Embracing the Circular Economy: The Path to Sustainable Growth

Sustainability

Attila Chikán Jr. of the BCSDH.

The Sixth Circular Economy Summit, a landmark event in sustainable business practices, gathered nearly 150 experts and enthusiasts to highlight the circular economy as a versatile tool for addressing climate change and biodiversity loss and improving environmental, social, and governance reporting.

Speaking at the event on Nov. 23, Attila Chikán Jr., president of the Business Council for Sustainable Development in Hungary (BCSDH), emphasized the urgency of the transition to a circular economy.

“Every year, we use 1.75 times more resources than the Earth can replace to sustain our lifestyles, and the supply of ecosystem goods and services cannot keep up with our needs,” he warned.

“Degraded ecosystems exacerbate climate change, undermine food security, and put people and communities at risk. While real societal needs could be met with 30% less material consumption, our economy continues to consume more material,” Chikán argued.

“In this situation, it is in our common interest to accelerate the transition to a circular economy, as the associated reduction in consumption alone would solve many climate and environmental crises. Immediate action is also needed in this area,” he emphasized.

The Global Material Use Index shows a worrying trend: rather than growing, the share of recycled materials in the global economy has fallen from 9.1% in 2018 to 7.2% in 2023. This decline, coupled with the projected increase in global material use of up to 84% by 2050, underscores the urgency of reducing consumption.

In Hungary, the Circular Economy Platform, established through the joint efforts of the BCSDH, the Netherlands Embassy and the Hungarian Ministry of Innovation and Technology, now has 99 member institutions. These prioritize knowledge sharing, collaboration, and immediate action to advance circular economy practices.

Dutch Ambassador Désirée Bonis.

Growing Awareness

A BCSDH survey shows a growing awareness among Hungarian companies of the importance of transforming production processes, extracting resources from waste, and prioritizing waste management for the future. However, the survey also shows that while changes in consumer behavior are significant, systemic changes are paramount for substantial progress.

State Secretary for Environment and Circular Economy Anikó Raisz of the Ministry of Energy discussed Hungary’s regulatory environment for the circular economy. Key initiatives include phasing out single-use plastics, implementing an extended producer responsibility system, introducing a mandatory deposit system, and a concession-based waste collection system to meet EU and Hungarian climate targets.

An OECD study released earlier this year, with significant input from BCSDH, provides guidance on how to achieve these goals.

The summit also featured distinguished speakers from a variety of sectors. Vincent Gruis, professor of housing management at Delft University of Technology, discussed sustainable construction, a critical area for circular economy integration. Joost van Dun of ING Bank presented the application of circular economy criteria in sustainable finance.

Camilla Visconti of Circle Economy Consulting highlighted the Corporate Sustainability Reporting Directive toolkit, the first reporting system that requires progress reporting on circular economy practices. The summit also highlighted the critical role of SMEs in the transition to a circular economy, with the launch of the Opten ESG Index as a tool to support their sustainability journey.

A panel discussion moderated by Irén Márta, managing director of BCSDH, explored the relationship between the circular economy and ESG compliance. Panelists including Tibor Bodor of ING Bank, Kam Jandu of Budapest Airport, Károly Gábor Nyári of Grundfos, and Richárd Végh of the Budapest Stock Exchange, discussed the importance of ESG compliance across sectors and how it can be supported by circular economy principles.

Need for Education

A second panel, moderated by Bálint Bartha-Horváth of CBRE, focused on the reform of Hungary’s waste management system. Participants highlighted the new comprehensive system, which aims to be 90% operational within three years, and acknowledged the challenges ahead, including illegal waste imports and the need for education about the new system.

The Hungarian Green Building Council presented a zero-carbon recommendation for the construction industry, a significant step towards the 2050 climate goal. Gábor Szarvas, president of the HuGBC, highlighted the importance of this initiative.

A significant highlight of the summit was the presentation of the “Tulip Award for Sustainability,” established by the Embassy of the Kingdom of the Netherlands in Hungary. Dutch Ambassador Désirée Bonis emphasized the importance of circular economy practices.

“The circular economy remains an important priority for the Netherlands, as the country aims to be fully circular by 2050. To achieve this ambitious goal, we should also build more sustainably, as the construction sector accounts for half of the raw material consumption in the Netherlands,” she said.

An expert jury of Deputy Secretary of State for Climate Policy Barbara Botos, HuGBC ambassador and former president Zsombor Barta, Shell Hungary country chair Andrea Istenesné Solti, Zoltán Krázli, program director of GS1 Hungary Nonprofit Plc., the BCSDH’s Irén Márta and Katinka Zinnemers, of the Netherlands-Hungarian Chamber of Commerce, evaluated the submissions and highlighted the diverse and innovative approaches to sustainability in Hungary.

The BCSDH, as one of the key founders of the Circular Economy Platform, remains committed to guiding over 140 member companies and the wider business community towards improved biodiversity conservation, ecological restoration and addressing social inequalities. This commitment is at the heart of its Time to Transform 2030 initiative, which is closely linked to the principles and objectives of the Circular Economy Platform.

This article was first published in the Budapest Business Journal print issue of December 1, 2023.

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