The world is changing, with purpose taking centre stage in transitions to the Circular Economy. In this article, find resources, a webinar replay, and a case study from Volkswagen.
The world is changing.
40% of Millennials and Gen Z believe that the purpose of business should be to improve society. Larry Fink, CEO of the world’s largest asset management firm Blackrock, wrote to their investee companies calling for a focus on purpose—a company’s fundamental reason for being—as the path to long-term value creation. The CEO of Unilever, Alan Jope, spoke at the World Economic Forum in 2019 saying “companies with purpose last, brands with purpose grow, and people with purpose thrive.”
How can we change?
Purpose + The Circular Economy: A Webinar.
The Moment and The Danish Design Centre joined forces in November 2019 to host a joint webinar on Purpose and the Circular Economy. Based on the sold out workshop at the 2019 Service Design Global Conference, this webinar focuses on explaining principles driving the Circular Economy, and how organizations can leverage different tools to start to make new transitions.
The webinar features Mark Kuznicki, Innovation Design at The Moment, and Christian Bason, CEO of the Danish Design Centre. Together, they outline the Circular Economy, the major trends shaping this new reality, and how you can start to bring this thinking back to your organization to make real change.
Volkswagen: A Circular Economy Case Study.
You’ll also get to learn about Volkswagen’s global journey in applying these new Circular Economy principles, using the “Flourishing Business Canvas” and other transition opportunities as they seek to reimagine what’s possible.
Global and local movements have resulted in a renewed definition for the purpose of the corporation and a new public license and mandate for all corporations to move towards multi-stakeholder and environmental benefit alongside shareholder value in corporate governance. So what happened with Volkswagen?
In September 2015, the US EPA issued Volkswagen a notice of violation of the Clean Air Act. So began the so-called “Dieselgate” scandal, wherein Vokswagen was caught using software workarounds to cheat emissions tests of many of its Diesel motors used in VW, Audi, Porsche and other brands. Its stock price fell ⅓ in the days following. Investigations were launched in multiple countries. CEO Martin Winterkorn resigned, leaders of the research and development organizations were suspended, and a number of executives faced criminal prosecution. A study estimated that 59 premature deaths were caused by the existence of the defeat device in vehicles sold in the United States between 2008 and 2015. Institutional investors sued the company for its lack of disclosure and for its executive compensation and governance practices.
These were dark days for the world’s largest automaker, with impacts felt far beyond the United States and triggering scrutiny of other automakers’ emissions testing practices around the world. The impact to the Volkswagen brand is hard to calculate—trust had been broken, and it would take years and much focused investment to rebuild it.
Volkswagen agreed to spend billions to correct the problem through refits and repurchases of affected vehicles. In addition, a US judge enforced a US$2.8 billion criminal fine on the company. As part of the overall settlement, Volkswagen agreed to spend US$2 billion for clean-emissions infrastructure in the form of a network of electric vehicle charging stations. As of 2019, the total cost of the scandal has totalled EUR 30 billion.
Currently electric vehicles make up only 0.32% of total vehicles Volkswagen produced in 2018.
In response to the Diesel scandal, Volkswagen has undertaken an ambitious transformation – technically, culturally, and in its business model. As part of its new strategy “Together—Strategy 2025”, it has committed to become a role model for environment, safety, and integrity in pursuit of sustainable growth.
As part of this strategy, Volkswagen wants to transform its core business while shift from being defined as a vehicle manufacturer towards a “sustainable mobility solutions” provider. A number of key priorities have been identified:
- Develop battery technology as a new core competency
- Develop self-driving systems for autonomous vehicles
- Develop best-in-class user experience across brands and customer touchpoints
- Establish a mobility solutions business
- Develop and expand attractive and profitable smart mobility offering
- Drive digital transformation built on a single Volkswagen Cloud platform
- Create “Organization 4.0” to make the organization fit for the future: adaptable, entrepreneurial, and agile, operating within a culture of integrity
It’s nonfinancial sustainability report outlines the scale of the transformation required. This reporting, in compliance with German law and international standards such as GRI, SDGs, and ESG, applies a multi-stakeholder lens to goals, measurement, activities, and risk. Volkswagen Group is a major employer in Germany, Europe, and beyond with a strong tradition around including employee representatives in its governance structures. This is part of a long-standing “social contract” and “social license” within the German industrial framework.
Stakeholders in the Circular Economy.
So who is Volkswagen designing for, and who should you be considering in your transitions to the Circular Economy? Here is a starting point of stakeholders to consider:
- Employees (existing and prospective)
- Business partners
- Investors and analysts
- Politics and associations
- NGOs/charitable organizations
- Researchers and experts
- Residents and local authorities
The Circular Economy Webinar.
There’s more to learn than just Volkswagen. Hear about Purpose + Circular Economies, and then see how they are being applied. Use this knowledge to identify transition opportunities for your own organization, and bring back new thinking.
From this webinar, you’ll be able to:
- Understand the global trends calling for change
- Understand emerging trends in purpose-led organization design
- Learn about Circular Economy principles and the “Flourishing Business Canvas” strategic design tool
- Hear about Volkswagen and how they are transitioning
- Feel more confident speaking to purpose and the circular economy in a business context
- Be motivated to take action and open up conversations around transition opportunities
It starts with you.
Based on the sold out workshop at the 2019 Service Design Global Conference in Toronto, Canada with new information and discussion topics.
Watch the webinar on demand as we share inspiration and help set the foundations for bringing this thinking back to your organization. The world is changing… is your organization keeping up?
Resources to learn more about the Circular Economy.
Still looking for more information? As we researched and prepared for the Service Design Global Conference workshop and the subsequent webinar, we came across many interesting resources. In the spirit of sharing knowledge, here are some links you may find useful when learning more about Purpose + The Circular Economy.
Reports & Information on the Circular Economy
- 2019 Edelman Trust Barometer
- The Circular Design Guide
- Global Goals for Sustainable Development: Responsible Consumption and Production
- The Ellen MacArthur Foundation: on a mission to accelerate the transition to a circular economy
- Strategic Intelligence on the Circular Economy from the World Economic Forum
- The Danish Design centre on Circular Construction
Circular Economy + Purpose in the Media
- Consultancy UK: Business must value purpose over profit
- Inc: Why Purpose leads to profits
- Unilever: Brands must put purpose over profit
- Video: Alan Jope, CEO of Unilever, on Purpose and the Role of Business
- Bloomberg: Growth of global sustainable investments
- World Economic Forum: Young people are motivated by purpose over profit
International Organizations Supporting Circular Economy Principles:
- International Indigenous Design Charter
- United Nations Global Compact
- Circular Economy Leadership Coalition
Still have questions? Don’t forget, you can watch the webinar on demand here, or book some time to talk about transition opportunities for your organization. Here’s to a more circular future.