Can we create a sustainable circular economy?

Written by
Jon Kauffman

Purpose, Inc., episode 1.6: Tom Szaky, CEO of TerraCycle

Key takeaway: “What is exciting to me is that this idea of purposeful capitalism, social capitalism, eco-capitalism—it’s capitalism thinking about other things, not just profit.”

In this episode of the “Purpose, Inc.,” podcast, host Michael Young talks to Tom Szaky, founder of TerraCycle and author of The Future of Packaging, about how short-term, shareholder capitalism is harming the environment and how our economy can transform into one modeled after nature’s cycles. “We have been so fierce on the idea that the only thing that should matter is profit to shareholders, we’re not accounting for the cost to our environment or society,” Tom says.

Tom is a recycling pioneer and an eco-capitalist who’s built a business devoted to eliminating the idea of waste. As a Princeton freshman, he started TerraCycle in 2001 to feed food scraps to worms and turn them into fertilizer. The company, based in New Jersey, now recycles hard-to-recycle goods such as cigarette butts and face masks. In the spring of 2019, TerraCycle launched Loop, a service that delivers major-brand products in reusable packaging—and then picks them back up.

Moving beyond the take-make waste economy

Tom is at the forefront of movement away from what he calls the one-way “take-make waste” economy toward a circular recycle-reuse economy. “Circular is about how to make it regenerative, ideally, to get things to be recycled and made from recycled materials—maybe even better, make them reusable,” he says.

Building a circular economy isn’t quick or easy. In this episode, Michael and Tom debate:

  • What role should governments play in building a circular economy?
  • Are investors who push companies to become more sustainable having an impact?
  • Are individual consumers powerless to change corporate behaviors?

After 50 years of designing a “linear economy” to make disposable products, the biggest obstacle to shifting toward a circular economy may be human nature, Tom says. As individual consumers, we’re selfish—trained to value convenience and affordability.

The ideal first step in shifting the economy might be what Tom calls “full-cost accounting,” so producers pay up front for the damage a product will do to the air, the ecosystem, and all the different stakeholders. But that may be unpalatable.

Swimming downriver

So TerraCycle is taking a different approach with Loop: “Instead of metaphorically swimming upriver— which is equal to changing behavior—let’s swim downriver, and try to play into (consumer desire for convenient, affordable goods) but do so with business models that are de facto more circular,” Tom says.

Ultimately, Tom warns, government, consumer demand, or investors may not play as big a role in forcing change as a more powerful force: “the force of nature pushing back on us.”

Listen to Michael’s conversation with Tom Szaky here:

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