Rathbone Greenbank’s 22nd annual Investor Day

Rathbone Greenbank’s 22nd annual Investor Day brought together over 140 guests to hear our expert speakers discuss the concept of the ‘circular economy’.

Opening the event, Rathbones’ chairman Mark Nicholls highlighted the recent surge of public concern about issues such as climate change and single-use plastic.

John David, head of Rathbone Greenbank, added that while solutions to a wide variety of global waste issues would undoubtedly be complex, we have an obligation to bring an end to the ‘take-make-dispose’ model of production and consumption.

Waste is a design flaw

Our first speaker was Julie Hill, chair of the charity Waste & Resources Action Programme – better known as WRAP. Working with partners in 20 countries, WRAP draws on some of the most comprehensive datasets in the world to advise businesses, governments and individuals on how to achieve economic and behavioural change.

In her talk ‘The Art of the Possible’, Julie explained how waste is essentially a design flaw that represents loss of financial value, environmental quality and business opportunity. When it first began to map material flows, WRAP discovered that very little resource input was actually flowing back into production cycles.

WRAP therefore advocates a new kind of systems thinking where resource consumption is reduced, recycling and secondary use is increased, and waste is minimised. In addition, WRAP supports business models prolonging material value and product lifecycles through leasing and sharing schemes.

Clean growth in the food sector

Next, Professor Mickey Howard from the Centre for Circular Economy at the University of Exeter Business School outlined what the circular economy means for the UK agri-food sector. He presented the findings of a research project undertaken with nine small firms in the local dairy and baking sector, looking at ways to eliminate waste and water pollution, recapture lost value and improve business resilience.

Prof Howard explained how the separation of two types of material flow (biological nutrients and technical nutrients) is key to a system that is both ‘restorative and regenerative by design’. But the mapping of these flows is not a simple task!

The research project found that circular systems can improve a company’s resilience to supply shortages or increased resource and energy costs. This might be through the reuse of surplus pastry in production or by separating solids from wastewater – enabling the water to be cleaned and reused on site and the solid waste used for fertiliser or in energy generation.

Such approaches preserve long-term value and promote a future state of ‘clean growth’.

Closed loop packaging

Alex Manisty, group head of strategy at DS Smith, the FTSE 100 global packaging group, then described how his company’s circular business model is redefining packaging for a changing world.

DS Smith manufactures cardboard boxes, operating a ‘box-to-box’ process that can produce, deliver, recover and repurpose its packaging within 14 days. Key to this cycle is an emphasis on preserving raw materials; if recovered in the right way, paper fibres can be recycled up to 25 times.

Designing sustainability into its wider business, DS Smith minimises material use and avoids oversized packaging by matching boxes to contents. Its Made2fit solution offers 26 box size options from two standard boxes, producing a box to exactly fit the size of each order and eliminating empty space.

DS Smith is also working with supermarket chains to reduce the amount of plastic they use to package and display their products. In doing so, it estimates that 1.5 million tonnes of plastic could be removed each year from supermarket shelves across Europe. The company also has capacity to recycle all the UK’s 2.5 billion disposable coffee cups, though contamination and effective collection remain ongoing issues.

Clothing and the challenge of circularity

Our final speaker, Sophie Mather, material futurist and founder of biov8tion, is working to encourage greater sustainability across the textile industry. Less than 1% of clothing is currently recycled and over 70% ends up in landfill – representing a loss in value in the UK alone of around £140 million each year. Despite the work done to engage with producers, only a small part of the global fashion market has so far committed to a circular fashion system.

Designers are nevertheless responding to demands for greater sustainability by factoring in environmental impacts at the design stage: making products from a single fibre, for example, simplifies the recycling process; dissolvable threads ensure used clothes can be easily repurposed. Businesses are also responding to an increased consumer willingness to limit clothing waste by introducing ad hoc rental and long-term subscription models.

The circular economy in sustainable investment

Kate Elliot, our senior ethical researcher, brought the session to a close by explaining how the team considers circular economy principles within its research process. By engaging with companies and policymakers, we assess risks and opportunities, highlighting the positive solutions offered by products or services, and identifying what ongoing activities might exclude companies from clients’ portfolios.

Continuing the debate

During the Q&A session that followed, the panel discussed a variety of points raised by the audience, including what we as individuals can do to make a difference; the role of governments in setting effective waste strategies; whether deposit schemes would encourage better collection rates; the danger of microfibre pollution in the textile industry; and the impact on the economy of a wholesale switch to circular business practices.

A full report of this event will be published later in the summer and will be available on this website, alongside short video interviews with our Investor Day speakers.