Are the principles of circular economy applicable to HRM? Could they bring added value? This is what is being explored by the Circular HRM project led by the think & do tank Pour la Solidarité In collaboration with HR Square. In parallel to this journey, we are providing you with a series of insights to better understand what circular economy is (or is not). Third step: interview with Catherine Chevauché, Chair of ISO Technical Committee 323 on circular economy.
Everyone knows that consumerism and the increasing use of disposable products are endangering our planet, depleting its resources and emptying our pockets. An alternative to the make-use-dispose model is the implementation of a circular economy. An economy in which as little as possible is wasted and as much as possible is reused or transformed. Although standards and initiatives abound in different areas, such as recycling for example, there is currently no comprehensive vision of how an organization can "close the loop". The ISO technical committee on circular economy has been tasked with developing such a vision. Bringing together experts from 75 countries (62 participating members and 13 observer members), it began its work in May last year, with the ambition of publishing the first standards in early 2023.
Some ISO standards are famous - ISO 9000 on quality management, ISO 14000 on environmental management, ISO 26000 on social responsibility - while others are less known but quite relevant to the HRM world - such as ISO 30400 on the vocabulary of human resources management, ISO 30405 on recruitment or ISO 30408 on guidelines for human governance. The technical committee on circular economy is as a recent addition to a long list of working groups developing International Standards in virtually every area of our lives. What does this work consist of?
Catherine Chevauché: "ISO, the International Organization for Standardization, is an independent non-governmental organization whose members are the national standards bodies. For Belgium, it is the Bureau de Normalisation (NBN). In France, it is AFNOR. Each of these national bodies is responsible for the development and publication of standards in its own country. Their work is aggregated at the European or global level, with a view to producing international standards that are voluntary, consensus-based, relevant to the market, which support innovation and/or provide solutions to global challenges. It was during a seminar organised by AFNOR that the idea of creating a committee on circular economy was born. This led to the development of a French standard (XP X30-901, Economie circulaire - Circular Economy Project Management System - Requirements and Guidelines), published in 2018. Reactions were positive and led to the proposal to create an international committee. The fact that 75 countries are now involved shows great interest in the subject, with a balanced geographical composition. Many African countries participate in ISO technical committee 323, even though these countries have generally borne the burden of the inequalities of wealth and waste of developed countries. »
The drafting of an ISO standard is part of a long process. What are the foundations already in place?
Catherine Chevauché: "Our committee's remit is to establish internationally agreed terminology and principles for circular economy. A first text will therefore define the framework: what is the definition of circular economy, what are its principles? A second text will clarify how circular economy can lead to alternative business models and have an impact on value chains. A third text will deal with methods of measuring and evaluating the circularity of a product or service, with key indicators. Finally, a fourth text will compile case studies and share the experiences of organizations that have developed business models that can be considered circular. ISO/TC 323 intends to cover all aspects of a circular economy, including public procurement, production and distribution, end-of-life, as well as other broader areas such as changing societal behaviour. It also takes advantage of the links established with many other ISO technical committees responsible for developing standards related to this field: on sustainable procurement, quality management and environmental management, to name but a few examples. »
It is well known that there are a large number of definitions of circular economy. What is your starting point and what, in your view, are the issues involved in this definition exercise?
Catherine Chevauché: "A circular economy is a so-called restorative or regenerative economy. Instead of buying, using, throwing away, the idea is that nothing, or almost nothing, should be 'thrown away', but rather reused, or regenerated, thus reducing waste and the use of resources. While many organisations are 'doing their bit' in terms of recycling or local sourcing, we are still a long way from a world where economy is truly circular. One of the ambitions of this standardisation exercise is to define a truly global vision of what circular economy is and a model that can be followed or adopted by any organisation. One of the underlying issues, I think, is not just to look at waste management, for example, but to look at the whole value chain. There is also the issue of looking at all resources and not excluding certain resources, such as energy, for example. It is essential to be able to take a completely holistic view, and not to stop at the issue of materials and material flow. This is not just a simple technical question of product optimisation! You have to look not only at the environmental aspects, but also at the economic and societal aspects. And it is on these last two aspects that I expect of course that we will encounter the most difficulties. For example, according to the World Economic Forum, moving towards a circular economy is 'a multi trillion dollar opportunity with enormous potential for innovation, job creation and economic growth'. This is one of the facets. But another facet must lead us to question the logic of short-termism in order to take a long-term and sustainable perspective. We can see the challenge of the standardisation exercise: to be able to achieve a result that is sufficiently consensual to be used, but without losing the initial level of ambition. The latter implies, in our case, questioning our modes of production and consumption. Quite a programme! »
How would you translate these issues into a concrete example?
Catherine Chevauché: "Let's take a company that makes pens. The reflection of circularity cannot stop at the company's boundaries, namely the question of whether the pen is eco-designed. You have to look upstream, in the ecosystem in which the company operates: where the raw materials come from, but also how they are produced and then purchased. Then, how this pen will be sold and used. And, finally, what happens to it at the end of its life: will it have a new life, contribute to becoming something else, etc.? Here we see the idea of the value chain, but also the importance of including multidisciplinary perspectives: how does circularity imply different ways of working together, different data sharing, a different conception of value, etc.? This type of reflection raises a lot of questions. Circularity can only be said to exist if we manage to minimize all externalities, which implies modes of operation and behaviour that will be fundamentally different from those of today. »
Does considering "all resources", as you said, mean including human resources? Can human beings be considered as a resource in the same way as others?
Catherine Chevauché: "The principle of humanity should take us away from the perspective of considering the human being as a mere resource on an equal footing with others. But the principle of realism forces us not to exclude it: in many countries, and even for some organizations, the human being is often considered as such, as a disposable resource. As an HR manager, if you decide to lay off workers who are considered to be overwhelmed by a certain technological evolution in order to hire others who have the required competence directly, without considering retraining the former or developing their employability, aren't you wasting resources? aren’t you wasting resources when the workload and pressure become so great that they lead to burn-out? But, alongside this point of view, there must be the view that the human being should be seen more as a lever for moving towards a circular economy. It is indeed us, at the end of the day, who decide on our modes of production and consumption. »
"While many organisations are 'doing their bit', we are still a long way from a world where economy is truly circular"
Is human resources management a topic that has already been explored in your work?
Catherine Chevauché: "No, the issue has not yet emerged because, at this stage, we have around the table mainly specialists in the environment and sustainable development. But I am convinced that, at some point, it will be essential to broaden the areas of expertise in order to be able to develop the holistic vision I was talking about. The development of a circular economy requires the promotion of a partnership collaboration: more cross-functionality within the company, greater involvement of its external stakeholders in an ecosystems approach, etc. It also implies change management, which must be accompanied. There is a educational issue at stake. A circular economy provides for repair rather than throwing away and buying back: there is a pool of jobs to be created or brought back to allow for recovery and repair. It will also be necessary to review production so as to make products that can be dismantled and whose components can be reused to a greater extent than today. All of these issues demonstrate that human resource managers have a key role to play. »
Should the principles of circular economy lead HR professionals to review their own practices?
Catherine Chevauché: "There is certainly inspiration to be drawn from it in terms of support and skills development. Most companies will tell you that they are already doing this, but on a daily basis, we can see that they quickly fall back into simple accounting calculations. While the initial intention is generally good, the further down the organizations you go, the less people feel that they are being considered or that you are investing in their employability. There is a lot of talk in France about 'GPEC', the forward-looking management of jobs and skills. Some people make efforts, but others put a little bit of what they want into it.
"The challenge is to avoid reaching a soft consensus, a form of greenwashing"
One of the principles of circular economy is to extend the lifespan of products and to repair what can be repaired. One can imagine a parallel with the need to work longer to finance pensions: how can we ensure that work is sustainable and that it is possible to be active for longer periods without exhausting ourselves? How can we encourage the return to work of workers who have been absent for long periods of time, instead of excluding them from the labour market? Etc. »
Putting the subject of the applicability of circular economy principles to human resources management on the table may be challenging, even seem far-fetched....
Catherine Chevauché: "It is appropriate for any reflection on new subjects. We noticed it during our first sessions as well. The French described what they meant by circular economy. Then the Japanese presented their point of view. Then the Brazilians. And so on and so forth. We see various orientations appearing, sometimes going in all directions, with unexpected axes, to say the least. Then we try to sort it out, to keep what makes sense, making sure that it is not the European countries or Japan - because they are one step ahead of the subject - that impose their views. As chair of the technical committee, I am very keen that everyone be given the chance to participate, to express themselves and to contribute. This is why I hope that each of the themes can be steered not by one country, but by a couple of countries from different geographical areas - France and Brazil, Japan and Rwanda, for example. The other challenge, as I said, is to avoid reaching a soft consensus, a form of greenwashing. At the end of my term of office, I will judge the mission successful or unsuccessful according to the level of ambition we have been able to achieve. »
Is the Covid-19 crisis likely to give additional impetus to the realization of a circular economy or is it likely to divert attention to other more immediate concerns?
Catherine Chevauché: "Difficult to answer this question! In any case, the current crisis highlights the urgent need to develop a long-term mindset rather than remain focused on the short term, but also to turn to short cycles and positive value loops. When I opened the work of Technical Committee 323, I insisted on the environmental and social urgency, and this crisis shows that they are of striking relevance. It is essential to move the lines. But we also know that we are facing a model that is extremely strong and particularly difficult to change. So nothing can be taken for granted and certainly not that the lessons of this crisis will impose themselves...".
Christophe Lo Giudice
