R2: Renew

How can we turbocharge the shift in behavior towards reuse and recycling?

We are a thesis-driven firm guided by our four investment pillars, all of which are built around the idea of using behavior change to fight the climate crisis. We call these pillars the 4 Rs: Review, Renew, Rethink, and Rebuild. Each pillar represents an area in which we believe large-scale behavior change is most needed in averting the climate crisis — and so we’re dedicating a blog post series to explaining the thinking behind each of the 4 Rs and how they guide our investments.

The first R we’re going to talk about is R2, or Renew: How can we turbocharge the shift in behavior towards reuse and recycling? In other words, how do we shift from a degenerative, linear model of consumption to a more regenerative circular one?

The problem with how we consume

Fossil fuel use has skyrocketed over the past few decades driven by sharply rising consumption. Our consumption habits are driven by multiple factors — social norms, mimetic desire, and increasingly sophisticated and targeted advertising, to name a few. We own more things than we know what to do with: the average American household contains 300,000 items.

Source: Our World In Data

In a society predicated on economic growth and a linear model of consumption, the status quo of “take-make-waste” depletes energy and natural resources, emits greenhouse gases, and generates over 2 billion tonnes of waste annually. This number is expected to increase to 3.4 billion tonnes by 2050.

This level of overconsumption is simply unsustainable. Producing material goods requires immense quantities of energy and raw material — 45% of global GHG emissions are directly linked to the production of goods and management of land. Across its life cycle, the average product results in carbon emissions of 6.3 times its own weight. And once a material lands in a landfill, only an extremely small portion of the energy used to make the material can be recovered through landfill gas capture.

The case for consuming less

There’s a plethora of emerging technological innovations that seem to be a remedy to the problem of overconsumption: carbon capture technology, plastic-eating bacteria, and other deep-tech solutions. They seem relatively promising — but technological innovations alone are not enough to deliver action at the speed and scale required to avert climate disaster.

An absolute reduction in production and consumption is required to mitigate climate change, conserve natural resources, and reduce the waste we generate. This involves reducing market needs altogether, particularly the vast quantities of consumer goods that don’t contribute to well-being. It also involves using existing materials to fulfill market needs by extending the lifecycle of existing goods and repurposing component materials into new goods, without the need for virgin resources.

Creating a circular economy requires changes in production and consumption behavior and, ultimately, change at the systems level. This is no easy task — it will require the cooperation of and contributions from governments, corporations, financial institutions, research institutions, and the general public. But this transition needs to happen now and at scale, and we believe corporations can help kickstart the requisite large-scale shift in behavior.

That’s where R2 comes in. To build a viable circular economy, it is crucial to make the reduction of consumption and the recycling and reuse of existing goods an exciting proposition for businesses and consumers. We believe that the companies in our R2 portfolio are helping to turbocharge the shift in behavior towards reduced, circular, and more mindful consumption.

So how can companies enable a reduction in consumption?

Companies hold lots of potential in shifting customer behavior, and this includes adopting alternative modes of consumption and production. Sectors that we find promising include resale and recommerce, refurbishment and repair, upcycling, recycling and waste technology. Companies in these sectors enable consumers to opt out of take-make-waste and choose to consume in less environmentally impactful ways — and to scale back on consumption entirely.

Companies like Topanga provide software that powers large-scale packaging reuse programs, reducing and potentially eliminating the need for new packaging. At the time of writing, the university reuse programs that Topanga supports prevent 1 million single-use containers from heading to landfill every semester.

Other companies like Lucky Sweater expand access to second-hand clothing and provide a platform for peer-to-peer trading and swapping, shifting demand away from environmentally destructive fast fashion to slow fashion, vintage and reworked pieces.

Linear vs circular economy

Source: US Chamber of Commerce Foundation

There are many other possibilities. Companies that focus on purposeful disassembly of consumer goods, for example, enable damaged or faulty parts to be replaced or repaired without having to replace the whole product. This could significantly extend product lifespans. Rental platforms also drive down demand for brand-new products that people use rarely or only once.

Conclusion

Transitioning from a linear to a circular economy is a massive effort, but with all hands on deck, it’s something that definitely can happen — it has to. And we have reason to be optimistic: innovative companies can, and already are, accelerating this much-needed, large-scale shift in behavior.