Munich Startup: What exactly does “circular economy” mean?
Susanne Mitterer: Our global consumption of resources is rising continuously – yet these available natural resources are limited: we are reaching planetary boundaries. “Circular economy” is a sustainable approach in which resources are used as efficiently as possible and waste is minimized. The idea behind it is that products and materials are kept in a closed loop rather than ending up as waste after a single use: just like in nature, every waste is at the same time raw material for something new.
To achieve this, products must be designed from the outset to have the longest possible lifespan, with parts suitable for reuse later and potentially recyclable. The goal is to ensure responsible use of limited resources, taking into account ecological, social, and economic aspects.
Munich carbon neutral by 2035
Munich Startup: Why are you focusing so intensively on this topic right now?
Susanne Mitterer: Back in 2019, Munich City Council decided that Munich should be carbon neutral by 2035. The topic of circularity plays a key role in this. In November 2023, the Circularity Gap Report for Munich was published. The figures make clear that we are still at the beginning of a necessary transformation: on average, each Munich resident consumes 32 tons of virgin material per year.
The report estimates that of all the materials consumed by the local economy annually, only 2.4% are recycled materials. We need to find ways to use resources not as “single-use material” but as reusable material that can be used again and again. In the cultural and creative industries, there are many exciting solution approaches, for example the Circular Design Rules of the Institute of Design Research in Vienna. Our sector must therefore change itself on the one hand, but can also significantly contribute to social transformation on the other.
Munich Startup: How circular is the cultural and creative economy?
Susanne Mitterer: The circularity of the cultural and creative economy needs to be viewed with considerable differentiation due to the sector’s heterogeneity. In some creative sub-sectors such as fine art and design, awareness is growing that raw materials don’t necessarily have to be virgin and untouched. This is leading to increased focus on material reuse and upcycling. At the same time, we face major challenges in areas like fashion, for example. Our cultural and creative economy competency team in Munich has therefore been tasked by City Council starting in 2024 to reinvent the Munich Fashion Prize as the “Fair and Sustainable Fashion Award,” recognizing not only the design quality of fashion designers but also technological sustainability solutions.
Digital products, circular and sustainable
In the event industry, exciting pilot projects have been implemented nationwide that implement “circular economy” for large concerts and events, such as Labor Tempelhof. Here, event organizers and bands have consistently implemented the “Cradle to Cradle” concept at concerts by Die Ärzte and Die Toten Hosen, and are now sharing their experiences and tips with the scene.
Digital media and products, which make up a large part of the cultural and creative economy, are in a sense circular. Digital content can be reproduced endlessly, which reduces the need for physical resources. Many creative companies rely on collaborative approaches and resource sharing, whether through coworking spaces or shared production equipment. The cultural and creative economy has long been a pioneer in this type of “sharing economy.”
Munich Startup: Some companies don’t produce resource-intensive products or are structured more as service providers. Does circularity play a role here too?
Susanne Mitterer: Often we first look at the carbon footprint: what does a company’s carbon footprint look like? Where can resources and energy be saved? Beyond that, however, there is also the handprint – the impact: how can you contribute to positive change at the social and economic level? This is often where cultural and creative professionals have great strength. As a freelancer or entrepreneur, I can consider whether and how my actions inspire others.
Impact and carbon footprint
A concrete example: The young publisher &töchter has set out to rethink publishing. The content in the publisher’s program covers current social and ecological issues of our time. They have received a number of awards for this and have been winners of the German Publishing Prize 2023 since last year. They are making a contribution to raising awareness and providing impulses. On the other hand, books as physical products are less environmentally friendly than one might think: in the recycling of printed matter, some concerning substances can remain. The publishers of &töchter strive for the most sustainable production of their books possible, but only two books are truly strictly “Cradle to Cradle.” In this example, it’s important to weigh the impact and effect of the books against environmental damage.
Munich Startup: What does it take to make the positive impact of the sector accessible to others as well?
Susanne Mitterer: The cultural and creative economy can play a crucial role in supporting the establishment of circular economy practices in other sectors. When designers are involved early in product development, they can act as drivers of innovative design approaches where, for example, reuse or secondary use is already considered and designed into the product development process.
In terms of awareness-raising, the sector can also act as a mediator and build a bridge between companies and consumers: through communication, creative campaigns, and creation of emotions and imagery. This makes complex concepts more accessible and clarifies the benefits of sustainable business and living practices.
At the federal level, a Creative Lab on “circular economy” in the cultural and creative economy is currently underway. Here, new cross-industry solution approaches are being developed with companies and creative professionals – cross-sectoral.
Circular economy: concrete steps for startups
Munich Startup: What could be the first steps to make your own business model more sustainable and circular?
Susanne Mitterer: Converting to a more sustainable or even circular business model often requires gradual adjustments. First steps could include, for example, conducting a lifecycle assessment. These days there are many check apps and carbon calculators available for this purpose. Munich also offers free consultations through the Münchenklima program for companies with up to ten employees. This helps you understand where the biggest lever is in your own work – and where you can take first steps with manageable effort. It’s important to look for opportunities and ways to “get into action” and not to view the topic like a huge mountain.
It becomes exciting when you look at your own business model in product design, for example, and boldly go against the grain. What happens to a product after it’s used? Can I build it modularly or make it disassemblable? Do I sell an object itself, or can I only offer the use itself as a leasing or sharing model? Such approaches are currently being tested in many ways, for example when fashion is offered for rent rather than for purchase. Or when e-bikes are developed so that individual components can be refurbished and reused.
The key is not to make everything perfectly circular right away, but to view sustainability as an integral part of your own business model.
Sustainability as part of the business model
Munich Startup: Where do you see pitfalls in implementing circular business models?
Susanne Mitterer: There are many challenges to overcome when implementing circular business models. Circular economy often requires close collaboration with suppliers, take-back systems, and recycling facilities. The complexity of the supply chain can make implementation difficult, especially if it is not sufficiently transparent or flexible. Or the necessary take-back systems are not available everywhere.
And: switching to circular economy can initially require higher investments. Companies may need to invest in new technologies, recycling infrastructure, or training programs for employees and marketing activities for customers.
A third challenge is us – consumers. As a society, we are accustomed to products and packaging being developed without regard for the waste generated. And we now need to learn to accept that a book is also valuable if it’s not wrapped in plastic. We need to be willing to bring products back into the production cycle rather than simply throwing them away. And we need to abandon the habit of thinking that used, recycled items are worth less than new products made from new materials. As a creative professional or entrepreneur, you therefore need to take customers along on the path to circularity.
Overall, it comes down to the willingness to prioritize long-term goals over short-term challenges.
Financial incentives important
Munich Startup: What needs to change in legislation to allow startups to better integrate circular economy practices?
Susanne Mitterer: At the top is certainly the introduction of financial incentives such as tax breaks, grants, or other financial incentives to motivate startups to act circularly.
In the film industry, ecological minimum standards were published on July 1, 2023, that must be met to receive film funding. This is an efficient approach in which film funding, producers, and broadcasters all pull in the same direction. This is now also creating a new market for companies offering innovative solutions to meet these new requirements.
Since many startups operate globally, developing uniform standards and regulations for the circular economy could also help. Only if it is carefully documented during the development of a product or building which materials are used and how, and if later separability is considered, can they be used circularly afterwards. Currently, these “burdens” lie in the responsibility of the individual company, even though circular economy creates added value for everyone.
Conscious use of resources must become the norm, not just a praiseworthy exception. So: circles not crises!
The interview “Circles not crises: why circular economy will play a key role in the future” is the start of a series. We present companies from the cultural and creative economy that are pioneers in integrating circular economy concepts into their business model.
