It is well established that the circular economy is the most effective and forward-looking response to the threat of climate change. Yet, paradoxically, it would be reductive to assume that its benefits are limited to the environmental sustainability front.
On the contrary, the circular economy is a model that is destined to influence every aspect for the progress of a healthy society. It represents a constant push towards technological innovation and digital transformation, because it revolutionizes industrial processes and drives new skill sets by perfecting the way in which we produce and consume. It brings together businesses, institutions, universities and citizens in a single movement that is capable of combining economic well-being with energy independence and employment with public health.
This vision clearly emerged from the speeches that enlivened the Innovation for Circularity event. The event was held on March 1st at the Ara Pacis in Rome and was a time for reflection. Moderated by journalist Gianni Riotta and organized by Enel along with the COTEC Foundation, it aimed to shed light on focus areas and instruments, but also on the challenges and issues which Italy and the rest of the world will need to pay attention to make the most out of all the opportunities the circular economy offers.
Many political, scientific and business leaders who share Enel’s commitment to Italy were involved in the debate, as since 2015, circularity has been one of our core corporate values and part of our philosophy regarding our vision for the future.
New supply chains with circular DNA
Sometimes we risk reducing the circular economy to a single subject: recycling waste. However, at its conceptual genesis, the circular economy has a much more ambitious goal: ensuring an increasingly efficient and sustainable use of resources throughout the entire production process.
It starts with the intelligent use of raw materials and goes on to the use of renewable energy sources and finally through the repurposing and extension of the life of equipment. It is therefore necessary to design supply chains capable of generating value at each step, even at the end of the cycle with the reclamation and reuse of waste and scrap.
This model is already being utilized successfully by our group thanks to the establishment of clear and measurable parameters. Through these, it is possible to analyze the entire value chain, identify increasingly high-performing instruments and solutions, and certify concrete results. This also includes rewarding supply chain companies that have invested the most in the transition to circularity.
The shift from fossil fuels to renewables is certainly the cornerstone of the circular economy. However, the road towards de-carbonization also requires a much-needed change in the design of supply chains, which underpin the production and development of clean energy.
“A concrete example is our Gigafactory in Catania. It is an ecosystem of innovation whose strength lies in photovoltaic panels which are more efficient but also easier to recycle thanks to the intelligent use of materials capable of reducing the wear and tear and maximizing the efficiency and at the same time ensuring that 95% of the panels can be recycled,” emphasized Michele Crisostomo, President of Enel. “We need to continue to build more supply chains that have circular DNA, to further our leadership as a company and as a country.”
Research, development and policy to support innovation
The circular economy reduces environmental costs and opens up new economic opportunities for the world of business. However, these goals are unthinkable without the appropriate industrial policies and the indispensable support of agencies and institutions.
Ami Appelbaum, Chief Scientist and Chairman of the Board of the Israeli Innovation Authority, knows this well. It is not by chance that Israel has been dubbed the “startup nation” in virtue of the massive investments its government has allocated to research and the development of increasingly innovative solutions in the field of circularity.
“Over the next five years, we plan to invest 1 billion dollars of public funding in the private sector”, said Ami Appelbaum during his remarks. “Even without talking about environmental protection, the circular economy presents an enormous opportunity for economic growth in the areas of energy, transportation, construction, agriculture and the food supply chain and water management. Even the political conflicts we are experiencing can be addressed with technology to demonstrate that the situation can be different. With innovation we will change the world.”
Investing in innovation to revitalize industry, both Italian and European, is also the hope of Adolfo Urso, Minister for Business and Made in Italy. He views the establishment of new alliances as the main way to consolidate the energy independence and the environmental sustainability of the Italian economy, especially in this phase of profound geopolitical instability. “Europe needs to turn to developing countries in Asia and Africa to establish new sources of raw materials. Within this strategy, due to geographical and cultural issues, Italy will be a decisive country for the future development of the entire European scene. Just as Sicily can become the Silicon Valley for the green economy and environmental technology, Italy can take a leadership role, especially in light of it assuming the G7 rotating presidency in 2024, a year that will prove decisive in increasing support for green industry.”
An Italy that innovates and renews itself
However, in order to be complete, this transition must rest on an all-encompassing strategy, which undoubtedly has innovation as the main factor for building Industry 4.0. As COTEC President Luigi Nicolais emphasized, this is an evolution in which large companies such as Enel play a fundamental role because of their ability to identify and implement wide-ranging projects that involve institutions, businesses, startups, universities and society as a whole. It is the best way, perhaps the only way, to move innovative concepts towards efficient systems with practical applications.
“The circular economy is a social revolution which starts from the top, from understanding that things can be done differently. It is a transition that involves everyone: small and big business, production facilities, the digital world and bureaucracy,” said Luigi Nicolais. “All of us, especially young people, have a huge challenge in front of us. We need to adapt to stay in the market, but most of all we need to place people at the center of industrial activity. We don’t just need technology, we also need quality of thought.”
Quality of thought, which must also become quality of work. This is the reason that today we launched a challenge in collaboration with COTEC, ENI, and Leonardo to find and reward the best innovation for safety in the workplace and place the physical and mental health of workers, employees and colleagues at the center of our business models.
A project that has the full support of Michele Crisostomo and our entire group. “People are at the center of a new industrial revolution which is also a humanist revolution,” commented the President of Enel. “It is the cultural factor that creates change, and we need to find new solutions for a culture that has radically changed: ideas that will be consistent with the ideas of our children and grandchildren 20 years from now.”
A concrete and shared commitment
Despite a general perception to the contrary, Italy is absolutely prepared for such a systematic change to production cycles. The circular economy is already producing great benefits that are often underestimated by the general public.
Symbola President, Ermete Realacci, is quick to point this out, and he proves his point by citing numbers that demonstrate how committed Italian businesses are to the environment. “Our businesses already recover around 80% of waste from production activities, which is 10% more than Germany and 30% more than the European average. This is also because a fundamental shift has taken place: there was a time when the interests of the environment seemed at odds with those of the economy. Today it is exactly the opposite. Those who do not choose the path of protecting the environment make businesses and the economy lose ground. Which is why with Enel, we continue to find and tell the stories of Italian excellence that distinguish themselves in the areas of innovation and the circular economy. The harder we look, the more exceptional things we find.”
The Italian business world is ready to adhere to this transformation with conviction. “The circular economy is not only a matter of environmental policy but also of industrial policy,” said Katia da Ros, Confindustria Vice President. “We have to build supply chains that are increasingly strong, resilient and competitive. The business models will change from linear models to circular and regenerative models, optimizing resources to the point of eliminating the environmental impact. This is a momentous challenge in which Europe and Italy have resolved to act decisively. It is a challenge that we want to win and for which we will do our part.”