Circular Economy models case study series - Closing the Loop
What CTL has done since 2012, is to show that is it possible to collect over 2 million dead phones in countries that lack the formal infrastructure, the laws and regulation around electronic waste management and the consumer awareness on proper recycling. This initiative will demonstrate to the globe that sustainability is more than just long-term aspirations; it will make use of a product to demonstrate that the world can take action on circularity right now. And, in doing so, set a precedent for other sectors to follow.
COMPANY BACKGROUND
Closing the Loop (CTL) collects ‘e-waste’ (dead phones) in African countries and ensures that this waste is turned into metals. This ‘urban mining’ is a great alternative for ‘virgin mining’. Urban mined metals are arguably the cleanest, lowest CO2-emitting, fairest, inclusive and conflict-free metals in the world (especially considering the e-waste is from places where the waste cannot be recycled properly). Extracting gold from waste saves up to 90% carbon, when comparing to classical mining. And other metals have similar carbon reduction results. So, just looking at carbon, urban mining makes a lot of sense. And what’s more: for some metals, there is more stock above the ground, than below it. So all the company need to do, is start collecting.
Closing the loop (2020)
What CTL has done since 2012, is show that is it possible to collect over 2 million dead phones in countries that lack the formal infrastructure, the laws and regulation around electronic waste management and the consumer awareness on proper recycling.
CTL is already benefiting greatly from the fact that it is the only company in the world that can offer ‘mobile phone offsetting’. The ‘one for one’ service they have developed generates an additional income stream out of the work CTL is doing in emerging markets. Next to the value of the materials they produce, there is great value in the story and impact of their approach. Turning that value into cash – selling the impact and story as ‘Corporate Social Responsibility’ and ‘positive impact’ to organizations – improves the overall business case for waste collection and allows for higher pay out to the scrap collectors in Asia/Africa.
MOTIVES AND LEADERSHIP
Joost de Kluijver founded Closing the Loop and still leads the organization today. The idea behind Closing the Loop was born during a project Joost undertook in Tanzania, 2010. Joost’s former workplace was in the business of taking mobile phones to Africa for reuse. It was there that he saw that mobile phones lead to huge problems at the end of their lifespan. CLT is the result of a long
-term effort and strong local networks, something Joost takes great pride in.
Closing the loop (2018)
Joost has been involved in the telecoms and reuse industry since 2001 visiting Tanzania. Back then he was selling used phones to Africa, which he had bought in the Netherlands. CLT is now the very opposite of that business model as Joost realized he was contributing to a problem of mobile phone waste in Africa. CLT instead collects phones from the emerging markets and ensures they are properly recycled.
Closing the loop (2019)
The name Closing the Loop describes this process of rounding off the whole lifespan of a mobile phone, first used in Europe and finally recycled in Africa. Upon this self reflection of seeing his own work as contributing to a problem Joost created the CLT NGO in 2012. His philosophy was very much about focusing on a problem and trying to solve it. Upon starting CLT Joost also saw a huge opportunity due to popularity of circularity and material scarcity on the sustainable development agenda. He also realized this could be used as an important educational tool which could all be converted into a profitable commercial entity. What separates CLT from larger public and private organizations is that CLT is going beyond just articulating visions and ambitions. CLT is implementing these ambitions into actions in the emerging markets, and this requires significant tenacity and perseverance, especially as a first moving leader.
OBJECTIVES
The company want to create a blue print for African e-waste management. The approach, deliverables and failures are already closely being followed by international recycling companies and development banks. CTL has seen in countries such as Kenya that when the business case is proven (and the government allows for a legal framework), the foundation is laid for the involvement of larger organizations. Thus, they will benefit from the structures CTL will set up.
The company believes they should increase the visibility and demand for ‘urban mined’ metals (and with that, their market value). Especially metals extracted from waste that would otherwise not be collected. Allowing this type of metals to be more visible, will also add more value to the business model. As they already see a growing demand, for example from jewelers and electronics producers, for ‘fair trade’ metals such as gold, it leaves little doubt that there will also be a market for urban mined metals, as they greatly outperform any ‘sustainable’ alternative currently available.
STEP BY STEP
CTL collects and responsibly recycles end-of-life mobile phones from emerging markets, which has resulted in over 2 million scrap phones being saved from the dump since 2014. Through its innovative approach, CTL creates local economies of responsible waste collection, in the more than ten countries where it is active. In most emerging markets, local collection and recycling of ‘e-waste’ is not facilitated. Moreover, the plants that can recycle this chemical waste, are not connected to the informal waste industries in emerging markets.
The solution is to link a waste issue to a recycling opportunity, hereby matching supply and demand. CTL collects from consumers, via churches and other communities and buys from phone repairers and scrap dealers, provided these are not engaged in illegal or unsafe activities.
Closing the loop (2018)
CTL was set up as an NGO in 2012. They developed into a social enterprise in 2014, as they saw enormous potential for growth and wanted to work in a commercial way, in order to assure sustainable growth. CTL has 5 employees in Europe and around 12 local partners (one per country) responsible for ‘their’ country. They have had around 2000 people in our supply chain, that in some way or another financially benefit from this waste collection, in a way that is safe to them and their environment.
CONTRIBUTION TO COMPANY PERFORMANCE
The project is about sustainability: CTL creates a business model out of preventing waste from being dumped, burned or improperly ‘recycled’. The metals that are extracted from the waste leads to a huge opportunity: they are now producing items that use ‘urban mined’ metals, instead of the much more polluting ‘virgin mined’ metals.
CTL economics are difficult to calculate, as the market they are in (both that of offsetting phones, and that of selling African, urban mined metals) was created by themselves, hence they can not determine its size. But as CTL is being approached by companies like Samsung, Apple and work for the likes of the Dutch government, ING Bank and T-Mobile, they can state that their proposition is tapping into a market value that is considered big by many accounts. It has led, among many things to winning the Dutch Circular Award.
CLT is at its transformational stage still, for last two years since refocusing itself into a service provider. In just three years the organizational has gone from just its founder to having now with 3 part time and 3 full time staff members. Revenues have grown from Euro 250.000 to Euro 700.000 in 2017.
SOCIAL OR/AND ENVIRONMENTAL BENEFITS
CTL’s basic value proposition is quite simple: they pay people – consumers, mobile phone repairers, people collecting scrap phones - for their end-of-life mobile phone. This leads to jobs and income for the poor.
The benefits of the overall project are rather broad: from environmental improvements, to societal benefits to increased awareness. Those that benefit of course include the waste phone collectors and their surroundings, but also those that buy waste (e.g. Umicore). CLT sells different circular services to different customers.
One service allows to offset environmental impacts and make mobile phones ‘material neutral’ for large buyers such as KPMG or T-Mobile (clients of CLT). They do this by collecting as many mobile phones in Uganda and recycling and placing them back into production cycles. One new phone purchased in Europe leads to one scrapped phone being recycled in Uganda.
There are also educational benefits to their clients such as KPMG. Using CLT’s services also helps corporations to comply with new EU legislation related to circular economy. CLT has also helped T Mobile to offset 25,000 mobile phones.
Closing the loop (2020)
But the work will be done in a way that everyone benefits. This project will show the world that circularity is not just about long term visions; it uses a product of which 2 billion are made per year to prove that the world can act on circularity now. And with that give an example for other industries to follow.
Reference:
CTL Wins Circular Award 2018: https://www.circulairondernemen.nl/library/closing-the-loop-wins-circular-award-2018
Closing The Loops website: https://www.closingtheloop.eu/
