Stephanie Hubold

Engagement Partner and sustainability expert at QVARTZ

After a stint in the financial sector and five years with McKinsey & Company in Munich, Stephanie’s passion to develop solutions that reconcile economic and environmental objectives led her to the Ellen MacArthur Foundation in the UK, the world’s leading think tank and multi-stakeholder network on circular economy and systemic change. Stephanie joined QVARTZ in 2018.

Video

An amazing framework for innovation

Who holds the largest responsibility in terms of sustainability? Is it regulators, individuals or companies? To Stephanie Hubold, the answer is all-encompassing. “Individuals can do their part by being very conscious about their consumption and lifestyle choices, and by leveraging their wallets and votes to create the right triggers. But ultimately, we need to change the system in which we live and that will, to a larger extent, be driven by how businesses operate,” she says. “Environmental sustainability is too often looked at through a very negative and constricting lens: It’s all about reducing, reusing and recycling,” Stephanie continues. “I think that the most important element is to rethink. Design differently, consume differently. Design to use again. Use – but don’t use up. Once you start doing that, sustainability really presents an amazing framework for innovation.” Since she was a child, Stephanie has had a keen interest in the environment and eagerly leafed through any WWF or Greenpeace magazine she got her hands on. Soon, she came to the realization that if she wanted to make a positive influence on the environment, she would have the most impact working from within businesses – with the budgets and power to change their product portfolios and the way they operate. While regulators have an important role to play in setting the right frame conditions, Stephanie believes that it is the businesses that really have the potential to innovate within those conditions and offer sustainable solutions to their customers that simply are more appealing, convenient and affordable than conventional solutions. “If you think about the advances we have seen in the last decade in for example renewable energy technologies or mobility solutions, you see how important it is to have this drive for innovation coming from the corporate side,” she explains.

“More and more investors are understanding sustainability as a true value driver.”

What goes around comes around

The concept of a circular economy has been discussed for decades, but has seen a large upswing in interest in the last couple of years, especially since the economic benefits of such a systemic shift were presented at the World Economic Forum in Davos in 2012. Circular economy is about rethinking and redesigning the entire value cycle. Stephanie uses the example of a smartphone to illustrate the basics of the principle: “A smartphone producer can design a phone to be long-lasting and easy to repair. That’s great, but with today’s consumer habits, once that phone is broken, it will end up in someone’s drawer or, even worse, in the trash. Because it’s too cumbersome to bring it back to the waste recycling where it belongs,” says Stephanie. In a circular, performance-based business model, she explains, the phone would instead make it back to the producer once it was no longer in use. 

“Ideally, you would lease that phone and there would be a clear contract in place where you return the phone at the end of an agreed period. This, in turn, would enable the producer to know that at the end of the month, they will get X hundred thousand phones back, which would then allow them to have a commercially viable scale for remanufacturing operations. And then, new reverse treatment technology comes into play, like for example the automated disassembly machines Apple is developing for their iPhones, with a view to make secondary operations as efficient as primary production,” Stephanie continues. This circular approach can be applied in numerous industries and the opportunities seem almost endless. Mobility sharing concepts, food waste apps, clothes rental services, Buildings As Material Banks and similar initiatives are becoming increasingly popular, and new technology is enabling a range of new sustainable solutions. The comprehensive framework of circular economy draws from different schools of thought, like biomimicry, performance economy, cradle-to-cradle design and industrial ecology. In this restorative economic system, waste is designed out and products, components, parts and materials are circulated at their highest utility and value at all time until they ultimately return to either the biosphere or the technical production cycle. The goal is to maintain as much of the embedded materials, energy and labor as possible. In the strive for a more circular, sustainable model, we all have a part to play, as regulators, businesses and individual consumers. “When you look at the current economic system, even though great strides have been made to increase recycling rates, it’s based on consumption rather than the restorative use of nonrenewable resources. This can’t run in the long term,” Stephanie explains.

The cherry on top

For businesses, circular economy is a splendid source of value creation, either via new types of customer engagement and tapping into new markets, or via cost savings through higher production efficiency and reduced use of virgin materials. Renault, for example, remanufacture several of their automotive parts and are able to do so at 30-50% less of the original cost. They use more than 80% less energy, water and chemicals and still bring the automotive parts to market with the same guarantee and performance levels. That’s a win-win situation. According to Stephanie, adopting more environmentally-friendly solutions is in fact not only a responsibility for businesses, but a necessity. If incumbents don’t offer sustainable solutions, some entrepreneurs will most certainly come along and do so in the near future. Already, there are a lot of innovators who are truly benefitting from offering sustainable solutions. “For example, we had the pleasure to support Worn Again Technologies, a pioneering recycling technology player in the fashion industry, in refining their commercial model. The company is able to separate, decontaminate and extract polyester polymers and cellulose from cotton, non-reusable textile waste and PET bottles and turn them back into new textile raw materials as part of a continual cycle. This type of technology can truly change the industry dynamics,” says Stephanie. Also, as the effects of climate change and damage to the natural system become increasingly visible and real to companies, this is directly reflected in input price volatility and supply chain disruptions. Therefore, many companies are beginning to hedge their risks. In order to become more sustainable, Stephanie’s number one advice to companies is to address the circular economy framework as a systemic change initiative and to ensure that the changes are present throughout the entire supply cycle: “It’s about addressing product design, new business models and advanced reverse-cycle capabilities. For businesses who are serious about this, it’s also important that they walk the talk internally. They can for example look at their buildings, their canteens, their car fleet, their travel policies and so on, which in turn also really helps engage employees and create awareness,” she concludes.

The new normal

In 2018, humanity consumed our planet’s resources 1.7 times faster than they can regenerate, and at the rate we are going, we will soon be facing a severe impact on natural and human systems. Stephanie is convinced that going forward, climate change will remain at the center of attention, with more extreme weather phenomena like droughts and floods. Similarly, damage of ecosystems such as the coral reefs and insect populations will become more visible over time. “However,” she says with a smile, “On my good days, I really do believe that sustainability will become the new normal.” “I believe there is a great momentum behind the whole sustainability agenda. And while so far, I have focused on the possibilities in environmental sustainability, social responsibility holds a similar potential. The value creation opportunity of achieving the whole range of the United Nations 2030 Sustainable Development Goals is estimated at an annual USD 12 trillion. At the same time, we see new actors come to life, for example in the U.S., where states and cities are filling the void a dismantled federal system has left. And more and more investors are understanding sustainability as a true value driver. Also, I am really positive that we will see change coming from the next generation who puts much more emphasis on environmental and social good practices.”

Circular economy, as coined by the Ellen MacArthur Foundation, is an economic system that is restorative and regenerative by design. It stands in contrast to the traditional linear economy and the take-make-waste model of production and consumption. In a circular system, waste is designed out, and economic value creation is decoupled from the consumption of finite resources.