Special Feature
Europe Goes Circular: What’s in It for Hong Kong?
Europe Goes Circular: What’s in It for Hong Kong?<br/>歐洲邁向循環經濟:對香港有何啟示?

In the European Union recently it has been a case of another day, another directive.

Anyone who doubted the commitment of the E.U. to deliver on the European Green Deal, announced in autumn 2019, need only review the legislative measures enacted since then to understand just how far-reaching the deal will be. 

Since the beginning of 2022, the E.U. has published a number of measures: on sustainable products, targeting the textile, construction and electronics industries; on a sustainable industrial agriculture sector; on packaging and packaging waste, which engage producer responsibility; on biodegradable and other sustainable plastics; and finally on biodiversity and reducing pesticide, for agriculture and food, under its Farm to Fork strategy. 

Though some of these are only proposals, they will have widespread implications for any company that wants to sell, produce products for, or serve the E.U. Products will need to meet sustainable design criteria, adopt standards for traceability and tracking their environmental impact, be packaged sustainably, and incorporate built-in circularity. 

From an opportunity perspective, new markets for sustainable materials, recycling and reuse will need to be created to support this transition. 

What does this have to do with Hong Kong? Although none of these proposals, or regulations, extend beyond the 27 E.U. members, three factors will ensure that the E.U. Green Deal is likely to be felt far beyond the borders of the bloc.

Firstly, supply chains are global, which means that standards that apply to goods sold within the E.U. will actually be implemented by manufacturers, processors, and even farms operating thousands of miles offshore. For such producers, margin is a function of driving simplicity and scale. As a result, a regulation affecting assembly lines for goods destined for the E.U. may also affect goods going to the United States or even Asia, as manufacturers seek to drive scale in purchasing sustainable materials and manufacturing.

Secondly, on the other end of the supply chain, a company that sells into the E.U. may discover that abiding by the E.U.'s directive that "all packaging in the E.U. is reusable or recyclable in an economically viable way by 2030" will actually save costs by reducing the overall amount of packaging, while simplifying its design to enable recuperation and recycling. 

Thirdly, although the E.U. may today seem to be a global anomaly with its proactive approach to Covid recovery spending, sustainable products, circularity, biodiversity, sustainable finance and the like, it could also become a forerunner and standard setter. This has historically been the case, particularly regarding the environment, where the E.U. has not shied away from using policy to drive market change. 

Europe was the first major region to commit to net zero, and although it has taken several years, today nearly 90% of the world's economies have made such a commitment. 

The recent endorsement of a new United Nations resolution by 175 nations to end plastic pollution and forge an international legally binding agreement by the end of 2024 to address the full lifecycle of plastic, including its production, design, and disposal, does seem to signal the beginning of the global circularity movement.

What does this mean for Hong Kong companies? For Hong Kong businesses that sit across manufacturing supply chains – or any services going into manufactured goods – the evolution of E.U. sustainability requirements should be reason enough to take note. 

Whether or not your company will be directly affected by new compliance requirements, it is likely that your suppliers, designers, transport providers and financiers will eventually be affected. It is no longer about avoiding the impact, but about understanding what the new normal of sustainable products means as an opportunity. 

Beyond the European push towards circularity, there are compelling local reasons for thinking strategically about circularity, even in the absence of clear local policy directives. Put simply, circularity answers all the questions about the livability of our city and future lifestyle, beyond the big picture of net zero. 

A circular economy will enable us to live, move around, consume, wear clothes, and indulge in pleasures that make life worth living as it transforms these actions into parts of a sustainable whole. In other words, we need circularity – and deliberate steps towards sustainable products, recycling and waste management, sustainable buildings and conservation – to be able to live well and within our ecological means. 

Beyond this, we have heard much about Hong Kong's future opportunities within the many markets that China is creating. The Central Government has already made its commitment to circularity clear with the National Development and Reform Commission's announcement in July 2021. 

Four decades ago, Hong Kong helped to transform Guangdong Province, and the rest of China, by realizing that we can achieve more as part of an ecosystem than individually. In doing so, we helped to make China the factory of the world. 

Today, we face the same opportunity with regard to circularity: can we imagine a circular economy that incorporates the financing, know-how and services of Hong Kong together with the innovative, industrial and human infrastructure of the rest of the Greater Bay Area (GBA)? 

Admittedly, this vision could be a long way off. But we can start on it today, by bringing companies together to educate, engage, and pursue the technologies that will help make sustainable lifestyles attainable within the next decades.

Could Hong Kong be a centre of excellence within the GBA for setting product and services standards, assurance and testing, as well as training and developing the relevant talent and new professional industries to deliver on the circular economy? All these are ours to imagine, and deliver. 

Where there is risk, there is always opportunity. 

The Hong Kong business community is encouraged to consider the new opportunities that environmental trends like the circular economy may bring, as opposed to only focusing on meeting regulation and avoiding additional burdens imposed by risk and compliance. The question for us is whether we as a business community will understand the future net zero and circular economies, and in doing so, write ourselves into them at the centre.


Pamela Mar, Managing Director, ICC Digital Standards Initiative, and Jeanne Ng, Chief Sustainability Officer, BlueOnion Limited


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