Why the Bioeconomy Can Pave the Way to a Greener Future

A confluence of rising temperatures, extreme weather events and a growing population threaten to push our planet to the breaking point, yet a viable alternative to embedded production patterns could prevent catastrophe and put us on the path to a sustainable future: the bioeconomy.

Rooted in circular economic principles, the bioeconomy offers a more sustainable business model. It enables the production of food, energy, chemicals and other materials that can be reused, repurposed or recycled, in turn reducing waste. Done right, the bioeconomy can drive sustainable growth, support ecosystem restoration and mitigate climate change.

Shifting to a low-carbon, circular bioeconomy also represents a $7.7 trillion business opportunity through the end of this decade.¹ Only around 8.6% of materials produced in our linear value chains are currently cycled back into the economy.² Making the transition requires innovation, investment, regulation and a drive to marry purpose with profit. Success could solve some of today’s biggest environmental challenges, crowning new sustainability leaders along the way.

“Increasingly, businesses are leading the global shift towards a circular bioeconomy,” says Erik Solheim, Senior Advisor at the World Resources Institute and former Executive Director of the UN Environment. “This is because environmental, social and governance, often called ESG, are no longer a cost, nor a risk mitigating factor. It is a business model that presents opportunities to innovate for a sustainable future.”

While there’s much work to be done to realize a global bioeconomy, some companies are taking a lead. One example is RGE, a resource-based industrial group of companies with interests in paper, palm oil and energy. RGE produces sustainable natural fibers, green packaging and clean natural gas for products such as paper, edible oils and clothes.

“Sustainability means starting the business right—we can produce from the land, but must also protect it,” says Anderson Tanoto, Managing Director at RGE. “Positive impact on climate, nature, communities and business growth must go hand-in-hand. Because we use renewable bio-resources at scale, we’re well positioned to create transformative change.”

RGE’s drive to create transformative change was on display at COP21 in 2015, where it announced a $100 million investment over 10 years to support the conservation and restoration of deep-forested peatlands in Indonesia. The investment has proven vital in protecting biodiversity and endangered wildlife species as Indonesia grapples with rapid deforestation.

Among RGE’s flagship initiatives is the Riau Ecosystem Restoration (RER),³ a public-private partnership between BIDARA, Fauna & Flora International and APRIL—a pulp and paper company under RGE. The initiative focuses on the restoration and conservation of 150,000 hectares of ecologically vital peat forest on Sumatra’s Kampar Peninsula.

By assessing, protecting, restoring and managing this environment, the RER’s ecosystem is gradually recovering to its balanced state. Improved forest health has yielded a notable increase in biodiversity. And recent surveys report the presence of critically endangered species including the Sumatran tiger and the elusive flat-headed cat.

Green initiatives like the RER reflect both a wider corporate drive to realize a sustainable future and an understanding of what matters to eco-conscious consumers. A recent global survey found that 86% of people consider a company’s record on the environment, ethical business practices, and diversity and inclusion before buying their products.⁴

One wrong move could chase even the most loyal customers away. Half of respondents in a global online survey said they switched products or services because a company has violated their values.⁵ The primary reason they switched was to support products or services that protect the environment.

The fashion industry has seen this play out time and again. Fashion accounts for up to 10% of global carbon emissions—more than international flights and shipping combined.⁶ And an estimated 85% of all textiles go to the dump every year.⁷ To overcome this challenge, RGE announced in 2019 a $200 million investment in research and development over 10 years that will help foster a cleaner fashion industry. Already the world’s largest producer of viscose fiber or Rayon—a primary ingredient for making clothing—RGE is working with innovators, industry partners, research institutions and academia to scale up solutions that will deliver cleaner and more circular cellulosic textile fiber.

“The choice of materials that are natural, biodegradable, responsibly produced and can be easily recycled at the end-of-use, are critical considerations for fashion to be sustainable,” says Tey Wei Lin, President, RGE.

The Textile & Fashion Federation (TaFF) is also partnering with RGE to advocate sustainable fashion industry practices within Singapore and the wider region, through program implementation, research, and education.

“Fashion is more than just apparels and accessories as technology is more than just notebooks and cell phones,” says Wilson Teo, President, TaFF. “We need to redefine the scope of the fashion industry to include its entire value chain. As such, TaFF will work towards building vibrant ecosystems for sustainability that span across the broad upstream and downstream value chain, from materials, manufacturing and brands to technology and innovative solutions.”

The bioeconomy is not without its challenges. In developing economies, for instance, consumers, businesses and policymakers must wrestle with other challenges including poverty and food security—challenges that often take precedence over sustainability. In turn, these countries are less likely to pursue initiatives like the RER and the development of cellulosic textile fiber. Yet, a new generation of leaders could change that.

“Many next generation business leaders are reshaping their growth models around environmental and social progress as they realize that climate and nature, communities and business innovation go hand in hand,” Solheim says. “For this transition to be successful, three forces must come together. Citizens must demand action, political leaders must set the vision and regulate markets, and businesses must be committed to take sustainability initiatives to scale.”

To build a future on foundations of sustainable economic growth, the bioeconomy must be inclusive, especially when it comes to accessing the technology, science and knowledge needed to fully realize the benefits. Here, too, businesses are innovating ways to integrate economic and social development with environmental protection. But scaling such initiatives requires a bigger, more coordinated effort.

“As we continue to push forth with our efforts to drive and shape the bioeconomy, we cannot do it alone,” says Tanoto. “We’ll continue to work closely with all the stakeholders throughout the supply chain, including smallholders, governments, suppliers, vendors, NGOs, customers and the local communities to ensure that we create a positive impact together.”

¹ WBCSD    ² WBCSD    ³ RER    ⁴ Bloomberg    ⁵ WWF    ⁶ UNEP    ⁷ UNECE