Profitability and Sustainability Co-Exist in the Circular Economy

Human beings use 92.8 billion tons of minerals, fossil fuels, metals, and biomass each year, and only nine percent gets reused.

It’s a problem that’s also getting worse, according to Circle Economy, a global organization dedicated to the creation of practical and scalable sustainability solutions around creating a circular economy in which everything we consume gets repurposed and reused.

Last year, the global demand for resources was 1.7 times more than what the Earth can support, and at current rates we’d need two Earths to support consumption needs by 2030. Other statistics paint a similarly bleak picture:

  • By 2050, there will be more plastic than fish in the ocean (World Economic Forum 2016)
  • Consumption of natural resources rose at twice the rate of population growth in the 20th century (UNEP IRP 2017)
  • Pollution contributed to more than 9 million premature deaths in 2015, 16 percent of all deaths worldwide (The Lancet 2017)
  • The world produced 45 million tons of electronic waste alone in 2016 (United Nations, ITU, and ISWA) with an estimated value of €55 billion in raw materials*

To bring attention — and action — to the issue, the United Nations created a list of Sustainable Development Goals to work toward by 2030.

SAP is teaming with Google Cloud to spur innovation around Goal 12 on that list: to ensure sustainable consumption and production patterns. The two companies are hosting a new Circular Economy 2030 competition that seeks to attract and reward social entrepreneurs who create innovative solutions on how to reuse, recycle, and repurpose.

The contest, which has a March 17 deadline to submit applications, seeks proposals for a revenue-generating idea that uses both Google Cloud and SAP solutions to advance a circular economy. Five finalists will be selected and announced at the Google Cloud Next Conference, taking place April 9 to 11. Finalists will be invited to participate in an in-person hackathon to be held April 12 in San Francisco for the chance to win over $100,000 in prize money and benefits, participation in Google Cloud for Startups’ Bootcamp, plus one-on-one mentorship. The remaining four finalists will each receive $25,000 in prize money. The grand prize winner will be announced at the SAPPHIRE NOW conference on May 7.

Economic Growth Through Purpose-Led Business

One impetus for the contest is to demonstrate that sustainability and profitability do not have to be mutually exclusive concepts, that you can create economic value and contribute to a more environmentally friendly planet at the same time. In fact, the circular economy could unlock $4.5 trillion in economic growth, according to Accenture.

“The circular economy is about creating economic prosperity with social well-being as a key component of that output,” said Alicia Tillman, chief marketing officer of SAP. “The UN’s Sustainable Development Goals are the single best framework for creating social, economic, and environmental change in the world. When we can have a benchmark to work toward, it allows us to collaborate, drive impact, and have success.”

“In this case, we have two fantastic brands — SAP and Google — working toward a common purpose,” Tillman added. “We are already receiving lots of applications with great ideas on how to leverage technology, including artificial intelligence and IoT, to create more sustainable processes that reduce our consumption and make the world a better place to live.”

The Circular Economy 2030 contest is just one of many initiatives SAP is undertaking to reduce consumption and increase reuse of resources, according to Adaire Fox-Martin, member of the Executive Board of SAP SE, Global Customer Operations. The company recently joined the Global Battery Alliance, an organization focused on the responsible production, transport, sale, use, reuse, recycling, and resource recovery of transportation, industrial, and stationary batteries and other energy storage devices.

“I am delighted to see that the participants of the Circular Economy 2030 contest have shown laser focus on addressing some of the world’s greatest issues,” said Fox-Martin. “The private sector has a leading role in effecting positive social and environmental change. The very definition of value in the business world is evolving, and positive social impact is a significant and growing part of it.”

“This belief is deeply rooted in SAP’s culture and is the driving force behind our social intrapreneurship program, SAP One Billion Lives. We created it with the aim to improve 1 billion lives by developing a portfolio of sustainable, shared-value impact ventures through the best we have to offer – our people, technology, and a vast ecosystem. In three years since its launch, the program has delivered impact at scale in healthcare, disaster mitigation, and relief and many other areas,” she explained.

“SAP is mobilizing our talent, technology and vast ecosystem to demonstrate that commercial success and social impact can and should co-exist,” said Fox-Martin. “The Circular Economy contest and programs such as SAP One Billion Lives are two of many powerful examples. Last year, we entered into a partnership with Social Enterprise World Forum to scale the growth and development of the social enterprise sector globally. Investing in social enterprises, which uphold the social or environmental mission through sound business models, is one of the most effective ways to build a more equitable and sustainable economy.”

Learn more about Circular Economy 2030 and how to apply at Contest submission window is open from January 23 to March 17, 2019.

SAP and our partners. Improving lives. That is our purpose.

*Google AI study citing: Baldé, C. P., Forti, V., Gray, V., Kuehr, R., Stegmann, P., The Global E-waste Monitor (2017): Quantities, Flows, and Resources (2017)