Circularity in cities: the case of Zurich

Just under 90% of Zurich’s citizens voted to enshrine the concept of circular economy into the city’s constitution in 2022. How do its manufacturing and finance sectors adapt?

Published

September 6, 2023

Relative to other cities, Zurich is performing well in terms of its sustainability

Zurich ranks eleventh in the world according to the Arcadis Sustainable Cities Index.[i] It ranks second in the People Pillar, which measures social performance, including quality of life[ii]. Furthermore, Zurich aims to hit net zero operational emissions by 2040.[iii]

Zurich ranks third on the Bloomberg and Holcim Circular Cities Barometer, with a score of 83.[iv] The barometer measures cities based on the circularity of their systems, buildings, living and leadership. Zurich scores best in terms of its circular systems with a score of 98. This is largely due to its intermodal transport system of public transport and cycling and pedestrian corridors. Its buildings and living score 37 and 89 respectively. Its lowest score of 2 is for circular leadership.[v]

In June 2022, Zurich signed the European Circular Cities Declaration

“The European Circular Cities Declaration is designed to help accelerate the transition from a linear to a circular economy in Europe, and thereby create a resource-efficient, low-carbon and socially responsible society.”[vi]

The signing was the first step in Zurich’s circular economy journey.

Later that year, circular economy was enshrined into Zurich’s constitution

On the 25^th of September 2022, Zurich held a referendum over whether to enshrine the concept of circular economy into its constitution. 90% of Zurich’s citizens voted in favour of the idea.[vii] This means that authorities in the canton will need to create frameworks for a “considerate treatment of resources, materials, and goods, as well as the closing of materials loops”.[viii]

Zurich is the first canton in Switzerland to include circular economy in its constitution.[ix] The circularity gap report states that by transitioning to a circular economy, Switzerland’s material use can be cut by 33%, and its greenhouse gas emissions can be reduced by 43%.[x]

What does a circular economy mean for Zurich’s businesses?

99% of businesses running in Switzerland are SMEs.[xi] Approximately 25% of Switzerland’s economy is industry.[xii] Its main exports are chemical and pharmaceutical products, machinery and electronics, and watches. We have previously discussed how the GSMA is trying to develop a more circular lifestyle for mobile devices. Similar take-back and recycling schemes can be used for other electronic devices. Regarding chemical production, microbial fermentation of biomass-derived feedstocks can be used to make new chemicals.[xiii] Research by Ewing et al. (2022) concludes that seven fermentation processes are technologically advanced enough to be applied in a circular economy.[xiv] Additionally, certain bioactive compounds, enzymes and nutrients in food waste are useful for the pharmaceutical industry.[xv] In Switzerland, about 300 kilograms of edible food per person is thrown away each year.[xvi] This highlights the great potential to recover some of the compounds in Switzerland’s wasted food to use in pharmaceutical products.

9% of Switzerland’s GDP comes from financial and insurance services.[xvii] The financial centre of Switzerland is Zurich. Zurich’s financial sector has a gross value added of CHF 29.9 billion ($33.8 bn USD), employing 97,300 people full-time.[xviii] The circular economy financing market is growing. Dr Antonios Koumbarakis defines circular finance as “any type of financial service or tool that involves one or more aspects of the circular economy. The aim of circular finance is to make a sustainable economy possible or to accelerate it and to advance the transition from a linear to a circular way of doing business”.[xix] Circular bonds, venture capital for circular projects, and loans and credits for circular investment are already available on the market.[xx] Analysis by Bocconi University in collaboration with the Ellen MacArthur Foundation and Intesa Sanpaolo shows that by decoupling economic growth from resource consumption, diversifying business models, and allowing businesses to better anticipate stricter regulation and changing customer preferences, circular economy strategies can reduce investment risks.[xxi] Exposure to supply chain disruptions and volatility of resource prices can also be reduced by embedding circular economy principles.[xxii] Moreover, financial institutions using circular finance models can benefit from a positive image and competitive advantage.[xxiii] Policy is needed to de-risk and incentivise financial investments in circular models.[xxiv]