Uniting the circular economy and social justice

Author: Andrea Westall

Date: 16/11/2020

Whilst sustainable development has always meant bringing together and reconciling the social, the environment and the economic, there continues to be a tension between social justice and environmental sustainability. For example, a policy aimed at increasing fuel prices to reduce car, petrol or diesel use, tends to disproportionately affect those on the lowest incomes, or people in rural areas who have no alternative options.


It’s because of these examples, that we now talk about a just transition, one where environmental sustainability and social justice are achieved at the same time. Friends Provident Foundation directly supports this approach through projects and organisations such as Riding Sunbeams who are the first business to make a legal commitment to a just transition.


However, whilst the understandable focus is to reduce and ultimately eliminate greenhouse gas use, the equally important transition, towards a more biodiverse and resource-preserving future, has received far less attention. This is partly because concepts like the circular economy, moving from a linear ‘take, make, throw away’ culture, to one which retains and regenerates resources within production and use, can be quite technical.


The Ellen MacArthur Foundation provides a useful basic introduction and many inspirational examples of this approach. However, whilst these changes will create new opportunities for some, this will also negatively affect other people whose jobs and local areas are dependent on say resource extraction or redundant industrial models. Creating a more circular economy could therefore create new sources of inequality unless social justice receives equal weight in thinking and planning.


Friends Provident Foundation is supporting an initiative between the Onion Collective (an all-women led community enterprise) and Biohm (a purpose-driven biomanufacturing company) which directly addresses this problem. They are setting up a joint venture in an old paper mill to bring employment to the struggling seaside town of Watchett in West Somerset, and realise a “new, circular and inclusive 21st Century industrial future … which values people and the environment as much as profit”.


The business will use fungi to break down local waste resources (collected from other organisations and businesses) to create sustainable materials that can be used in construction, and there may be  an additional future use in breaking down plastic. It is also a way to contribute to a new local economic model, particularly for areas with low income and employment. As a result, there has been interest from governments in Portugal, Germany and the Netherlands who have approached Biohm to explore similar joint ventures.


This example brings together not only a more ecological approach to the economy, but also one which better circulates and distributes wealth. Key to its success is a joint ownership model, between the Watchett community and Biohm, so that control and returns are equally divided.


Biohm hosted a fascinating webinar in summer 2020 which explored the potential of this approach: Expanding Circles: Restoring local equity in the built environment. However, these business models challenge the current economic and policy system. The idea of joint ownership and collaboration does not fit with government support such as the Enterprise Investment Scheme. To use the latter, a company (in this case Biohm) has to have the dominant shareholding, not be in an equal partnership. This means that ownership shares have to currently be divided 51% Biohm and 49% Onion Collective to meet the requirements. They will change to a more equal share, when this financial incentive is no longer needed.


Examples such as this illustrate the potential to fully realise sustainable development, but also the constant need to assess and remove the barriers to doing so.

Friends Provident Foundation continue to explore and support innovative business models which create more appropriate ownership and control models to realise a sustainable and inclusive economy.


We’d particularly like to hear from you if you experiencing similar examples of policy and practices that are making it difficult to realise your aims. You can contact us on [email protected]