Xavier Sarras on Changing Earth’s Status Quo

Xavier Sarras, Founding Partner 4P Capital, Purpose VC Investor, and Experience Economy Expert, believes better business models are needed to change the current predicament we find ourselves in. In fact, going circular should be an incentive for all in top management

by Natascha Zeljko | Jun 13, 2023

1. Why does this topic have to be on the agenda of every company? Or to put it another way: Why is it worthwhile?

In our current economy, we take materials from the Earth, make products from them, and eventually throw them away as waste – the process is linear. In a Circular Economy, by contrast, we stop waste being produced in the first place.

We must transform every element of our take-make-waste system: how we manage resources, how we make and use products, and what we do with the materials afterwards. Only then can we create a thriving Circular Economy that can benefit everyone within the limits of our planet.

“Creating a circular economy is the business opportunity of our time.”

Creating a circular economy is the business opportunity of our time. It strengthens local economies in a socially inclusive way, the repairing and leasing economy creating far more jobs than taking the traditional linear approach to waste. Enhancing circularity is an efficient lever to help society reach net-zero and, by bringing our economy more into line with the Earth’s boundaries, it is also clearly nature-positive.

Inspired by the Ellen MacArthur Foundation

2. What are the biggest challenges?

  1. The horror of disrupting consumer’s convenience.
  2. Local regulations versus the Circular Economy concept.
  3. Lack of infrastructure for waste treatment.
  4. Lack of recycling technology.
  5. Poor business model plan.

Cultural barriers, particularly a lack of consumer interest and awareness as well as a hesitant company culture, are considered the main Circular Economy barriers by businesses and policy-makers.

3. How would you convince people who are still critical towards the topic?

By 2050, we need 3x the planet if we maintain the status quo.

4. A thought-leader, book or podcast you would recommend?

Anything from the Ellen MacArthur Foundation.

5. What are the key requirements for the Circular Economy to succeed and eventually become standard?

In order to create a sustainable circular economic model, a value chain must be created by adopting a digitally equipped process aligned with a better business model. As the prime focus is on using materials for as long as possible, more innovation is needed, including business model innovation.

We need the CEO or the CTO, the transformation officer, to be fully supportive and maybe even lead or be part of the steering committee of initiatives that will be launched on the theme of the Circular Economy. If you leave it to the sustainability function, you really take the risk of adding yet another sustainability initiative, as opposed to making it the real source of competitive advantage and business continuity. It should be part of the incentives of the top management to go circular.