111: New Systems and New Power with Dame Ellen MacArthur & Guest Co-Host Catherine Howarth
This week, The Circular Economy!
About this episode
Currently our economy operates in a linear way. Take, Make, Dispose. It’s based on the industrial revolution, and we know this way of doing things has limits. Some of those limits we are reaching even today.
But there’s a different economy we could create. The Circular Economy.
This week we explore the ‘Circular Economy’ with #1 Circular Economy advocate, Dame Ellen MacArthur. This brand new economy is all about designing out waste and pollution, keeping products and materials in use, and regenerating natural systems. It incentivizes manufacturers to create and maintain better products, stops the Global North from polluting the Global South, and has the potential to regenerate wildlife and ecosystems that are on the brink of collapsing.
And with Christiana and Tom out this week, we invite special guest co-host, Catherine Howarth, CEO of Share Action, to discuss what it will take to encourage regenerative economic practices? Are we at a tipping point right now? Is a green, equitable, regenerative global society finally close to our grasp?
And later on in the episode, join us for a soulful acoustic performance of “What Can I Do?” by Rachel Sermanni.
Thanks for joining us!
Paul Dickinson: [00:00:13] Hello and welcome to Outrage and Optimism. I’m Paul Dickinson, and once again, I will be alone at the helm while Tom and Christiana are away. This week, I have enlisted the help of a special guest co-host, Catherine Howarth, CEO of ShareAction.
Catherine Howarth: [00:00:28] Hello, everyone.
Paul Dickinson: [00:00:29] Our special guest interview this week is with Dame Ellen MacArthur, someone who has a great deal of experience of being alone at the helm, but not so much for the co-host and Sharon and Clay, but really, really alone in the middle of the vast ocean with the closest human in the International Space Station. A world record-breaking sailor. Ellen is the leading advocate of the circular economy and our brilliant music this week comes from folk noir balladeer Rachel Sermanni. Thanks for being here.
Paul Dickinson: [00:01:05] Well, listeners, I’m very sorry, Christiana and Tom are away, but it does provide the opportunity for some brilliant co-hosts and nobody better than the completely and absolutely fabulous Catherine Howarth, CEO of ShareAction, where I have the honor to be her board chair. So I hope we will get an understanding today of what ice-cool work ShareAction are doing. ShareAction is a charity that spent last 12 years building the movement for responsible investment. And this makes her, Catherine, one of the most qualified people to unpack what is really going on at the leading edge of responsible investment. Now, these are going to be tough questions. No more Mr. Nice Guy Paul. I’m going to put Catherine on the spot. OK, so, Catherine, can you start us off by saying, why is the organization ShareAction so brilliant? I mean, is this a leading question, is it a tough question? And what have you actually been doing to get in the newspapers almost daily? Is it true you’ve been bossing around some of the world’s biggest banks? Do you sit at the nexus of supreme power between shareholders and corporate boards? What did that involve? Are you a kind of God, Catherine?
Catherine Howarth: [00:02:09] No, I’m a kind of goddess. And the reason that we have shaken up a few things here and there is of course because we are brilliantly chaired by your good self, Paul.
Paul Dickinson: [00:02:21] Well, thank you. Carry on, Catherine. Oh, no, no, no. Carry on.
Catherine Howarth: [00:02:26] And also because we have a fabulous mission to build a financial system that truly sustains life on earth and financial system of today is not the servant that it should be of our collective well-being. It’s very much channeling, you know, money to the people that already have a lot of money and serving corporate interests in a way that’s not sustainable for all of us. And ShareAction has somehow or other managed to get right into the center of all of that and start shaking things up a little. And we’ve developed a few good tricks over the years, like ranking the responsible investment performance of the biggest investors in the world, and that puts them in competition with each other and that’s good competition, as it turns out. And yeah, we’ve brought people together and what we do makes sense to people so the movement keeps growing. And that’s very exciting and a lot of fun as well.
Paul Dickinson: [00:03:27] Well, joking aside, Catherine, I have particularly known that ShareAction has built quite a case study around some of the actions you took with resolutions at annual general meetings with Barclays, with HSBC, with Tesco. I know a lot of our listeners are really, really interested in how you can kind of exert influence over corporations. So could you talk a little bit about how you’ve worked on resolutions AGMs?
Catherine Howarth: [00:03:55] Well, one of the things that’s fascinating about large companies that are listed on public stock markets is that they’re actually quite democratic organizations. At least they were designed that way when corporate design was first put together several hundred years ago. And so every shareholder has a vote and shareholders have rights to start putting proposals to management and so we’ve been using those rights. And for example, this January, we filed the shareholder proposal at HSBC bank, which is Europe’s largest bank, calling on the bank to stop financing coal anywhere in the world and to retreat from all kinds of high carbon financing that’s disastrous for our collective future. And we managed to bring not only very large shareholders together behind that, some of Europe’s largest fund manager, Omondi and Man Group, which is the world’s largest listed hedge fund, but also dozens and dozens of individuals who went out to buy just a single share in HSBC so we could make it all happen. And that’s really a lot of the fun of it, is bringing together the huge power of the biggest shareholders in the world, together with the people power of individuals who really care about banks doing the right thing, really care about companies doing the right thing. And thanks to, I guess, the work that we do, enabled and empowered to be part of something big and glorious, which in the case of HSBC in that resolution resulted in HSBC pledging that they would indeed stop financing coal, which is very exciting. So, yeah, we’re kind of developing these techniques and then we’re figuring out each AGM season, which is annual general meeting season, how far we can push them. And we’re committed to being experimental. We’re committing to being kind of collaborative and so far, so good.
Paul Dickinson: [00:05:57] Ok, so one last thing on this Catherine. I mean, a lot of this is on the ShareAction website, and there’ll be link in the show notes to that. But I mean, people all over the world might want to try and put a shareholder resolution towards a big company. Obviously, there’s a lot behind it but just, you know, just a summary. What do you think’s the secret of your success?
Catherine Howarth: [00:06:17] It’s all about relationships. We have been building 15 years of, we take everybody on. We really up for a fight. But we’re also interested in building long term relationships and interested in building them not just with big powerful investors and companies, but with ordinary people who might be tuning into this show. Everyone can be part of this movement. In fact, it really will take all of us together. And I think why we’ve kind of had a bit of success is because before I did this work, I was a grassroots community activist and organizer. And what I learned how to do for ten years was how do you build people power? How do you start to build networks that become irresistible, just one relationship at a time? And that’s the secret of it.
Paul Dickinson: [00:07:05] Hmm, fascinating. Now, you mentioned about ranking investors. Now we’ve had Richard Curtis on the podcast from Make My Money Matter before. Can you tell us how you fit in with that, those ratings that you’ve got? Tell us about that.
Catherine Howarth: [00:07:19] Oh, well, we all love what Make My Money Matter are doing, which is just amazing work and Richard is such a brilliant, inspiring spokesperson and also, of course, sensational filmmaker. Well, I mean, the rankings we do are very relevant because when we rank pension funds, we rank asset managers. One of the reasons we do it is so that ordinary people whose money is being invested by these powerful pension funds and asset managers can use that information to push for change. And that’s where Make My Money Matter come in because they’re really empowering people and building a people pension power bonanza.
Clay Carnill: [00:08:06] And now another beautiful contemplation on investing by Paul Dickinson, only on the O and O Network. Let’s begin.
Paul Dickinson: [00:08:29] Let me speak for a moment about investors, how our little world is under threat, the democratic governments that used to protect us seem to have got lost in the forest of corporate power and we’re alone. And so we might ask who can save us? We need a savior. Now, the wonderful Alan Quigley has found our savior, the universal owner, link in the show notes. Please read her amazing paper. It will change your life. These mighty investors, universal owners like large pension funds and giant insurance companies. These superhuman investors can see the world as a great big hole and Ellen wrote about how they realized they cannot invest logically in a world on the road to destruction. So they feel they must use their power to intervene in systems, to change them, to protect us from climate change, and thereby to protect themselves. But when I thought about this, a deep awareness came to me, please let me share it with you. Universal owners have hundreds of billions of dollars or euros, and so it makes good sense for them to work to protect the Earth with all those hundreds of billions they have. You can see it makes sense, they should act. There is a logic for them to work to protect the whole economy and not just make more money than other investors. Wait for a minute. Dear friends, if that logic applies to giant investors, then it must also apply to us. If we have just one dollar, just like one vote in an election, still logic says we must vote with our money. Thank you universe and investor theory. You are even better than Buddhism.
Paul Dickinson: [00:10:33] People’s pension power bonanza. I wasn’t expecting to hear that sentence this morning, but I’m glad I’ve heard it now. So look, just as we cannot possibly overestimate how important Costa Rica is, we also should stop this shameless advertisement for ShareAction. So let me ask you about goings-on in the news, Catherine, if I may. We just saw recently calls to the G20 finance ministers from leaders across the economic field, such as BlackRock’s Larry Fink who called for a long term durable returns. I mean, what do you think about these political developments with investors, Catherine, is institutional investment a kind of geopolitics by another name? What’s going on?
Catherine Howarth: [00:11:11] It is. And Paul, you’ve always been a great inspiration to me on that analysis. So Larry Fink and BlackRock are so interesting because, you know, until very, very recently, in fact, still is kind of the case, BlackRock came really low in our ShareAction rankings of fund managers, and we were not impressed at all. But just in the last couple of years, Larry Fink’s caught the ESG bug quite bad. And it is the world’s largest fund manager. They do carry extraordinary weight and power. And lately, they’ve decided that it’s kind of better for them and better for the world and I don’t know what’s going on really in terms of motivation, but they have decided to use their extraordinary power to start really pushing companies on climate change and other issues, human rights and other things. And so, yeah, Larry Fink, every year, he writes these incredibly eloquent letters to companies saying all the right things. And until recently, BlackRock wasn’t really backing that up with with using its voting power in the way we want it. But that even is starting to happen so that’s cool. And I really thought that Larry Fink’s big speech in Venice was an extremely interesting development, because what you’re seeing is this intersection between political power and finance power. Now, some people might find that like terrifying, but it’s always been there in the background and now it’s kind of more in the foreground and it’s potentially being used to really start solving some of these big problems.
Catherine Howarth: [00:12:42] I mean, climate change, the business community is actually getting quite spooked by what may be coming down the track and they’re starting to recognize that could really threaten and undermine their profitability. And the reason BlackRock is interested is that its massive customer base is really starting to be really worried about this. So they’re responding and I thought his speech is really well worth reading. It’s a fascinating set of proposals he’s making and I think watching BlackRock over the last couple of years has just been really very, very interesting. And I take a teeny, tiny little bit of credit at ShareAction for the fact that we prodded and we prodded and now we’re pleased to praise them a little here and there. I mean, we’ll keep our eye on them and there won’t be a free ride or free lunch from ShareAction but what we wanted all along was for finance to start using that extraordinary level of power for good and towards the objectives of rapid decarbonization and we’re starting to see the first hints that that might really be happening.
Paul Dickinson: [00:13:44] Hmm. Yeah, I was just, whilst we were talking, I looked it up, and BlackRock’s assets under management are equal to the combined GDP of India and Brazil, and Japan. I mean, it’s just an insane amount of money that is under the supervision of Larry Fink and the BlackRock system. So well done, you and others, for prodding them. Catherine, can I ask you a final question before we move to the interview? And that is just like because this is what you do morning, noon and night, what do you think is the future in responsible investment? What are you sensing? What are you seeing? What’s developing? What’s the next big thing?
Catherine Howarth: [00:14:21] Wow. I think the next big thing is that this is going to become the next big thing in the sense that, it’s already growing, but I feel there’s just incredible potential for far more people to become engaged and aware of what happens to their investments and pensions and savings. And, really, we’ve hardly started waking up the wider public to feel empowered, to be active, and to see their values at work in the way that their money is put to work in the real world and in the real economy through these powerful financial markets. So I just feel like we’re just at the starting blocks. It’s already a riot, it’s already a lot of fun but we really are only just beginning to wake people up to the incredible potential of ensuring that your money is put to use in a way that really builds the kind of world that we all need to be building together
Paul Dickinson: [00:15:22] Learning to vote with our money. OK, we’ve got to move on to our interview, but what an interview. Dame Ellen MacArthur at the age of four made up her mind to dedicate herself to learning to sail and by the time she was 29 years old, became the fastest solo sailor to circumnavigate the globe and remains the UK’s most successful offshore racer. In addition to her numerous sailing accolades, she was awarded Dame Command of the British Empire and appointed a Knight Chevallier of the French Legion of Honor in recognition of her achievements in 2008 and after announcing her retirement from professional sailing in 2010, MacArthur launched the Ellen MacArthur Foundation, a charity that focuses on implementing a transition to a circular economy. She is the world’s leading activist for circularity in production and consumption. This is a wonderful interview. We know you’ll enjoy it. And Catherine and I will be back after for some reflections on the discussion. Here we go.
Christiana Figueres: [00:16:22] Dame Ellen MacArthur, so wonderful, thank you so much for taking the time to join us on the Outrage and Optimism. It’s rather sad, we were just commenting on how sad it is that we used to actually see each other in person and it’s rather sad that we’re now restricted to screens. However, Ellen, could I start first with a little bit of your personal background? Because honestly, to go from being the world’s leading female sailor to being the world’s leading expert and activist on the circular economy, that is not necessarily a path that is predictable. So first, I would love you to share with us. How did that happen? How did you go from that experience, which is at an individual personal level of optimization of resources? How did you then jump to the systemic level where you are working now?
Dame Ellen MacArthur: [00:17:24] That’s actually a really good question, and you’re right. The sailing journey was an incredibly personal one. You go off on your own, you’re at sea for months. You’re isolated in the middle of the ocean in two and a half thousand miles away from the nearest town in the Southern Ocean. And you really develop that understanding of what it is to have finite resources. That for me, you’re right, was personal. It was a very personal journey. And it’s one that I never thought would lead me to a life outside of sailing. All I’d ever wanted to do since I was a four-year-old child was sail around the world. So actually, it was a shock to me to even reflect on the idea of leaving solo sailing to focus on another challenge. But it was something when I realized that I couldn’t put behind me, I couldn’t. It was like I’d seen something beneath a stone and I couldn’t put that stone down and carry on with my dream job of sailing around the world. I had to learn more and that’s what leads to your question. The answer to your question is how did I get from that personal journey to that systemic change? And the answer is actually, I needed to understand personally, having understood we had finite resources, what success looked like. Because when I realized resources were finite, I started changing everything in my own life.
Dame Ellen MacArthur: [00:18:34] I read everything I could. I started meeting with chief execs, experts, economists to try and understand how we use resources in the world. What’s happening to the world. It was a new look outside, but then I couldn’t get my head around what the goal looked like. The question was what’s the goal for our global economy? And it can’t just be use less until we have no more and we do no more and we make nothing else. You know, we need jobs. We need employment. We need a thriving world economy. And it was that pursuance of what does success look like for the global economy that led to the circular economy and understanding that this linear way we use resources, which is taking material out of the ground, make something out of it and ultimately throw it away. That can never run in the long term with a growing world population. But the circular model where those resources cycle and they feed back into the economy, that could. And of course, that has to be systemic change. That can’t just happen as a one-off.
Christiana Figueres: [00:19:27] Exactly. So can you unpack that for us, Ellen? Perhaps using an example, right? Because we hear about, we read about the circular economy, but I would love to understand from you specifically, what does that mean? Can you use an example where you might be able to contrast a particular resource that is used in the linear economy and how it would be used in the circular economy so that I can really understand the transformation that you advocate for.
Dame Ellen MacArthur: [00:19:59] So first of all, within a circular economy, there are three principles. You keep products and materials in use for as long as possible, you design out waste and pollution, and you regenerate natural systems. They’re really important because within a circular economy product set in the biological and technical space. Technical products or metals and plastics, they need to cycle within the economy, stay in the economy now to the environment. And then anything biological, which could be cut and waste, it could be food, anything made of timber, that should regenerate natural systems. So you have the technical and the biological. Now example of either would be a technical material. Let’s take a phone now. Most people have phones in their pockets. Within a linear system, you would buy that phone, you would use that phone. And at the end of the life of the phone, you’d put it in your drawer or you’d send it to e-waste. Now e-waste doesn’t know what’s within that phone. The only people that know what sits within it are the people who designed it and made it. So in order for that phone to sit in a circular economy, you probably wouldn’t buy it. You’d have access to it at the end of the year or the two year period. It would go back to the system. It would go back to the manufacturer or whoever’s providing the service for the manufacturer.
Dame Ellen MacArthur: [00:21:06] Then that phone would be decomponentized used, it may be resold, it may be reused in some form, it may be upgraded. But the most important thing is that phone goes back into a system that enables the recovery of the materials within it and that has massive energy implications, emissions implications and also it involves business model implications because we’re not selling anymore. We’re not selling things as fast as we can, as cheaply as we can to make more money. You’re building a high-quality product that sits within a system. It could be a phone. It could be a washing machine. It could be a vehicle. All the economics start to change. And then the biological system is fascinating because for years we’ve kind of taken away from biological systems. We’ve deforested we’ve created new farmland. For billions of years, natural systems have cycled and what we need to do with the circular economy when it comes to biological materials is these biological materials need to feed back into the system. So food waste, animal waste, food production waste, human waste. We need to get this back to the system to enable the regeneration of farmland, which is a massive opportunity. We talk about slowing down our demise, but here we have the opportunity to reconnect this vital resource with the land and enhance biodiversity at the same time.
Christiana Figueres: [00:22:20] I know Paul wants to jump in, but if I could just push you one level deeper into the technical piece. Does that actually mean, Ellen, that as a society, as an economy, as we evolve, will we be moving more toward services than products?
Dame Ellen MacArthur: [00:22:40] I think we will, yes. I think, when we buy a washing machine today, we pay tax when we buy it. Certainly here in the Western world. When we own the machine, we own all the materials within that machine. And then when it breaks, we have to get rid of it and we pay tax again through landfill tax when it’s thrown away. That incentivizes the manufacturers to build the machines to make as much money as possible. They don’t want them to work for that long, or else we’ll never buy a new machine and they’ll never make more profit. So actually, you build a system that can never run in the long term, the moment that switches to circularity. We don’t pay tax when we buy it because we don’t buy it. We have the service of the machine. The manufacturer wants that machine to work really well. They don’t want to have to fix it, but if they need to fix it, they need it to be fixable so that they can maintain a very good service for us because people will be competing, companies will be competing on service. And then at the end of the life of that product, if we get another machine or they need to change it out or it needs to be upgraded, it goes back to them. It’s not our problem. Now, I don’t need to own all the materials within my washing machine. I just want clean clothes. And when we’ve looked at the economics of that, they’ve really stacked up in a positive way. They’re 12 cents, your high-end machine today, which would be a circular machine vs. twenty-seven cents per wash with your average low-end machine. Now that means that within a circular economy. We pay less per wash because we’d have access to a better machine.
Paul Dickinson: [00:23:59] Wow, it makes so much sense when you say this. And Dame Ellen, thank you very much for your leadership. I saw you talking about, it was the World Coal Association saying they had 119 years of coal but your great grandfather going back one hundred and eighteen years and you said one hundred and eighteen years means nothing, which I think is just the most astute observation. I’m working with a group of people who are trying to build a time machine to get you sent back to about seventeen fifty or eighteen hundred possible to try and redesign. But if we don’t succeed in that, let me ask you a slightly more practical question. It’s amazing and I think so inspiring that as somebody working in this critical field, you work directly with corporations. And so my real question for you is what’s been your experience of how corporations can reconsider their business models? And also, critically, I wanted to ask you how much you think marketing may be part of building this change into our way of producing and consuming goods?
Dame Ellen MacArthur: [00:25:05] They’re good questions, especially the second, which I think is really key. So when I began this journey, which began as a very personal journey, some of the first people I spoke to were chief executives of big corporations, and the question was, what will your business look like in 10, 20, 30 years’ time? Now, what is the goal? And so often the answer was we need to be more efficient with our use of resources. We need to use less energy when we do it. We need to make a bit more using a bit less. And I kind of ask that question, so what is the goal? Is it to make nothing out of nothing and employ no one? It seemed to be a demise, managing a demise? And they got that. There wasn’t anybody that I spoke to that didn’t get the need for cycling resources and keeping the system running and running it on renewable energy, which is absolutely key. Everybody got that. But what really struck me was when you asked the experts, including the chief execs in many cases. What do we need that to say we need sustainable products? And then you’d say what is a sustainable product? And nobody could identify what that was. There could be, you know, something that runs on less energy. There could be something which biodegrades. But actually, that big systemic change of we have to make these materials cycle. We have to keep things in use.
Dame Ellen MacArthur: [00:26:17] We have to feed them back into the system. It simply wasn’t there. And that involves many, many levels of change within business. And I think many of these chief execs, they really do get it. Shifting is not easy. In fact, we’ve seen many start-ups since the foundations existed in 06. We’ve been tracking from the beginning and now valued at over a billion US dollars because actually that business model can be created from scratch and turned into something incredible. There’s some fantastic examples out there, but actually big incumbents. It’s a harder journey and it needs real clarity of thought. And that’s where the marketing comes in because to become circular, they will be building different products. They’ll be building those products in different packaging. They’ll be enabling us to have access to those products in different ways. The business model will shift. That involves many stages of design. It involves rethinking the finance model of that product, and it also involves the marketing of that product. And that is key. Now, these big corporations, they have some of the best marketeers in the world. If they can’t work out how to advertise circularity to us, then nobody can. And a big part of the foundation’s journey is to work with those big businesses to help use their gravitas and their marketing power to talk about circularity and to make circularity come to life through their marketing, it’s really important.
Paul Dickinson: [00:27:35] OK, just a final question on this one, Ellen. Is the degree to which you think that there’s an interconnectedness, could there be a coming together around the circular economy? Could it have broader ramifications than just the way we produce and consume washing machines and telephones?
Dame Ellen MacArthur: [00:27:51] Absolutely. And I think one thing I realized very early on in my journey and to Christiana’s point, actually, how do you get from personal journey to systemic change, you realize everything’s connected. We have to change the whole system. There’s no point in designing the ideal circular product if the system isn’t there to recover it and feed it back into the economy. You know, that’s been done. And it’s in many ways wasted because the system has to change. There’s no point in creating biodegradable packaging that can regenerate natural systems if the system isn’t there to recover it and feed it back in. So that systemic change is absolutely vital and it shows how interconnected everything is in the world. And business models and financing and design and manufacturing and value chains and the brittle nature of them. We live in this massive, interconnected world, but we can’t fix this in silos. And I think, you know, plastic packaging is a great example. You’ve got some of the biggest competitors in the world working really hard at their solutions to plastic packaging. But we’ve had 100 innovations in a hundred directions that did not add up to a solution globally. So you need everyone to get around a table and say, look, this is what success looks like and this is what we’ve tried to do with circular economies. Say no, linear can’t work in the long run, circular can, and paint that picture of what success can look like from a materials perspective, feeding them back into the economy from an economic and a business model change, and a marketing change. What does this look like? What does success look like? And paint that picture and make it come to life?
Christiana Figueres: [00:29:16] Well, you have painted that picture very eloquently, Ellen, and I’m very interested to know, where do you see the seedlings of change? Because we clearly haven’t transformed the linear economy. But I’m hoping that there are little shoots, little green shoots, that are coming out of change. And in particular, I would be really interested in hearing your assessment of the global south, because being a developing country person myself, I know in my own experience, but I’m sure everybody shares this knowledge, that the global south has traditionally become the toxic dumping ground for the global north on many, many different issues. And that is clearly something that is not fair, that keeps the global south behind and doesn’t allow for the kind of development and health standards and economic indexes that the South also should enjoy. So I would love to hear your take on where do we see the beginnings of success and in particular in the South. What are the concerns?
Dame Ellen MacArthur: [00:30:32] So seedlings, I think there are many, many examples of circular economy out there. Some don’t call themselves circular economy, but they’re great examples of the circular economy in motion. Some are the seedlings which are growing, the shoots which are sprouting in huge organizations, which can grow very quickly because of their sheer size into much bigger organisms. And this is very much our hope, working with these huge corporations. If they can change the direction of that ship, then we can do a lot quickly. It takes time, but you’re moving a lot at once. So although it’s gradual, it’s covering ground. And I think when you talk about seedlings, it makes me think of the small to medium enterprise companies that we’ve seen kind of arrive in the last 10 years and become these huge billion dollar companies. And they’re seeing a gap in the market that’s not being filled by the big corporations going for it and winning hands down. And there are some amazing examples of that. So I think circular economy is not new. It is out there. It’s out there in many, many different spaces. And just looking at some of the organizations that we’ve worked with, they’ve had lots of bits of circular activity within some of those businesses, but they’ve not called it circular economy. Renault is a company we’ve worked with for many years. When we looked at what they did within the organization, there were huge bits of circularity.
Dame Ellen MacArthur: [00:31:46] But then when you link that together, you end up with a circular strategy, you end up with a circular system. You can put all the pieces in place that need to build that broader system and need to accelerate it and that’s what the key is. It’s about understanding that whole system. When we talk about the global south, that really makes me take a step back. We make products all over the world and, you know, one of the big issues with the global south is we export our waste to the global south. The question that makes me ask is, why would we ever, in this day and age, where we can pretty much tourists to the moon? We’re in the process of going into space. If we set our mind on something, it seems we can achieve it. Why would we ever design a product that’s going to become waste? We’re cleverer than that. We can do material science. We can do systemic change. We can do these things. So it begs the question, why would we do that? If we do create something that’s going to be waste, it will be a waste in one country, but perhaps not in another. If we have a system to process that waste, then that waste can turn into a resource.
Dame Ellen MacArthur: [00:32:49] But if you don’t have the system, then that will always be waste. So I think there’s a real equality issue going on here and a design issue going on here and a reflection issue going on here that we can’t export a product that can only ever end up as waste in that country. And it’s not just a waste once it’s been generated as waste in the north, but it’s also if we send products to the global south in small plastic sachets. When we send it was sending a product, but we’re sending waste because it can’t ever be recovered down there. It can’t ever be regenerated because the system doesn’t exist to do that. So I think there are two elements when we look at the plastic waste for sure, there’s the first element of should we export waste to other countries? Absolutely no. We should never design it so it becomes waste in the first place. But the second thing is we’re almost exporting waste when we export products in those plastic sachets because they can’t be valorized. And that shouldn’t happen either. You should have a material for your packaging that is territory-specific. If we sent it in something which was valuable and biodegradable and could regenerate natural systems, you’re sending something of value. You’re sending something which is a resource. That is not currently the case.
Christiana Figueres: [00:33:59] Well, and just to add to that, Ellen, as well. Because when you were saying in the linear economy, we have extract, use and then dispose or discard. And I actually see, to put it very bluntly and irresponsibly simplistically, I see the global south coming in on the first chapter of that extract. Take cobalt. Most of the cobalt that we’re using in all of our electronics equipment comes from developing countries and is produced and extracted under very, very unfair, almost slavery conditions with even young children working, et cetera. Then we take the cobalt, we put it into our electronics. Most of those electronics are used in the global north and then we dispose of it, as you’ve already described. And where does most of that waste go? Back to the global south. So that is just yet another injustice in this linear economy that the global south, and I’m doing a huge and irresponsible generalization here, admittedly, but the global south can’t be put in the situation of let’s extract from them, let’s use and then let’s discard upon them. It’s just not going to work. And to your point about all of this being interconnected, that is very interconnected with political conflicts, social justice, international security, all of this is actually wrapped up into the same challenge, isn’t it?
Dame Ellen MacArthur: [00:35:38] I agree with you. That point of extract, use, and waste can’t work. When it’s coming from the global south to the north, and then back, that makes it even worse. We have to know how we build the system that can run in the long term. And that’s not that extraction and that using and throwing away. It’s taking a material and keeping it within the economy and keeping the value within the economy and doing that through repairing equipment or decomponentizing equipment or recovering the parts of the equipment that can go back into the next equipment and then almost the loop of last resort is where you take the material and you feed it back into the economy and you recycle it and turn it into the next product. But I think you end up with a much more diverse economy when you look at circularity. It’s not just these massive supply chains that start way over here and build something and then the waste ends up over here. Yes, you’re building products, but they’re sitting within a system, that means there’s much more local repair. That means that the products tend to sit more territorially rather than being shipped thousands of miles. You’re starting to build a system that can run in the long term and of course, that has to include equality. We can’t have a long-term system that’s unfair. That’s fundamentally wrong.
Paul Dickinson: [00:36:47] And a great opportunity is to be taxing resources and not labor. Just before Christiana asks you a final question, I’m going to sneak in a tiny question. We’re almost out of time. But, Ellen, you speak with enormous authority, great clarity, and force. It’s a personal question, in a way. You’ve had an incredible life journey. Just do you have any lessons that our listeners can take about how to sort of reach your goals?
Dame Ellen MacArthur: [00:37:13] That’s a difficult question. For me, every step of my journey has been about setting a goal. When I was four, I grew up in the countryside in Derbyshire, as far away from the sea as you can get. I was never going to become a round-the-world sailor. It was virtually impossible. Now, when I mentioned sailing at school, no one was interested. I was never going to become a sailor, but I decided that somehow I was going to become a sailor. And it’s amazing what you can make happen when you know what that goal looks like. And it’s exactly that that I pursued with the circular economy when I realized that resources were finite and I realized I wasn’t able to ignore it and carry on with my dream job. I had to work out what the goal was. It was asking stupid questions to thousands of people for many years to try to work out what does success looks like. Once you can see what that success looks like. And for me, that’s the circular economy where materials cycle, we run on renewable energy, we have diversity, we have regeneration. Once you can see that, you can make it happen. But if you can’t see it, it’s really hard. And so for me, the answer would be, how do you help people to realize their goals, work out what that goal is and then go for it.
Paul Dickinson: [00:38:24] Thank you so much.
Christiana Figueres: [00:38:25] Well, I kind of suspect that we and our listeners agree with almost everything you’ve said, Ellen, except when you say you were asking stupid questions. I don’t think anyone would agree with that. I think you were asking exactly the right questions. So thank you. Thank you for that. Ellen, sadly, we are totally out of time. So we have to quickly move to our last question, which we ask every single person who comes on the podcast. And from you I’m going to be really interested in your response, because I think the journey toward a circular economy is still, despite so many efforts, still just beginning, given how much we still need to do. So given that, our podcast is called Outrage and Optimism, because we feel that we need both and we feel they’re on some kind of a spectrum. And many days we wake up with both, some days just with one. And I just would love you to place yourself on that spectrum between outrage and optimism. Where do you place yourself?
Dame Ellen MacArthur: [00:39:36] I would be very firmly in the optimism camp. I didn’t begin there, I began the other end of the spectrum. But I realized that if everybody changed in the best way they could, they couldn’t find the solution unless the system changed. The system has to change and that gives me massive optimism because, for me, we know what a circular economy looks like. I have absolutely no doubt that we can get there because we’re clever and we can set our minds to things. And once we know what the goal is, we can make it happen and we’ll get there in fits and starts and some bits will be easier than others. But we know what it looks like. We know where we have to get to. That’s half the battle. So I’m a massive optimist because the circular economy is an economic opportunity. It’s a social opportunity. It’s an environmental opportunity. It’s an opportunity to build our economy in a way that can regenerate natural systems. That’s a great place to be.
Christiana Figueres: [00:40:26] Superb. Thank you so much, Ellen, it’s been totally delightful to have you. Thank you so much.
Paul Dickinson: [00:40:32] Thank you for your leadership.
Dame Ellen MacArthur: [00:40:33] Thank you.
Paul Dickinson: [00:40:41] Well, that was an amazing interview. And wow, you know, when she said you’re isolated in the middle of the ocean two and a half thousand miles away from the nearest town, and you really develop an understanding of what it is to have finite resources. That for me was personal. It was a very personal journey. You know, when I heard her say that it was like a biblical parable or something of the sustainable sailor, I was really like she’s kind of got it, right? She’s there and she’s had a kind of moment and grasped that she’s in a little sailboat in the ocean and we’re in a little planet in space. But what did you think Catherine?
Catherine Howarth: [00:41:21] Oh, it sends a shiver down my spine as well. She’s so inspiring. I mean, I just love the fact, you know, I always love stories of people having second careers because I just feel like, yeah, life’s too short to just have done one thing in your life. And she has taken so much from what she did in sailing and then drawn the wisdom out of it. I think it’s absolutely beautiful and she is phenomenal.
Paul Dickinson: [00:41:48] Yeah. I mean, there’s no doubt about that. I was really struck by her talking about some of the sort of practical details of a circular economy like you know, like your phone you probably wouldn’t own, you’d kind of rent it. And it made me think of the car club I’ve been a member of now called Enterprise Car Club, and I’ve been a member for about 15 years. But having, you know, become acquainted with the car club, I would never want to own a car ever again. All that stupid paperwork and it’s rusting and blah, blah, blah. It’s so much more efficient to share cars so that just seems to be that she’s really thinking through the business models that are required to get to where we want to go.
Catherine Howarth: [00:42:27] Yeah. And I think we can see some parallels in that with the pandemic by, you know, we’ve just changed so much of how we work as well. And we’ve stopped flying around just because we had to. And I don’t think people are going to go back to doing that either. So I, you know, her work and her illustrations really tell you how limited our imagination often is about we just assume it’s all going to have to carry on the way it is and that’s not true. And in fact, the alternative ways of doing it are just going to be so much more attractive, in fact. So, yeah, I love the way she makes that will feel very real and very possible.
Paul Dickinson: [00:43:07] And also talking about the big corporations being the best marketeers in the world, if they can’t work out how to advertise circularity to us that nobody can. But they haven’t started yet, really. I think that’s.
Catherine Howarth: [00:43:18] I was less convinced by that. I kind of feel we need more disruption. I mean, I do think some of the biggest companies in the world can be part of the solutions, without a doubt. And they have the capabilities and history. They have the best marketeers and so on. But a lot of them lack the incentive to change that would drive what we need. So I think we also need disruption and creativity that comes from the edges, as well as creativity that comes from large corporates.
Paul Dickinson: [00:43:45] Well, that is very true. And we know that poor old Kodak, you know, they actually had a huge, you know, digital photography division, but they ended up selling it as they went bankrupt because they didn’t really move as fast as they needed to. And for those of you who don’t know who Kodak were, that tells you something. They used to make film and if you don’t know what film is, fair enough. I just want to mention two policy instruments that I think are incredibly important and will also put a link in the show notes to the XTax project, which is a fantastic, kind of, how can I put it, sort of gift of the great entrepreneur Eckhart Vincent, who very sadly died in 2008. But Eckhart linked this idea of taxes on environmental harms, they were originally called Govin taxes, but things like taxing carbon, which is a really good idea, you need to tax carbon to stop people emitting carbon, very simple. But linking that with removing taxes from labor. So, you know, it doesn’t cost money to employ people, but it does cost money to pollute or to create emissions into. Those two instruments combined could really drive circular economy, meaning we’ve got lots, lots more jobs, but we’re also reusing and recycling everything that flows through productively. So I really think there’s a role for increasing taxes on pollution, removing taxes on labor.
Catherine Howarth: [00:45:07] Yeah, I don’t think we’re using the tax system nearly enough to build the world we need. And again, maybe the pandemic will shake some of that up. Here’s hoping.
Paul Dickinson: [00:45:18] Well, I sincerely hope so. A last thought for you, Catherine, because we’re coming towards the end of our time, sadly, and that is Ellen MacArthur saying everything’s connected, we have to change the whole system? I mean, how do you think, we’re very fortunate, there are tens of thousands of people listening to this podcast involved in all sorts of different kinds of businesses, NGOs with different objectives, different purposes. How can we work more as an integrated movement? How do you see us coming together and being more effective in collaboration?
Catherine Howarth: [00:45:55] Well, one thing we’re all plugged into, whether we like it or not, is the finance system, which is one of the reasons I find that such an interesting place to operate and work as a campaigner and activist. And then I think, you know, we also need to have this kind of consciousness shift, which Ellen MacArthur is an incredible, you know, powerful example of and advocate of that we, you know, she’s teaching us that incrementalism won’t do it. And I agree with her and I think that we need to change the incentives and all of those kind of structural pieces but also we need to change people’s hearts and minds and that’s why this podcast is such a glorious and wonderful thing because it’s reaching so many people and you never know which episode is going to touch someone and be the one that gets someone moving to action. But I’m sure every episode has done that for many people. But, yeah, it can’t happen without systems change and it’s coming.
Paul Dickinson: [00:46:56] Well, we don’t normally do this with co-hosts, but I’m going to cheekily ask you, Catherine, on the spectrum from outrage at one end, all the way through to optimism at the other. Where do you position yourself?
Catherine Howarth: [00:47:09] Oh, I’m so annoyingly optimistic. I just can’t help it. I just get up and I. Yeah. But I mean, it’s a driver. I think outrage is a driver. You do need anger. You do need some anger to do this work. But if you haven’t got buckets of optimism, you’re in big, big trouble. And luckily, I don’t know how I was, but I was born with some of that.
Paul Dickinson: [00:47:32] Certain special kind of magic sauce. Well, thank heaven for that. And thank you to wherever and however you came about, Catherine, very sadly, we come to the end of the show. So I’m going to have to say thank you very much indeed to the amazing Catherine Howarth and her very cool colleagues at the NGO ShareAction. Thank you, Catherine.
Catherine Howarth: [00:47:53] Oh, thank you, Paul. Thank you, Paul. Not just for this podcast and the fun we’ve had together on it, but for everything you do for ShareAction and to change the world.
Paul Dickinson: [00:48:01] Well, you’re very, very kind. Now to our wonderful music. This week it comes from folk noir balladeer Rachel Sarmanni, who originally hails from the Highlands in Scotland, and she’ll be performing her gospel-infused single, What Can I Do? We’re very much looking forward to seeing you next week when Christina and Tom will be back, but until then, it’s bye for me and bye from.
Catherine Howarth: [00:48:26] Me!
Paul Dickinson: [00:48:29] See you next week. Bye-bye.
Rachel Sermanni: [00:48:33] This song is called What Can I Do? I had come home to the Highlands, to my family home from an extensive tour, news had just come in that Trump had been elected. Also news that Leonard Cohen had died, as well as the looming prospect of Britain and Brexit on the horizon. And there was a lot of news at the time of human beings escaping war-torn countries and terror and hunger by crossing dangerous seas and to try and get to a safer place. The story of the refugee and how so many people were risking and losing their lives. I was lying on the floor and after having practiced some yoga in the hallway with all of those past, present, and future events on my mind and feeling really rather helpless, you know, the alchemy of songwriting is that you can do something, at least with yourself. And yes, this was my piece of protest and literally imploring and asking what it is I can do in this world and in this circumstance.
Clay Carnill: [00:54:13] Rachel Sermanni, folks with What Can I Do. There is a killer music video for the song that plays like a Western film, you know, red hooded figures, a cowboy, amazing static landscapes, a mysterious door to somewhere. You definitely need to go give it a watch. I’ve got a link for that in the show notes. And Rachel is doing a lot. She has a podcast. She teaches workshops. And you can go see her live. Yes. Like in person. She has dates coming up in Bristol and Sheffield, first week in August. So go to her website, rachelsermanni.com, I’ve got a link you can click for that too. And yeah, live shows people. Make Rachel your first artist that you see live. As always, please follow Covid protocols in place by your local health officials and government and stay safe. Enjoy some music and support artists. Thank you. And thank you to Rachel Sermanni. So there you go another episode of Outrage and Optimism. I’m Clay, producer of the podcast. Outrage and Optimism is a global optimism production and our executive producer is Sharon Johnson. Global Optimism is Sara Lau, Katie Bradford, Lara Richardson, Marina Mansilla-Hermann, Freya Newman, Santiago Monge, Sara Thomas, Sophie Baggott, Sue Reed, and John Ward, and our hosts are Christiana Figueres, Paul Dickinson, and Tom Rivett-Carnac.
Clay Carnill: [00:55:50] Shout out again to Paul for holding it down this week. Great job, Paul. Thank you to our guests this week, Dame Ellen MacArthur. On a personal note, Ellen is the first Dame I’ve ever met so I can cross that off my bucket list but more importantly, this idea that she has is so compelling, right? I mean, after the interview, I had lunch with my sister, and I just kind of spilled everything Ellen mentioned in the interview because it’s just so infectious. Systems change, man, it’s the way. To learn more about the Ellen MacArthur Foundation check the links in the show notes and go to ellenmacarthurfoundation.org. The circular economy is one of those ideas you just got to start talking about. You’ve got to start thinking about. Like, oh, yeah, I don’t really need to own the microchip that runs my smart washing machine. And why do I own all this steel? I just want clean clothes. I know she already said that, but it’s just so good. OK, go talk about it, learn more about it. The circular economy. And thank you to our guest co-host, Catherine Howarth. Catherine is doing cool stuff, almost said the other word and changing the world through ShareAction. So yeah, shareaction.org, links in the show notes.
Clay Carnill: [00:57:09] One thing I want to say about Catherine, I get to meet these people in person, she’s really fun and she has this aura about her that’s like I mean, I know she made a joke about being a goddess, but it’s kind of true. Like she has the look, the spirit, the energy, the ideas of a woman who would rise to save your people if your people were in trouble. I could see like a painted portrait of her in like a history museum with the description. Catherine Howarth, champion of the people. OK, go to shareaction.org. Follow them on social media. Got it all in the show notes. Go follow, save the world, you know what to do. OK and yes, we are on social media too @globaloptimism. Give us a follow and please leave us a rating and review on Apple Podcasts. We read every single one and sometimes we read them on the show. OK, so that is a wrap on the credits. Next week, more outrage and more optimism as we have our final episode of Season 3 before a short break. I know, we’ll miss you too. Much love to all of you. Please hit subscribe. We’ll see you stubborn optimists next week, bye.