Waste often seems inevitable in many situations. For example, take a packet of crisps— a staple snack across many countries. The multi-material ‘metallized’ plastic packet cannot be reused, recycled or composted, so it ends up in waste every single time it is consumed. What many of us don’t realize, however, is that a packet of crisps will take up to 80 years to disintegrate. While products like these make waste seem unavoidable, the truth is that they have been designed to be “disposable”, a process introduced by humans which is having detrimental effects on the planet. Design as it created this “linear model” is the solution to make a product more circular (for example, an appropriate choice of materials is essential to make recycling effective).

Every year, the world generates over 2 billion metric tons of waste, a figure expected to reach up to 3.4 billion by 2050. Additionally, over 100 billion tons of material resources enter the economy every year on a global level, according to the World Bank. From materials, minerals and fossil fuels to organic materials from plants and animals, this staggering figure is driven by the high level of consumption in high-income countries as well as the rapid growing demands in emerging economies. Nonetheless, only 8.6% of these resources get recycled and used again. 

According to the World Resources Institute, we would need 1.5 Earths to sustainably support our current resource use. Shifting from a linear to a circular economy in all sectors of society, including the energy sector, is therefore of paramount importance. Enel’s commitment to circularity and innovative approach to designing circular business models has led to the creation of its very own circularity KPI, the Economic CirculAbility©®.

Enel’s Economic CirculAbility©® KPI

While many industries and companies — like the retail sector in which only 18% of organizations have invested in circular economy initiatives — are failing to accelerate the transition to a circular economy, others are pioneering this movement.

Enel became the first company in the world to pledge to double its circularity by 2030 after presenting its Economic CirculAbility©® KPI  at the World Economic Forum in Davos earlier this year. The move is an important milestone and brave initiative that can play a significant role in achieving greater circularity in the energy sector. 

Economic CirculAbility©® measures Enel’s overall EBITDA (in euros) and compares it with the total amount of resources (in tons), including fuels and raw materials consumed throughout the value chain. By committing to its objective, the Group pledges to consume 50% less resources in relation to generated EBITDA.

Circularity as an economic boost 

The first principle of circularity is to eliminate waste and pollution through a model of production and consumption which involves sharing, reusing, repairing, refurbishing, and recycling existing materials for as long as possible. In other words, the life cycle of a product is extended, and waste is reduced to a minimum by keeping products and materials within the economy through reuse and recycling. The design of the product and the related use models in a circular perspective is the key enabling element to achieve all of this.

KPIs such as Enel’s Economic CirculAbility©® are crucial to drive the circular transition, build cohesion as well as show everyone the direction to follow and monitor progress, the Group hopes to inspire and recruit more businesses to adopt circular economy KPIs and set ambitious target.  

While the transition to a circular economy can help fix environmental and social challenges, it can also lead to opportunities and positive impacts for businesses. Research has shown that a circular economy could offer a $4.5 trillion economic opportunity by 2030 by reducing waste, stimulating innovation and creating employment. Furthermore, the circular economy by reducing the use of raw materials makes the business model more competitive and resilient by reducing the risks associated with the procurement of materials such as price increases and supply interruption risks.

Nonetheless, many of these economic benefits are long-term and require significant investment, as well as short-term incentives to drive change. This is where innovation can play a key role in designing new business models with circularity at their core. 

Enel Open Innovability® and the circular economy

Waste is not an element of nature; it is a product of industrialization and unsustainable consumption habits. From small, short-lived products like a packet of crisp, to permanent infrastructure like buildings and roads, our economy is filled with products that have been designed with waste built in them and without asking: What happens at the end of its life? 

Innovative and sustainable challenges launched by Enel Open Innovability® and initiatives like the Economic CirculAbility©® KPI are key to answering this question and make sure that we shift the design process of the products we introduce in our economy.