding its way to productive regenerative activities.

Money is finding its way into many areas of the economy that do not take a long-term nor a wellbeing view. Take for example how so much of bank lending since the 2008 Great Recession has in fact found its way back into the housing sector…the very sector at the heart of that crisis…or into sending personal debt to levels higher than they were in the run up to the crisis, or simply being used in share buy-back schemes.

This focus on rentier returns – compound interest derived from mortgages or interest rates on private debt (credit cards, loans for cars, education etc.) – or simply concentrating wealth through returning business ownership to private hands is stifling the transition to a truly sustainable and stable economy that truly has the wellbeing of all at its heart.

In this context,  it was incredibly heartening, although a relatively rare news item, to read the other day that the founder of a successful UK based audio and visual goods retailer – Richer Sounds – is not extracting the maximum personal wealth from selling his company but investing in its long-term future by handing over a controlling stake in it to an employee owned trust.

Democratic ownership

Employee owned trusts are not a new invention, but the rarity of this news in today’s economy is striking. The scarcity of the act should not diminish the significance, however.

It’s significant for a few reasons. Firstly it is a recognition by the founder – Julian Richer – that the business’s employees are a key part of the business’ previous and future success. Politicians love to talk about ‘wealth creators’ as though entrepreneurs operate in a vacuum receiving no support from outside. Undoubtedly entrepreneurs are a vital part of the success of any organisation and the business world, but not the only one.

Secondly, it is also a recognition that giving employees a stake in their own financial future makes long-term financial sense for an organisation. Making explicit the link between individual performance and organisational financial health can be motivational. Employees, now also owners of the business, also get to share more parts of the economic pie and one sees higher retention and lower attrition rates. Richer himself has previously recognised (through his management book) how providing secure, well-paid jobs with a happy workforce is key to business success over the long-term.

Thirdly, it provides a level of empowerment that is strongly connected to wellbeing. I recall a time when speaking with employees of a well-known UK employee owned business who said ownership was important for them because it gave them a chance to participate in the decision-making process, not simply for the additional financial rewards that the model provided to them.


Cooperation and Collaboration is a key building block of a wellbeing economy. Sharing the wealth among all stakeholders, not simply shareholders, is a key tenet of the wellbeing economy and employee ownership is one way to begin to achieve that. Going further however, we must ensure that business has a purpose that truly identifies environmental and social aims within its DNA and by the nature of its work is regenerative to society and the environment. It is this challenge that we all need to embrace and WEAll looks to amplify when great examples of such ways of work emerge.

Michael Weatherhead is the Development and Practice lead for WEAll, and coordinates the WEAll business cluster. Employee ownership, as discussed in this blog, will feature in the forthcoming WEAll publication ‘Alternatives to Business as Usual’ being developed by the cluster

On Tuesday 20th November, Steve Murrells, CEO of the Co-operative Group UK gave a bold speech to the National Social Value Conference in Manchester.

WEAll is sharing (with permission from the Co-operative Group) some highlights of the speech, as an example of a business that is showing leadership in changing its relationship to society.

“Why leadership matters – How business must change its relationship to society” – extracts from Steve Murrells’ speech      

The Co-op Group is a £10bn a year operation. We have three and half thousand Co-op food stores across the UK and we supply wholesale to more than 5,000 shops run by Nisa partners and Costcutter.

In addition, we’re the country’s biggest provider of funeral services with 1,000 funeral homes. We offer legal help too and we’re now the number one provider of probate in the UK and we have a successful insurance business.

The top mutual and social enterprise businesses pay more tax in the UK than Google, Amazon, Facebook and Apple combined. Although, that may say more about them than us!

Businesses driven by a social purpose are on the increase. There are good reasons for this, which I’m going to come on to.

I think we must remember that most of the social and economic challenges facing our country existed long before June 23rd 2016 [Brexit referendum in the UK].

In business itself I’m thinking of issues such as: trust, corporate transparency, accountability, executive pay, diversity, gender and inclusion.

As for the broader social issues: I had in mind

  • the growing economic divide between the most and least well-off, both in the UK and around the world.
  • the consequences of a global way of doing business that’s left too many people – and whole communities – as losers.
  • A Health Service under incredible strain
  • the lack of affordable homes for a younger generation, and the likelihood that today’s young people entering the workforce will be less well off than their parents or even grandparents’ generation.

And then there’s climate change.

From Ke-roola in India, to Cumbria in the UK, extreme flooding is already causing regular chaos and destruction.

Watching the terrible news of the dead and the missing after the wildfires in California, it’s clear that even the richest state in the richest country in the world cannot protect its citizens from climate change.

As an insurance provider, climate change already has to be factored in to our business planning.

But despite all of the evidence that global warming is no longer a potential risk but a current crisis, we’re still failing to face into it.

Not only are the challenges we face considerable, our ability to tackle them is hindered by our divisions. We have never lived in a more divided society:

  • The distrust towards government and traditional sources of authority
  • The Brexit arguments which divide households across Britain
  • The growth of strident nationalism across Europe
  • The tribal ‘culture wars’ that are scarring the United States

There is much that is broken in societies across the world.

And I believe business needs to acknowledge its part in creating this situation.

Trust in big business is at an all-time low.

It appears to be part of the problem, not part of the solution.

That’s due to a lack of transparency, a perception of tax avoidance, a feeling that there’s too much greed in the boardroom.

Of course most businesses don’t deserve this kind of harsh criticism. But there’s too many that do. And too many that think they’re doing a better job than they really are.

Business should care about their contribution to the communities they serve because all the research tells us that the upcoming generation of employees and customers care about it very much. Deloitte found that 92% of millennials believe that business should be measured by more than just profit and should focus on a social purpose too. In just seven years’ time, millennials will make up 75% of the global workforce. On what criteria do you think they’ll choose where to invest their time and talent.

At the Co-op…the question has never been: “Do we have a social responsibility in addition to generating profits?”

But rather: “How do we best express the social responsibility we were set up to address in the first place?”

One thing the Co-op has learnt over the years is that you cannot ‘do good’ in society unless you are also running a good business.

We have to be commercially successful. We do not operate in some kind of ‘Co-op bubble’ untouched by the rest of the world. Even our most passionate co-op members will not stick with us if our food shops are shoddy or our services are second rate.

But equally, we must not forget why we’re here.

There’s no point being exactly the same as everyone else. In our case, we could succeed as a business, but fail as a Co-op.

Mainstream business often makes the mistake of thinking that social enterprise is charity by another name.

At the Co-op we don’t see the good things we do for the community as some kind of corporate philanthropy. Nor is it merely a cost to our marketing budget.

And as a national business, operating in every postal area in the country, we choose to speak out and campaign on issues of local concern to our millions of members.

Social Isolation, Modern Slavery, and Safer Communities are three issues we’re campaigning on and talking about at a national and local level.

I don’t want you to think that we’ve totally cracked how to be a socially driven business operating at a national scale.

I talked earlier about climate change.

It’s an issue which has no respect for national borders.

We need international level playing-fields if business is to take the necessary actions to radically reduce our dependence on a carbon based economy.

Governments, acting internationally, have to lead on this. But politics and long-term thinking don’t always go together.

So business must help by giving our politicians the confidence and economic mandate to go further in their legislation and planning.