New horizons for HRM

Why circular economy?

“On a planet with fixed resources, our current economic model is showing its limits”, observes Emmanuel Raufflet, Professor of Management at HEC Montréal (Montreal Business School), responsible for the Diploma, D.E.S.S., in Management and Sustainable Development. Our way of producing and consuming is not sustainable. Climate change, the waste of resources or even the loss of biodiversity, constitute increasingly worrying issues. The question is, how to deal with it. “We start from the premise that it’s not only necessary, but also possible to adopt a new production-consumption model through the circular economy.”

One of the difficulties in deploying the circular economy is due to the wide variety of definitions. “We have identified 114 different ones” says Emmanuel Mossay, expert in circular economy and visiting Professor in regenerative economy at several universities. “This variety is both a problem – with so many variants, there are bound to be initiatives that prove to be more-or-less regenerative – and a good thing – it allows as many actors as possible to be included. The French Agency for ecological transition, ADEME, offers an interesting definition of circular economy, as an economic system of exchange and production, which, at all stages of the life cycle of products (goods and services), aims to increase the efficiency of the use of resources and to reduce the impact on the environment, by developing individuals’ ‘wellbeing’.”

Since May 2019, a technical committee of the International Organisation for Standardisation (ISO) has been working on the development of internationally recognised standards to define common terminology and principles in the circular economy. “One of the ambitions of this standardisation exercise is to define a truly global vision of what the circular economy is and a model that can be followed or adopted by any organisation” explains Cahterine Chevauché, President of the ISO technical committee 323 on the circular economy.  “While many of the organisations are doing their part in terms of recycling or local sourcing, we are still a long way from a world where the economy is truly circular. Among the underlying issues is that, for example, of not being limited only to waste management, but of looking to the entire value chain. There is also the possibility of considering all the resources and not excluding some, such as energy for example. It is essential to be able to have a completely holistic view, and not to stop at the question of material and material flow.”

Human resources: stakeholder in the circular economy?

“The principle of humanity should keep us away from the prospect of considering the human as a simple resource in the same way as everyone else”, notes Catherine Chevauché. “But the principle of realism forces us not to exclude it: in many countries, and even for some organisations, the human is often seen as such, as a ‘disposable resource’. As a HR Manager, if you decide to lay off workers deemed overwhelmed by a certain technological evolution, to hire others who directly have the required skills, without considering re-qualifying the former or to develop their employability, aren’t you wasting resources? Are you not depleting resources when the workload and pressure becomes so great that they lead to burnout? Alongside this point of view, there must be that of considering humans rather as a lever for moving towards a circular economy. Ultimately, it is we who decide how we produce and consume.”

The logic according to which human being is replaceable, even disposable, remains very present in companies, supports Emmanuel Mossay. “We enter in a company for a given use, for a given time. And if we no longer fit, because the business model has changed, because we are no longer on top of the requirements or because we are considered too expensive, we get rid of you. It may sound caricatural, but this mess is a reality. Companies will try to help their workers to adapt, sometimes by giving them the means – training or outplacement, for example -, to be re-employed. But this is far from the norm. Very few companies are planning ahead in this regard.”

“In our economy, the unit of analysis is the transaction, and the management unit is often the company: it is on this basis that everything is measured”, explains Emmanuel Raufflet. “But if we re-focus on raw materials and their re-use as well as on collaboration within ecosystems of actors linked by the optimisation and intensification of the uses of material, we adopt a whole different perspective. It is thrilling to open such a dialogue with people from different backgrounds and disciplines such as operations, logistics, marketing, researchers, unions, and even consumers. It should be noted however that the centre of gravity of circular economy is not close to the HR. But it has value in being considered as an umbrella concept, with the advantage of being able to connect other relevant expertise for a socio-economic transition. The circular economy can be seen as a heuristic path towards a socio-economic transition more than as a destination. This path requires humility, mobilisation, consultation, and inclusion. It requires breaking down the silos, and as such of course, HR would benefit from being involved. Including them can open up new spaces of improbable exchanges!”

Principles of circular economy: applicable to HRM?”

“The first principle of circular economy – namely: the best resource is the one we don’t use, prompting us to question whether we really need it – could suggest a negative answer”, explains Emmanuel Raufflet. “But as soon as we use a resource, the philosophy of the circular economy is to seek to reduce the quantity of products that reach the end of their life – here we could work to reduce the number of cases of exhaustion at work, for example -, to reuse the resource as it is or to offer it forms of reuse – to promote professional mobility within or outside the company – and, finally, to recycle its components – here the analogy becomes more hazardous … It may also seem arguable to compare human resources to material resources. But as I said, to explore this field – as the Circular HRM project is doing – can be a vector of creativity, opening up the topic to other stakeholders and generate discussions that would not have taken place otherwise.”

If we do not include humans and their intangible contribution as resources for the company, where do we place them, asks Emmanuel Mossay? “We are talking about management of human resources, which may be criticised – some prefer to talk about human capital, human asset, human potential or even human wealth -, but should we not also consider the positive aspect of the reflection? Avoiding talking about it does not seem to improve the experience of humans in the workplace, if we look at current burnout rates. A resource, including non-material, is looked after (preserved), saved, developed, valorised (enhanced). The notion of human capital has the merit of presenting the human as an intangible asset and not as a cost factor. But it also puts the human in a financialised perspective. This being said, the most crucial assets today for companies’ competitiveness are intangible: they are knowledge, skills, imagination, motivation… more than the mere physical human work force.  Considering humans as a resource puts them back in the economic equation of profitability – currently the dominant economic model is that of capitalism – and invites them to optimise their management. Is that wrong? One does not optimise the use of a resource by exhausting it, by exploiting it, but in managing it in a responsible manner. More than criticising the use of the qualifier of “resource”, it seems to be more important to question the tendency to reduce the human to the status of disposable resource, what we call “Kleenex employees”. It is notably at that level that a reasoned application of the principles of circular economy could advantageously influence HRM. The idea is to have a progressive approach.”

Experts + Photos

• Emmanuel Mossay, is Project Manager at EcoRes where he contributes to the development of the circular economy department. Guest Professor with various institutions (UCLouvain, HEC Liège, Henallux, ICHEC, UNamur, ECAM,…), he participated to the drafting of the parliamentary report on the State and Perspectives of Circular Economy in Wallonia and the 55 proposals submitted. The resolution was voted at unanimity by the Walloon Parliament and integrated as a strategy to implement in the Regional Political Declaration 2019-2024. Emmanuel Mossya is also co-author of Shifting Economy that presents around 20 tools and methodologies to make the transition within the companies.
• Catherine Chevauché is presiding the technical committee 323 of the International Standardisation Organisation (ISO) which mission is to elaborate international norms on circular economy. Bringing together 75 experts, this committee began its work in May 2019, with the ambition to complete a publication of the initial norms at the beginning of 2023.
• Emmanuel Raufflet is Professor of management at HEC Montréal, in charge of the D.E.S.S. – Diploma in Sustainable Management and Development. He is also Academic Director of the Institute of Environment, Sustainable Development and Circular Economy (EDDEC) in Quebec (Institut de l’Environnement, du Développement Durable et de l’Économie Circulaire). He notably published, with Manon Boiteux, a report drawing on the lessons of the first five years of the ecosystem created around the EDDEC Institute:  Mapping researcher-practitioner practices for circular economy (October 2019)

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