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Circular economy in Switzerland

Circular economy in Switzerland

We’ve long lived by a simple cycle: take, make, waste. That model of production and consumption has worked until now. But as our population grows and our natural resources diminish, we need new models.

A circular economy offers solutions.

This article explores the concept of a circular economy, its significance for Switzerland and how you can contribute to it.

You’ll learn about three models for a circular economy, deep dive into two critical industries, meet four startups already shaping the future and get the chance to connect with us for free entrepreneurial support.

Today’s economy is (mostly) linear

A linear economy follows a straightforward progression. We take resources from nature and process them into goods and services. After we use them, we throw them away.

Every product has a clear beginning, middle, and end.

We also assume that the earth’s resources and regenerative power are infinite, which couldn’t be further from the truth.

We extract rubber to manufacture car tires, use them for 50,000 kilometers and then discard them in a Sub-Saharan landfill where they are often burned. Our phones are made of rare minerals mined under terrible conditions, get used for roughly five years until a newer model arrives and they’re thrown out.

The economy hasn’t always been that way. This wasteful approach is a relatively new phenomenon that came about in the 18th century, in tow with the Industrial Revolution.

Before, most of humanity followed the principles of a circular economy—not out of altruism or compassion, but out of necessity. Most, even very basic, goods were hard to acquire and, therefore, used for as long as possible.

With the industrial revolution came the ability to produce (and discard) at a much larger scale. This, in turn, fueled demand. Coupled with the emergence of capitalism, it was a perfect environment for seemingly unlimited growth.

But now we come to realize that our resources and the ecosystem’s capability to absorb waste are finite. It’s simply impossible to keep producing, using and wasting at the pace we do now.

The solution: adopting circular practices for a sustainable economy.

What is a circular economy?

A circular economy, sometimes also called a closed-loop economy or regenerative economy, aims to produce and use goods and services in a way that is sustainable for both, people and the environment.

There is no single circular economy model, but all models have a common goal: to promote the usage of resources in a closed loop.

This means that products and services are designed, manufactured and used in a way that generates minimal to no waste because every resource is reused indefinitely.

Three models for a circular economy

1. R-Strategies

The R-Strategies model is fairly popular and widely used. It incorporates words that start with “R” to indicate the progression from a linear economy to a circular economy.

This idea started with “The 3Rs”: reduce, reuse, recycle.

Over time, new Rs were added, with some proponents of the R-Strategies suggesting even up to 12 Rs:

2. Doughnut Economy

The Doughnut Economy offers a multidimensional model.

The inner circle of the doughnut depicts the sustainable development goals as defined by the UN. The outer circle depicts the planetary boundaries we have to respect if we want to keep the planet alive.

In an ideal economy, according to the doughnut model, we should never (and can’t!) expand beyond our planetary boundaries and neither contract below the social foundations.

3. The Butterfly Diagram

The Ellen MacArthur Foundation proposes a more granular model.

The Butterfly Diagram illustrates the continuous flow of materials in a circular economy. There are two cycles: the technical cycle and the biological cycle.

In the technical cycle, products and materials are kept in circulation through processes such as reuse, repair, remanufacture and recycling. In the biological cycle, the nutrients from biodegradable materials are returned to the earth to regenerate nature.

Why Switzerland needs a circular economy?

There is a global effort to move to a more circular economy. This is, first and foremost, driven by the goal of avoiding climate breakdown. We need to save the planet from all the waste, soil degradation, pollution, overheating and overusing our finite resources.

In short, there is no other way.

Switzerland specifically can—and should be—at the forefront of this transformation.

On an environmental level, adopting circular practices helps Switzerland preserve its unique landscapes and reduce greenhouse gas emissions to maintain and subsequently increase the quality of life in Switzerland and maintain biodiversity.

On an economic level, Switzerland is a country with limited natural resources. By minimizing waste and maximizing the utility of existing materials, Switzerland can reduce its dependency on imports and enhance resource security.

On a social level, a circular economy model empowers individuals to make sustainable choices and participate in circular practices, such as repairing, sharing or recycling. This fosters a sense of community and collective action towards a common goal.

Why Swiss companies need to adopt circular practices?

Companies take big risks by not moving on to more sustainable practices early on and waiting for regulations or market demand to force their hand.

They have the power to shape consumer behavior and be at the forefront of the transformation to a circular economy that will benefit them in many ways:

  • Cost reduction and efficiency.
    Circular strategies such as rethinking design, reusing, repairing and reducing resources can significantly drive down costs. Companies can save on raw materials and energy, enhancing profitability and resilience against price volatility in global markets.
  • Innovation and competitive advantage.
    The shift towards circularity drives innovation in product design, materials and processes. Swiss companies can lead the development of circular solutions, paving the way for others to follow.
  • Opportunity to redesign everything.
    Almost all the products and services we ever created are linear. We now have a chance to redesign every single one of them, which opens immense space for creativity, innovation and inspiration.
  • Access to new markets and revenue streams.
    By offering circular products and services, businesses can tap into new customer segments. Repair services, product-as-a-service models and circular materials cater to a growing demand for sustainable options.
  • Regulatory compliance and leadership.
    Anticipating and adapting to regulations focused on sustainability and waste reduction positions companies as industry leaders. Proactive engagement in circular practices can influence policy development and set industry standards.

It’s important that companies take sustainability seriously and not just use it as a marketing ploy. If not, they might accidentally or on purpose engage in greenwashing (the act of making false or misleading statements about the environmental benefits of a product or practice).
Greenwashing doesn’t benefit the environment or the company in the long run. Once discovered, a business’ reputation suffers massively.

Switzerland’s challenge in transitioning to a circular economy

At our recent event, “Sustainable construction”, we discussed this topic.

We need to find a way to measure circularity and establish a baseline while simultaneously implementing strategies and technologies to achieve our goals.

Dr. Michael HaesslerSr. Sustainability Manager, Roche

The Circularity Metric

One potential candidate for such a baseline on a national level comes from Circle Economy, outlined in their Circularity Gap Report.

The Circularity Metric is a tool designed to quantify the degree to which an economy adheres to circular economy principles. It measures the extent to which materials are being kept in use, thus reducing reliance on raw material extraction and minimizing waste.

It helps to understand progress towards achieving a circular economy, identify areas for improvement and facilitate strategic decisions to enhance sustainability.

The calculation of the Circularity Metric is based on the flow of materials through a system and assessing the proportion of those materials that are cycled back into it. This can be expressed as a percentage, with a higher percentage indicating a greater level of circularity.

If a system were to achieve a score of 100%, it would signify perfect circularity, where all material input is kept in use and no waste is generated.

Switzerland’s Circularity Metric is at 6.9%

This leaves Switzerland with a Circularity Gap of more than 93%. This means most material is either wasted, lost or unavailable for reuse.

For comparison, this is slightly below the Circularity Metric for the global economy, measured at 7.2%.

While Switzerland looks good in a comparison table with its European neighbors, it’s still far from operating sustainably. Developing countries like Ethiopia, Nigeria and Pakistan, for example, are massively lifting the global average.

On the downside, these developing countries generally struggle to meet basic needs for healthcare and education, so their primary objective is to improve living standards, which will inevitably lead to more consumption.

This highlights how important it is to advise society not just to “consume less” but to rethink the way we produce entirely.

When looking at Switzerland through the lens of the Circularity Gap Report, the culprit of its low circularity becomes apparent.

Switzerland is an extremely consumption-heavy country

The Swiss consume 19 tonnes of virgin materials per person per year. That’s more than double the sustainable level and well above the European average. Only 10% of that material comes from domestic extraction. The rest is imported, putting additional strain on ecosystems elsewhere.

For once, Switzerland’s usual strengths (a good economy, a strong currency and a talented workforce) aren’t the solution but rather a hindrance.

The viability of a circular economy in Switzerland ultimately hinges on consumer behavior. A shift towards a more resource-conscious lifestyle is crucial.

But this shift shouldn’t start with the consumer!

Instead, it should start with governing bodies and innovative companies.

Cities and regions should drive demand for sustainable business models and businesses should already adopt circular practices to influence consumer behavior.

Assess your company’s sustainability

Sustainability reporting is a must for every company. Those who fail to adopt sustainable practices now will be left behind soon, as regulations, partners and customers set new standards of demands.

While the Circularity Metric is useful for assessing sustainability on a national level, we propose simpler, more granular frameworks for a company-wide analysis.

If you operate a startup, use one of our 7 free tools to identify your current sustainability position and explore opportunities for improvement:

How startups and entrepreneurs can shape Switzerland’s circular economy?

While consumers often dictate what companies produce, it can work the other way around as well. Innovators create new ways or technologies to do something better or more cost-efficient, and demand follows.

Prime example: sustainable construction

The construction industry is an important sector in this transition to circularity. Housing alone represents 17% of Switzerland’s total material footprint.

Every country has its own history of sustainable construction. Adobe huts in Africa, wooden buildings in rural Switzerland and bamboo structures in Asia. We lost these sustainable construction practices during globalization. Now, everybody uses the same “standard” building materials with no regard for local resources or skills. I consider this a mistake in the system. We need to find our way back to our roots, to building with local materials that are there in abundance and connect them with today’s technology.

Johannes EisenhutCEO, SENN Development

Johannes perfectly highlights the desire of building companies to incorporate new, sustainable solutions.

As innovative startups and entrepreneurs develop and deploy those solutions—such as green building materials, energy-efficient designs and modular construction methods—they not only showcase the feasibility of sustainable construction but also cultivate a market demand for these practices.

In a recent event, we had numerous startups introduce their innovative sustainable construction solutions.

We got a tour through the new HORTUS building at the Main Campus in Allschwil, gained insights into innovative and sustainable construction practices and had the opportunity to network with leaders from various sectors to foster partnerships that could lead to future sustainable projects.

To give you a glimpse into the world of sustainable construction, we introduce three of the startups that pitched their solution at the sustainable construction event.

WAYNERR® is a patented technology and product brand based on sustainable leather from recycled leather waste. Macroporous leather is a highly porous collagen based structure, with unique properties to improve thermal insulation, acoustics or even used as interior décor elements.

We create unique textures, colors with practically 0 waste. Compared to currently used insulation panels (glasswool, rockwool) - we use up to 20'000 times less energy per m2, and reuse over 90% of the water for the following production.

Dr. Vladas SnieckusCo-Founder, Waynerr

Viride specializes in optimising building projects by focusing on sustainability, circularity, and energy efficiency. Utilizing Building Information Modeling (BIM), the viride platform analyzes and forecasts the embodied, operational, and mobility energy, as well as their related GHG emissions of buildings. It benchmarks these metrics against Swiss sustainability standards such as Minergie-ECO and SNBS, ensuring that projects meet sustainability targets.”

I was astonished by the processes taking place for building energy and CO2 emissions optimisation. I knew there had to be a way to do it better.

Anita NanevaFounder, greenBIM

Kohlenkraft creates sustainable building materials by converting biochar—transformed agricultural waste—into a construction aggregate. This method not only utilizes waste products but also helps in carbon sequestration, making the building process more sustainable and contributing to reducing the construction industry’s carbon footprint.

I got involved in a project around embodied carbon and realized that there is a lot of theory but no available materials to realize those theories.

Charles Gerike-RobertsCo-founder, KohlenKraft

Oxara has developed a technology that repurposes excavation material into cement-free building products. This reduces the environmental impact typically associated with cement production, cutting CO2 emissions by up to 80%.

I want to give the global population access to safe building possibilities at a low cost. Current solutions make that impossible. With Oxara, I can make it possible.

Dr. Gnanli LandrouCo-founder, Oxara

The role of high-tech

Technology is a significant positive force in the transition from a linear to a circular economy.

High technology, often termed “high-tech,” is the application of advanced scientific knowledge and processes to create products and services that are cutting-edge and innovative.

Some examples of high tech include AI, nanotechnology, advanced robotics and cloud computing.

Innovations such as artificial intelligence, advanced materials science, precision engineering and next-generation biotechnologies are examples of high-tech solutions that can drive the transition toward a circular economy.

These technologies allow for smarter product design, efficient energy use and the development of new materials that are easy to reuse, repair, remanufacture, repurpose and recycle.

High-tech solutions can radically transform traditional industries, making them key players in reducing waste and lowering the dependency on raw, often non-renewable resources.

One such example is industry 4.0, where high technology fundamentally changes the manufacturing industry.

High-tech in manufacturing

The manufacturing industry is a significant contributor to Switzerland’s total carbon emissions.

Advanced manufacturing industries, for example, make up a large part of both the material and carbon footprints, representing 41% and 36% of the totals, respectively.

Circularity Gap Report Switzerland

At the same time, we only fulfil slightly more than 10% of our material demand by extractions within Switzerland. 82.5% of the material we use in manufacturing stems from imports.

This is why the manufacturing industry is such an important player in the transformation to a sustainable Switzerland.

A 2021 research paper called “Nexus of Circular Economy and Industry 4.0 to achieve the UN Sustainable Development Goals” details some industry 4.0 technologies and outlines how they can help get closer to our sustainability goals.

Innovation and technology play a big role in a transition to a circular economy.

Nicole Probst-HenschHead of the Department of Epidemiology and Public Health, Swiss TPH & Professor of Epidemiology

You can help make Switzerland more circular

To achieve the goal of circularity, it can’t be an afterthought. We have to completely redesign our products and services from scratch with circularity at their core.

If you’re looking to uncover and tackle sustainability topics in your startup, let us help.

We set you on the right path from step one with education, consultation, accelerator programs, funding resources, networking and more.

Our services are free to qualified applicants!

johannes bohren

Do you have a question regarding sustainable innovation?
Johannes will gladly assist you.

Johannes Bohren

Director Entrepreneurship

Email Johannes

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