June 1, 2024. Sustainability, circular economy, social license to operate and energy efficiency are fundamental elements in the construction of futures in which companies collaborate with the construction of livable futures and social progress in the region. The industry has been adapting to best practices both for competitiveness and for social and environmental awareness.

Sustainability and the circular economy are transforming the way industries operate, and Costa Rica is no exception. Companies from various sectors are adopting innovative practices that not only promote environmental protection, but also generate significant economic and social benefits. Why is this shift towards sustainability so crucial and how is it being implemented in Costa Rica?

The circular economy is a model that seeks to redefine the concept of growth, focusing on positive benefits for society as a whole. Unlike the traditional linear economy, which follows the pattern of produce, consume and discard, the circular economy proposes a continuous cycle of use and reuse of resources. This model not only reduces the amount of waste, but also creates opportunities for economic development and innovation.

Some companies and industries in Costa Rica have been moving towards sustainability by applying circular economy for several years and there are already successful results that result in better management of resources or better disposal or use of waste.

The Chamber of Industries of Costa Rica holds a Sustainability Congress every year where companies are updated on the concepts and practices that help to integrate sustainability in business strategies.

Sergio Capón, president of the Costa Rican Chamber of Industries, explained that they seek to analyze, propose and follow up on initiatives to support the country’s competitiveness and that they have “promoted the holding of this congress as a space for the exchange of ideas for sustainable industrial development”.

“When we talk about sustainability as a model of competitiveness, one of the core issues for any strategy to be successful is responsibility, who does what?” explained Capón, putting responsibility, numbers and actions to sustainability plans.

According to Capón, “globally, private and public sector organizations face a great challenge: to integrate sustainability into our management in order to generate economic growth in a competitive and responsible manner with a positive impact on society and the planet.

Luis Mastroieni, Director of Corporate Relations at Dos Pinos, explained that “if the triple impact is not part of the business strategy, it does not work”. For Mastroieni, it is essential that the circular economy be part of a sustainability strategy that considers economic, social and environmental impact.

He stressed that board commitment is the first step towards a sustainable business, although economic returns may take time to materialize.

Dos Pinos has implemented forceful actions to transform itself and be part of sustainable development, ensuring that its circular economy practices generate long-term return and meaning. “Getting on track for long-term business profitability” was one of Mastroieni’s main focuses, highlighting that the commitment of the board of directors is essential for these initiatives to thrive.

For his part, Eduardo Ordoñez, Image and Corporate Affairs Manager of Grupo VICAL, argued that the circular economy must be designed intentionally. “The linear economy is to destroy value, the circular economy is to create value, but it must be designed to be circular,” he said. Ordoñez emphasized the importance of responsible consumption and efficient use of resources, which not only reduces costs, but also protects the environment.

Grupo VICAL is dedicated to intentionally designing products to be circular, ensuring responsible consumption and efficient use of resources. “You can’t make circular what is already produced,” said Ordoñez, noting that the company works on repair, reuse and recycling to protect the environment and reduce costs.

The commitment of large corporations is also evident in the case of Philip Morris International (PMI). Paulina Villegas, PMI’s Director of Sustainability for Latin America and Canada, indicated that sustainability is integrated into the company’s business strategy.

“If we do not integrate sustainability into our business strategy, it is difficult for us to make progress on our objectives,” she said. PMI has implemented green design principles and effective waste management solutions, even linking 30% of its executives’ compensation plan to meeting sustainability goals.

FIFCO, a company with a triple bottom line approach and ESG (environmental, social and governance) commitments, is also at the forefront of implementing sustainable practices.

Gerardo Miranda, Corporate Safety, Health and Environment Manager, explained that its circular economy approach encompasses everything from post-industrial waste to post-consumer waste.

“Our circular economy approach has to do with FIFCO’s entire value chain,” Miranda said, highlighting the importance of recycling and reverse logistics processes.

FIFCO works in reverse logistics and packaging recycling, and expects to increase its circularity rate from 45% to 75% by 2027, according to the Ellen MacArthur Foundation.

In the industrial sector, Geocycle Costa Rica has developed a Large Industrial Decarbonization Project, transforming municipal waste into useful inputs for cement manufacturing. Wilkie Mora Bolaños, General Manager of Geocycle, commented that “the circularity of what we do is the answer to the waste challenge”.

This project, in collaboration with Holcim, manages municipal and industrial solid waste, creating a co-processing cycle that produces cement used in the construction industry. In Costa Rica, only 10 to 12% of municipal waste is recovered, a challenge that Geocycle is actively addressing.

Elizabeth Valverde, Public and Corporate Affairs Manager of Nestlé Costa Rica, emphasized the co-responsibility of all actors in society in sustainability. “Sustainability is to guarantee the continuity of our company, or in the case of all of us, the survival of the planet,” Valverde said.

Nestlé Costa Rica is committed to reducing the impact of waste and promoting sustainable practices, with an overall goal of zero net emissions by 2050.

Nestlé Costa Rica has identified that 59% of its plastic packaging is flexible and cannot be recycled through conventional methods. To address this, the company has implemented strategies to reduce the impact of waste, educate the community, and foster partnerships that promote sustainable practices.

The implementation of the circular economy and sustainability in Costa Rican industry is not only a path towards a greener future, but also a strategy that benefits society as a whole.

Circular economy and sustainability is not a goal achievable by one department or one person within companies, but requires the alignment of both the company’s collaborators, its stakeholders and value chain, as well as its initiatives and objectives.

Companies are adopting an integrated approach that promotes innovation, reduces costs and protects the environment. It is crucial that companies in Latin America not only seek financial success, but also commit to social and environmental development.

The importance of sustainability for companies is not only reflected in their internal practices and the economic benefits they can generate, but also in their relationship with the community and the environment in which they operate.

Urs Jäger, sustainability expert, research director of VIVA Idea and professor at INCAE Business School, stresses the importance of obtaining and maintaining the “social license to operate” as a critical aspect for modern companies. According to Jäger, “social license to operate refers to the continued acceptance and approval of a company or project by the local community and other stakeholders”.

For Jäger, social license is not a formal document, but a perception that is built through concrete and sustainable actions. “Companies must demonstrate a genuine commitment to the well-being of the community and the environment,” he said. This involves not only complying with environmental regulations and standards, but also actively engaging in projects and actions that benefit society.

In this context, transparency and effective communication play a key role. Jäger stated that “companies need to establish open and honest communication channels with all their stakeholders, including employees, customers, suppliers and the community at large”. This communication must be based on trust and transparency, allowing all parties to feel heard and valued.

In addition, Jäger emphasized the importance of companies taking a proactive approach to their sustainability strategies. “It’s not just about reacting to society’s demands and expectations, but anticipating them and leading by example.” This approach not only enhances the company’s reputation and legitimacy, but can also open up new business opportunities and strengthen its competitive position in the marketplace.

VIVA Idea is an organization committed to sustainable development in Latin America, using knowledge to enhance impact through research and the creation of tools that allow scaling particular action.

With more than a decade of research in the region, VIVA Idea proposes solutions based on a deep knowledge of the context, designed specifically for companies.

These strategies integrate sustainability as a competitive advantage, based on the premise that actionable knowledge and alternatives to current challenges must be generated from the context, using research and technology.

The organization also offers digital tools that allow it to provide consulting services to companies and stakeholders in various locations in Latin America. These tools help companies understand where their impact is most needed in the locality, how to align related actors, even if they have different objectives, and how to understand the company’s impact potential.

Arturo Rodríguez, Product Manager at VIVA Idea, explained that the organization offers tools and methodologies that help companies in their sustainability strategies.

One of them, for example, is Propel, an application designed to guide companies in the creation of action plans based on business strategies.

“Propel helps companies and organizations understand what their impact potential is and guide the conversation around impact and sustainability,” said Rodriguez.

This tool identifies risks and opportunities for impact, improving stakeholder relations and encouraging the adoption of sustainable practices.

The work of organizations such as VIVA Idea is essential to support companies in this process, ensuring that sustainability becomes a fundamental pillar of their business strategy and a tangible benefit to society as a whole.

VIVA Idea offers its services in three lines of work: consultancies in business strategies especially towards applied sustainability and strategic alignment, community or value chain strengthening of the company or organization, and actionable trainings with modular courses designed and adapted to the convenience of its clients.