EBF SUSTAINABLE FINANCE ROUNDUP ARTICLE 

Interview with Massimiano Tellini, Head of Circular Economy, Intesa Sanpaolo Innovation Center

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BRUSSELS, 30 November 2021

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Massimiano Tellini, Head of Circular Economy at Intesa Sanpaolo Innovation Center, shared some insight on how the Circular Economy Lab fosters innovation by bringing together all the right stakeholders to help companies achieve a circular business model.

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• How did the Circular Economy Lab come to fruition? What are its key objectives?

The Circular Economy lab was created in 2018 through a strategic agreement between Intesa Sanpaolo and Fondazione Cariplo and is run by Intesa Sanpaolo Innovation Center in collaboration with Cariplo Factory. The Circular Economy Lab has the ambition to support concrete action around the topic of circularity. The objective is to provide concrete solutions for companies aiming to become circular; this is achieved through the three pillars of the Lab, which are: connection, innovation, and education. The Lab acts as a convening place where we engage with companies. Then through the Intesa Sanpaolo Innovation Center first and the bank of Intesa Sanpaolo at a second stage, the companies interact with the broader community, including universities, SMEs, start-ups, and many others. Intesa Sanpaolo serves as an intermediate platform to foster these relationships and inspire innovation. The Lab uses this process to guide companies through the re-design of their business models. It differs from the traditional banking approach as the Lab is involved not in providing financing (which is in the exclusive domain of the bank) but rather in designing innovative projects which may then translate into new investments to be made. Thus, the Lab engages with clients before any financing need is identified, and explores opportunities with them in a variety of creative ways, including workshops.

• What are some of the most current trends and opportunities for companies in the sphere of the Circular Economy?

First of all, circularity does not focus mainly on the environmental component but rather on a business model’s re-design, which itself is enabled by technologies and regenerative approaches which are aimed at decoupling economic and social development from the recursive exploitation of finite natural resources and regenerating the natural capital. There is, indeed, a substantial difference between the aim of trying to minimise a company’s detrimental impact on the environment and that of becoming a positive impactful player engaged in innovative business practices such as research, innovation investments, and re-designed relationships among other value chain actors. A concrete example of this type of innovative interaction can be illustrated through the story of an Italian wine company that now innovatively manages its secondary raw materials thanks to a strategic collaboration with a relevant Italian regional utility company – which resulted in a joint venture able to produce a bio-based polymer. This is just one of many examples of how the Lab can foster collaboration aimed at promoting circularity.

• What are some of the biggest challenges perceived by companies (whether they be large corporates, SMEs, or start-ups) that wish to transition to a Circular Economy (CE) model?

The first big challenge is truly understanding what the circular economy means. Currently, the definition commonly attributed to the circular economy is limited to waste management. Therefore, the first challenge for entrepreneurs and investors is comprehending what circular economy means in terms of opportunities and potential. The Intesa Sanpaolo Banking Group is offering standard finance with an innovative approach, which, through circular economy screening criteria co-designed in close collaboration with the Ellen MacArthur Foundation (the most authoritative global player promoting the acceleration of the systemic transition towards the CE) seeks to orient capital towards truly CE innovative projects. In addition to the financing phase, innovation – more specifically, open innovation – is where the Circular Economy Lab plays a pivotal role by helping the Bank’s clients engage in ecosystem interaction with different players to conceive and possibly re-design their business practices and models. Another challenge is disseminating the correct culture and knowledge concerning this new economic paradigm to nurture new generations of entrepreneurs, leaders, and talents needed to bring the circular economy transition to life.

• How has COVID-19 impacted work towards a circular economy? Has the pandemic slowed down or accelerated the transition?

COVID-19 has had profound and pervasive consequences on every domain of society and the economy. The world of financial institutions is now coming to terms with a long-overdue rethinking exercise about its potential to be a driving force for good and fair prosperity for all. When you look at the effects of COVID across regions, you see that people everywhere have had time to pause and reflect, which has resulted in companies going back to the basics and focusing on positive impact while doing business. The pandemic has exponentially accelerated the transition that was already ongoing by exposing the risks of typically linear business, market & economic activities, for example by impacting value chains and availability of natural resources and industrial raw materials. In this respect, circularity is innovative in nature and philosophically different from sustainability: the latter strives to make the (current linear) system more sustainable, whereas circularity aims at changing the system entirely!

Ultimately, from the perspective of climate change and biodiversity loss, the current systemic crisis cannot be faced alone, given the unprecedented scale and complexity of the adverse effects being generated. This is why the approach adopted for the activities of our CE Lab has been designed around the open innovation and pre-competitive collaboration principles, so as to make it the partner of choice for the evolution of the “Made in Italy” brand towards the CE paradigm.

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