Blog: Behaviour change towards a circular economy - Part 1

At its core, the Circular Economy requires that as a society we are able to change our behaviour around how we source, create, use and dispose of the plethora of products that surround our lives. Marc Atherton explores how we can achieve this.

'Progress is impossible without change, and those who cannot change their minds can change nothing' George Bernard Shaw

The Circular Economy is a paradigm shift in how we as a society view the production and consumption of goods and services. It is more than a commitment to recycling products at the end of their lives; it is a fundamental shift in the way we think about the creation of products. The Circular Economy integrates sustainability from sourcing raw materials through design and manufacture to end-of-life re-use as part of the input to the next generation of products.

At its core, the Circular Economy requires that as a society we are able to change our minds and our behaviour about how we source, create, use and dispose of the plethora of products that surround our lives. The power of behaviour change, particularly at the individual citizen and consumer level in a modern society, is evidenced by the work of the UK Behavioural Insights Team (ex Cabinet Office 'Nudge' unit) in deploying Behavioural Science techniques to policy implementation (see the recent talk by David Halpern at the RSA)

The RSA Great Recovery project has looked to designers and manufacturers to develop a mindset which takes a holistic approach to creating products and minimizes resource consumption.

At a simple level the circular economy has three key stakeholder groups; Producers, Consumers and Government.

The issues for the Producers relate to their shareholder imperatives and much work has been done in this macroeconomic area to show the financial benefits that the circular economy has for business by organisations such as the Ellen MacArthur Foundation. The RSA has also led the way in terms of fostering the idea of the circular economy in the design community and broader society.

For the Government leg of the triad initiatives such as the European Commission circular economy Strategy and the UK Government view have framed the issue from a policy and strategy perspective, though much still remains to be done in terms of leadership and legislation.

This article focuses specifically on the third leg of the triad, the consumer, and poses a number of issues for engaging with the consumer to create a 'pull' factor towards the circular economy in order to balance and support the other two dimensions.

Pull, not Push

In a democracy there are different actions that consumers can take to send signals to both the producers and the government as to the form of economy they wish to live with. The three forms of actions are:

1. Direct consumption decisions in terms of purchasing products which are part of the circular economy.
2. Medium term influencing of the political process to support and create a circular economy.
3. Longer term decisions in pension fund choice and investments that support the circular economy.

What this might mean at a practical level is that consumers would preferentially use their:

1. Purchasing Power to buy products that accord with a circular economy (for instance leased Mud Jeans or remanufactured Rype Office furniture).
2. Political Power to lobby MPs, establish social media pressure groups, ensure local government purchasing is compliant with CE and deliver CE-aligned voting behaviour.
3. Investment Power to ensure that financial managers invest money and pension funds in companies that are moving towards a circular economy.

To achieve these three consumer actions in creating a circular economy it will be necessary to change the behaviour of consumers. Given that in a democracy 'pushing' people can be harder than engaging them and creating a cultural shift in which change happens, I would argue that this latter route offers a more permanent approach.

Even the World Bank acknowledges sticky behaviours

What the past has taught us however, and what recent developments in behavioural economics and behavioural finance have provided the evidence for, is that people are not rational, that behaviour is 'sticky', that we do not always act in our best interests and that culture (the way things are and are done around here) often constrains the choices we make as individuals and a society. To see the paucity of the rational approach to behaviour change in extremis, the solution put forward by Nancy Reagan to the illegal drugs problem in the USA – 'just say NO' – clearly did not engage with the general population. An awareness and education policy, much beloved of governments, will not in all likelihood achieve the behaviour change needed to provide consumer-led support for a circular economy.

To see how far the recognition of the role of behavioural science in creating change has gone one needs look no further than the World Bank. This year, their flagship annual World Development Report launched by President Jim Yong Kim , was called Mind, Society and Behaviour. Its theme was the application of behavioural science to international development policy, and itprovides a framework to help development practitioners and governments apply insights from the behavioural sciences to development policy. Its argument is that:

'Interventions need to take into account the specific psychological and social influences that guide decision making and behaviour in a particular setting. That means that the process of designing and implementing effective interventions needs to become a more iterative process of discovery, learning, and adaptation.'

In support of this argument both the UK Government and the European Commission have recognised the need to include a behavioural sciences perspective in their approach to policy implementation. Given which, the role of behavioural science in engaging and motivating consumers to promote and support the circular economy has an a priori validity, andI believe we need an approach which includes a philosophy of how might we begin to create change at the individual and cultural level.

Values, Attitudes, Beliefs and Behaviours

One way is to think of each individual as a nexus of Values, Attitudes, Beliefs and Behaviours (VABBs). People will change when they can see a good reason to, and feel the relevance of the change, andin dealing with large scale change it is often the behavioural route that is most effective.

Changing behaviour can be a spur to changing attitudes (if we act we will justify our new behaviour to maintain our self-image) as much as changing attitudes can result in changes in behaviour. As attitudes change, so can Values and Beliefs. Behaviour is a more tractable approach as it is simpler to define, see and measure behaviour change than it is to change the other components of the VABB nexus. Implicit in this however is that a change in behaviour needs to align with the values, attitudes and beliefs of people if it is to have any lasting effect.

Change at this level needs to traverse five fundamental stages:

1. Awareness – know a challenge exists
2. Acceptance – understand the premises and issues
3. Ability – have a capability to act on the challenge
4. Action – do achievable and meaningful actions
5. Assessment – get feedback that the positive change is happening

The issue of how we shift the consumption model centre of gravity of the individual and culture to embrace the concept of the circular economy is a key element in achieving change.

The circular economy is distant, diffuse and delayed

One challenge for the circular economy is that it is diffuse, distant and delayed for the average consumer particularly in the 'developed world'. It is diffuse in that it is unclear to many people specifically what it is and what it means; distant in that the raw materials extraction and landfill sites are not directly visible and delayed in that achieving it is not likely to have any immediately visible impact in the short term. In many ways the challenge is the same as that faced in addressing climate change.

There is however a key difference. climate change has the advantage of being based on sound physics and scientific evidence. The circular economy is based on an ideology backed by some posited social, environmental and economic benefits. In this case changing minds, and changing behaviour, can be seen to be more challenging. With climate change iconic images of destitute human children or polar bear cubs with no snow can create an emotional response which can bypass or reinforce rational analysis. But where are the equivalent circular economy triggers? Without a shift in consumer VABBs around the circular economy are we left only with the Government and Producer stakeholders as the route to change without necessarily engaging broader society influence groups?

We must take a more human perspective

Lord Lawson, interviewed on the Breakfast Show on Radio 4 on 20 July 2015, said something that resonated with me:

'there have been....changes in technology but not in human nature'.

The centre of the argument put forward in this piece is that creating and sustaining change in behaviour at the individual and the cultural level is an essential part of realising the circular economy. It is with human nature - people that we must also work to create the circular economy, as well as corporate and governmental strategy and policy initiatives.

Findings in Behavioural Economics have shown that human nature is irrational in a purely economic sense. People are more strongly wedded to current situations through the Endowment Effect and Status Quo bias than is economically reasonable. Loss Aversion makes potential losses twice as emotionally relevant as identical gains, and Hyperbolic Discounting makes the future much less salient than the present even where the future may be better than now. If Behavioural Economics has taught us anything it is that one sure way to fail in achieving change is to rely on rational-actor economic justifications and policies for creating enduring change.

In theory legislation could be used to mandate and create the circular economy. Within a democratic society the political process may well make this difficult to achieve, but it certainly has a role to play. The premise in this article is focused on bottom-up change from the human perspective.

Read part 2 of this blog here.