A business transition to the Circular Economy. IDB Invest Sustainability Week 2022



The 21st edition of the IDB Invest Sustainability Week "From Thinkers to Doers," which took place in Miami, Florida, from July 28 to 1, focused on business and growth opportunities for the private sector in Latin America and the Caribbean, leveraging sustainability and the circular economy as a critical factor.


As the IDB Group is the primary source of financing for Latin America and Caribbean development, and IBD Invest is its private sector associate, what emerges will play an essential role in the region's near future. The Miami event has provided opportunities to strengthen connections between the private sector and Latin American and Caribbean countries with panel discussions and success stories in high-value-added groups of entrepreneurs, investors, and international corporate leaders.


A circular economy is increasing in Latin America, with a strong commitment from institutions. We must consider the model as more than waste recycling but a strategic key to rethinking the business model, starting from its resources, design, and utilization model phases.


In the panel on 'A business transition to Circular Economy,' we discussed with Aitor Ezcurra, Head of Division, IDB Invest, Carlos Humberto Suarez, Director of Corporate Affairs, Arzyz Metals, and Ana Jimenez Sanchez, Country Manager, GoTrendier Colombia. Their participation is an example of what the Enel Group is doing globally, particularly in Latin America: from activities with suppliers to rethinking strategic technology chains, collaborating, and training the entire ecosystem on the subject.


Years ago, the Enel Group began its transition to a sustainable business model, with a decisive acceleration of the decarbonization process through the development of renewable sources and the progressive closure of coal-fired power plants. In 2016, Enel expanded this approach to encompass all the Group's businesses by adopting, among other things, the concept of circular economy as a strategic driver. This enabled both the launch of new business initiatives and the reassessment of existing ones by applying innovative thinking in the design, procurement, production, operation, and end-of-life phases of asset and material lifecycles. Key initiatives include the increased engagement with suppliers to measure the circularity of everything the Group buys and co-innovation with suppliers with an emphasis on solutions to close loops together through specific projects. In terms of customers, both increasing the circularity of solutions offered by Enel X for end users and supporting customers when measuring and improving circularity through reporting and consulting services[1].


In addition to the energy sector, the panel was an opportunity to explore several examples of the application of circular economy practices. Carlos Humberto Suarez, Director of Corporate Affairs, Arzyz Metals, presented some of the Mexican company's best practices. A company based in Monterrey, Mexico, Arrzyz Metals manufactures and commercializes aluminum and non-ferrous metals. Circularity is the basis of its business since it starts with the collection and recycling of scrap and industrial returns from its customers, even what, for other companies, is slag or waste. Arzyz calls it a by-product because by applying technology to these remnants, they extract aluminum powder and other salts that provide the steel industry. Environmental impact is measured by a CO2 ton emitted against tons produced, which are much lower than primary aluminum producers, and by closing the circle of collection, production, transportation, and customer relations. Thus, avoiding a more significant impact on the environment. Technology, as is with Liquid Aluminum, avoids energy costs for customers who do not have to re-melt the raw material.


Real testimonials from the metallurgical to the fashion industry. The latter is the most prone to generate waste and needs to change from overproduction to sustainability—a significant transition in which both the industry and consumers must be involved. Ana Jiménez Sánchez, Country Manager in Colombia, presented GoTrendier, the leading second-hand clothing buying and selling platform with more than 6 million users in Mexico and Colombia. This platform allows garments to change hands and be used throughout their useful life since they often arrive almost new to the landfills. In essence, the business model is circular and also generates three significant positive impacts: it allows women to earn extra income by selling their unused clothes, provides better access to fashion prices, buying brand products at incredible deals, and generates a highly positive impact on environmental savings, both in water care, as in reducing the carbon footprint.


The circular economy also has its projection in the urban context, as in Europe, Latin America, and the Caribbean, with examples in numerous cities. With initiatives such as the Declaration of Circular Cities of Latin America and the Caribbean, launched by ECLAC and IILA in October 2021 and already involving major cities such as Mexico City, Lima, Santiago, and Buenos Aires.


The same thoughts also apply to the even more peculiar context of small islands. Enel is actively participating in both the elaboration and collaboration on the subject, mainly through Enel X in defining products and services designed in this perspective. At the round table on the topic 'Circular cities and islands,' the topic was discussed with Paula Pelaez, head of SMEs and sustainable business of IDB Invest and representatives of several Caribbean islands. Discussions centered around the islands' challenges and how a framework of circularity can be a lever of change towards progress to achieve the objectives of decarbonization and sustainability.


[1] Circular Economy Position Paper December 2020 (https://www.enel.com/content/dam/enel-com/documenti/azienda/circular-economy-enel-position-paper-es.pdf)