When, after a long process, decision-makers set goals for an organization, a municipality, a company or even a country, it is easy to think the job is done. Because even though everyone knows that this is when the actual work begins. Doing what is necessary to change working methods, reshape organizations and get everyone to pull in a new direction can feel insurmountable.

“Our institutions often fail to go beyond setting the goals,” says Daniel Bengtsson, futurist and senior project manager in governance, policy and innovation at RISE. “Once they are set, it's up to each party to determine what they can do – or not do. If there are old ways of working that counteract the new goals, there is a high risk that they will never be reached.”

He describes how with today's societal systems it is difficult to seriously frame the question and attempt to get a realistic idea of how the future will be. Today's social models, based on the economic, technological and social processes and objectives of industrialism, therefore persist even if they are not optimal for achieving the goals politicians and companies have often decided to pursue.

“Organizations must have the ability to imagine new societies," says Daniel Bengtsson. “For example, how does a Sweden with net zero emissions look? In reality? Only when we can describe this can we see which steps need to be taken and, at least as importantly, which choices need to be made.”

Rapid changes to be met by slow-moving organizations

In addition to challenges relating to resources, the environment and climate, the public sector, as well as businesses, need to consider how things like a changing population pyramid, artificial intelligence or an evolving security situation will affect society. There rapid changes and new threats, which are to be met by organizations that today are often slow-moving and difficult to adapt.

Bengtsson points to the work being done both in the public sector and in many industries, with roadmaps for achieving set goals. This is the right approach, he says, but often it needs to be better operationalized.

“When RISE is allowed to contribute in the change processes of cities, governing authorities or sometimes companies, we start by examining needs, conditions and strategic challenges in both the short and longer term based on goals and plans,” says Daniel Bengtsson. “Based on this, we provide suggestions on which changes are needed in the organization, and can tailor a support solution. We're seeing that working with as us an independent and third-party entity is valuable. We become a sounding board for various mature ideas for change, and can serve as the spider in the web between different parts of the organization when the employees are in a learning and development phase, as well as in collaboration with other parties.”

Proactive governance provides opportunities for long-term perspective

Daniel Bengtsson describes how steering and governance have often been overlooked, or been something that has been referred to projects. RISE's engagement is instead intended to create permanent new capacities at the organizations they work with. When many changes occur faster than before, proactive governance, or foresight, can provide opportunities to still work with a long-term approach to achieve the established goals.

“One example is our work with the City of Malmö,” says Daniel Bengtsson. “They have a roadmap that really takes a holistic approach to achieving the climate goals. We support planning and implementation. We discuss how and conduct instruction in the organization, see how tools can be used and are involved in coaching, consultation, project management and of course, research. Yet we never leave Malmö's organization. That's where change should happen, and that's where we work.”

Within Governance Innovation Sweden, RISE works with like-minded people to raise awareness of how organizations can change to achieve common goals.

“Sweden has had a lot of focus on technological innovation, and this has made us prominent in this field. But it is policy, regulations and behaviour that determine how we can apply technological innovations. There we can do a lot to attain more self-organized and self-learning structures, with collaboration that is not limited by organizational affiliation or even the goals of one's own organization in a narrower sense. If we are to solve the common social goals, new forms of organization are needed that truly create better conditions for change,” concludes Daniel Bengtsson.

Concepts such as recycling, recycled materials and sustainability have been with us for decades. But with the substantial challenges of the climate crisis, the concepts have become increasingly important – we must find ways to live in our world in a much more conservation-minded manner with sharply reduced climate footprints, and we must be better at managing raw materials by using renewable materials, reusing more of what we produce and managing our waste.

When adopting these concepts in an enterprise, the key often lies in a strategy that is based more on circularity. While the traditional linear economy is based on maximising production, assuming an infinite supply of raw materials and an equally limitless opportunity for the globe to deal with all the generated waste, the circular economy is in many ways the opposite.

Raises questions and entails challenges

But taking the step towards a circular business model in whole or in part raises many questions and entails several challenges. Because it's not just about managing resources and being renewable – companies also need to maintain profitability and know that customers are willing to pay for what they offer.

– “When it comes to the uncertainty about the willingness to pay, we see a major challenge,” says Agnieszka Hunka, senior researcher at RISE. “If customers were to embrace a product or service; how much could they imagine paying? Will customers perceive the circular product as lower quality, and could a circular product make use of the company's existing product line? These are important questions to consider in a circular transition.”

Turn the process upside down

With broad knowledge that spans widely different industries and with several completed research projects, RISE helps companies find their way towards circular business models. Companies often need to fundamentally change their mindset – not just make a chair, for example, sell it and forget about it.

– “You have to turn the whole process upside down,” Agnieszka Hunka explains. “A lot is about looking at their assortment and trying to identify how much could be reused or sold in another way.”

Reconsidering both the business model and how the company's products are manufactured can be complex. Here, both opportunities and challenges can arise. This can be, for example, offering services that extend the life of a company's products, or a return program to take back products that are no longer used. But it can subsequently bring challenges; for example, introducing a return program requires looking at logistics.”

Long-term perspective requires keeping track of the regulations

If you want to take a more long-term approach with your products, you also need to relate to the current regulations, something that can easily becomes a balancing act. Agnieszka Hunka gives an example of this with a project in which RISE is trying to find the middle ground between the goal of becoming circular and the fact that the rules regarding chemicals are constantly changing and substances are being banned or phased out.

– “If you want to work long-term with circular products, there is naturally a major risk of encapsulating these substances in your circular cycles,” says Agnieszka Hunka.

Knowledge and research guide and predict

RISE's first step in a collaboration is always to discuss which product or service a company offers at present. Or what it would want to offer. As many of the products or services are often not yet on the market, RISE's many years of expertise in circular business models can help business leaders to take action based on the right grounds.

– “In those cases, you cannot rely on historical sales statistics from an already existing product,” says Agnieszka Hunka. “Our knowledge and research help companies predict how well their idea would sell and work in practice.”

Among other things, RISE helps companies define which important properties the products need to have. Furthermore, an analysis is made to determine an optimal price and to determine whether the product could work alongside what the competitors may already have on the market.

It is often a matter of taking an in-depth look at customers' behaviour and examining which details are crucial. For example, which properties customers are willing to compromise on for a potentially lower price and which properties would they never compromise on – regardless of price. The results can be completely different from what might have been expected.

– “In a previous project, for example, we looked at how willing people are to pay for a used mobile phone – and we were surprised,” says Agnieszka Hunka. “It turned out that people actually don’t care what was inside the phone, as long as it looks new on the outside and has a new battery. Whether a computer chip was recycled didn’t matter to them.”

Less sensitive supply chains

This sheds light on another advantage of a more circular business model, in addition to contributing to a more sustainable society. The corona pandemic has shown how fragile our supply chains are – something that could be reduced with a circular business model.

– “It’s probably become very obvious to everyone who, for example, has tried to buy a product with a computer chip during the pandemic. I'm not saying that circular economy is the obvious solution, but it would potentially be a way to make companies a little more independent.”

Here, however, Agnieszka Hunka points to another challenge. At present, it is difficult to reuse computer chips due to how they are integrated with the products.

– “Because of this, it’s important to consider circularity while still at the design stage.”

Another financial challenge with a transition is which investments the transition can entail, if, for example, you want to offer products as a service instead of selling them.

– “The company then retains the products and thereby the responsibility for them as well,” Agnieszka Hunka explains. “The company is even responsible for the initial investment in the products, which means that the investment is larger in relation to how much longer a company has to wait to get their money back. So more capital is needed from the beginning.”

Businesses are leading development

On the other hand, most people agree that a more circular economy is a prerequisite for creating a sustainable society. And often it is precisely the companies that are taking the lead as we move into the future.

– “My experience from companies and municipalities is that many often call for political direction as to where we should go. But in the end, it is the companies, not infrequently the small companies, that make things happen and lead development,” concludes Agnieszka Hunka.

There are a number of different labels for products in the marketplace. Despite this, there is one area where the consumer often gropes blindly – namely product service life and how this generally affects the environment. At the same time, it is often difficult for companies that have invested in developing products with long service lives to reach out with this information in a credible manner.

Marking originated out of frustration

RISE now wants to facilitate and quality assure communications between companies and consumers by developing a certification and labelling concept called LAST, where the four letters stand for Long-life design, Accessible spare parts, Sustainable materials and Transparency. 

– “It has sprung from a frustration that I think all of us consumers can relate to. You have a product that works and then something small breaks and the entire function is lost even though it should be possible to fix quite easily,” says RISE project manager Karolina Vikingsson, and provides as examples products with non-replaceable batteries or products for which no spare parts are available. 

With the LAST certification, consumers can see if a product has a long service life, and whether the manufacturer has taken responsibility for it in various ways.

– “It’s based on the manufacturer in some way stating how long a product will last, and then making sure that it does so, either because it doesn’t break in the first place or because it’s, for example, easy to repair and upgrade,” says Raul Carlsson.

The products that attain certification are marked with a QR code where the consumer can easily get information about, for example, care, spare parts and content. With the QR code, service to customers can be improved and the idea is that it will also provide important information to those who repair, remanufacture or recycle the products.  

– “Everyone expects a more digital relationship with customers and distribution chains. As an example, much of the software in products is already built for this,” says Raul Carlsson. 

Focus on longevity – while maintaining sustainability requirements

LAST certification is not intended to replace current markings and other certifications. Instead, RISE wants to develop a certification that utilises existing standards and requirements, but which overall requires more. 

– “LAST focuses on longevity but not at the expense of other important sustainability requirements,” says Karolina Vikingsson. 

The hope is that LAST will provide guidance to consumers and give companies that invest in products with a long service life an opportunity to stand out. 

– “Many companies work hard to put solid products on the market; they want their products to last and they want to be responsible. LOAD can be a way for them to be able to show this,” says Karolina Vikingsson. 

Developed in collaboration with the business community

RISE is developing the concept together with the International Environmental Institute at Lund University and six companies with global brands in various product segments. Companies have shown active interest in circularity and contributed knowledge about their products and their value chains. The participating companies include Nudie Jeans, Moccamaster Nordic, Tarkett, Husqvarna and Zound Industries.

– “At Zound, we’re seeing rapidly growing interest from consumers and other stakeholders for repair, reuse and recycling,” says Anna Forsgren, sustainability specialist at Zound Industries. “We must act on this to ensure a sustainable future and to tackle the fundamental problems of today's linear business operations. Standardisation of how to measure service life in products is an important next step.” 

The partner companies do not set the level of certification, but instead provide RISE with information about products, conditions and processes. 

– “It’s not good for us making demands that no one can meet. But we want to tighten the requirements in step with development” says Raul Carlsson.

Defines product life

Much of the work is now about defining the lifespan of different product types, such as coffee brewers, speakers, clothing and flooring. In the process, both the strengths and weaknesses of individual products are identified.

– “We hope that the measures we’re already taking can be recognised and that we can see more clearly the areas in which we need to improve,” says Sandya Lang, head of sustainability at Nudie Jeans. “We believe that a concept such as Certified to LAST can set the standard in many industries in the future for a circular economy.”

More partners welcome

Companies and others who are interested or want to contribute to the work with Certified to LAST are encouraged to get in touch.

– “In addition, RISE already offers a number of methods, approaches and measurement tools that can help companies give their products longer service lives,” says Raul Carlsson. 

Much of what RISE works with is about supporting companies and others in society in the transition from linear to circular.

– “We need a change in our behaviour in relation to materials, products and resources in order to take us towards increased climate conservation,” concludes Raul Carlsson. 

– “Work with sustainability and circularity means that we will be able to have completely different and long-awaited control over what we buy in the public sector, from whom and how it affects the environment and people. The demands on everyone that directly or indirectly delivers to the public sector will increase. Public sector stakeholders will conduct risk analyses, increase control of subcontractors, and demand a completely different type of control than today of the entire supply chain. The requirements we set based on the Global Compact principles alone mean that suppliers must keep track of their entire subcontracting chain to show that they live up to the set requirements. In addition, with new technology, such as blockchain technology, control can often be carried out easily and cost-effectively.”

This is explained by Eva-Lotta Löwstedt Lundell. She has been active in the debate on public procurement for many years, has written a book on the subject and is now the CEO of Adda, a company within the Swedish Association of Local Authorities and Regions that supports the public sector with, among other things, procurements and framework agreements.

SEK 900 billion

Public procurement accounts for 18 percent of Sweden's GDP, a nearly unimaginable SEK 900 billion a year. This entailss that procurement is of great importance for Sweden's climate impact. In 2019, public procurement accounted for 24 million tonnes of carbon dioxide, according to the National Agency for Public Procurement estimate. This is a quarter of the climate impact from all Swedish consumption.

– “This means that there is a large part of the solution here,” says Eva-Lotta Löwstedt Lundell. “With new requirements for sustainability in public procurement, this can change. But it is not the demands themselves that change the reality of the situation. They can put the spotlight on issues, but if it only leads to us continuing to buy the same products according to new requirements specifications, not much has been gained.

– “This is where circular thinking comes in. It's not just about what we buy, but also why. We need to think about whether we’re utilising our assets correctly, receiving the services we pay for, can ensure that the products live up to the requirements we set, and – above all – we need to change our buying patterns.”

From “how” to “if”

She takes up the example of furniture procurement. Perhaps the question is not how the next procurement should be made, but if it should be made at all. Maybe the furniture is already in the organisation? Is it possible to instead procure a service for enabling furniture to circulate in a better way? Or can we even design public premises in a way that reduces the need for new furniture?

– “It’s about understanding the value chains on several levels. How should we utilise resources in our operations in a climate-smart way? How do we reduce overall resource extraction from the environment? We’ve often been quite good at raising the bar and setting higher demands. But now it's about gaining a completely different overview of everything we consume and, of course, making sure that the suppliers live up to the requirements we set.”

Dependent on the business community

Eva-Lotta Löwstedt Lundell emphasises the considerable importance of the business community for the public sector being able to carry out its societal mission. Each social service is based on a connection with companies that deliver the products the mission requires.

– “We haven’t yet completed the map for understanding which deliveries are absolutely crucial for us in fulfilling our mission. If the pandemic has taught us anything, it is that we have not sufficiently analysed risks and dependencies. We still don’t have that, and that needs to change! It requires that we work together. Not everyone can be at the forefront of everything, but through us and RISE – as well as through other forms of collaborations – the public sector can draw on one another’s experiences. Even small municipalities with only limited procurement capabilities should be able to set the right requirements, obtain data to check the requirements and keep track of their procurements. But of course, this requires collaboration.”

Eva-Lotta Löwstedt Lundell emphasises that a contracting organisation needs to know the market in which it is to procure.

– “You can’t just say that products are to be recycled if, for example, they don’t comply with the functional and quality requirements we have in our operations. The requirements must be possible for the market to live up to, and they must be able to be scaled up so that we attain long-term functioning business models. At the same time, we have to use procurement to drive market change. Many need to change how they utilise resources and business models. Some will cope with this transformation quickly, others will not cope with it at all. Those who cannot respond to the needs and requirements will have to make room for new players.”