WEBVTT

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DONATO MASI: Good
morning, everybody.

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My name is Donato Masi.

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And I am an assistant professor
of supply chain management

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in the University of Warwick.

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My research is focused
on sustainability.

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And I've been focusing
both on the environmental

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and on the social side
of sustainability.

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And recently I've been
studying and making

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research on the
circular economy,

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and in particular on the
role of supply chains

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in the circular economy.

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So today I will
answer some questions

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from my PhD student Mucahit.

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Hello, Mucahit.

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MUCAHIT OZDEN: Hi,
Donato, how are you today?

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DONATO MASI: I'm fine.

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Do you want to introduce
yourself and your research?

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MUCAHIT OZDEN: Hello
there, learners.

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Welcome to the last
week of Supply Chain

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in Practice course.

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I'm Mucahit Ozden,
and doing PhD in WMG.

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And my research interest
is sustainability.

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And Donato Masi is my
supervisor during the PhD.

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DONATO MASI: So, Mucahit, do
you have some questions related

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to the circular economy?

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MUCAHIT OZDEN: Yes.

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Let's start with this
week's key learning

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points, our, like,
alternative strategies

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to manage product returns and
the idea of circular economy,

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and the last section of
the module this week,

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challenges learners to think
about the future of supply

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chain.

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So I would like to start
with a general question.

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From your perspective, how do
you define circular economy?

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DONATO MASI: OK,
well good question,

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because there are
several definitions

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of circular economy, both
in the scientific literature

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and among practitioners.

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A very well-known
definition is the definition

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of the Ellen
MacArthur Foundation

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that defines the
circular economy

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as an economic framework
restorative and regenerative

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by intention and design.

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In simple words,
the circular economy

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is about finding new
ways of generating value

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while constantly creating
flows with the resources

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that we already extracted, so
without employing and using

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new resources.

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MUCAHIT OZDEN: Mm-hm,
good definition.

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And would you like
to explain to us,

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why are we talking
about circular economy

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2.0 in these days?

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DONATO MASI: Oh yes,
interesting question.

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Well we talk about the circular
economy 2.0 because initially,

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the focus of the
circular economy

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was purely environmental.

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So the focus was trying
to minimise waste,

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trying to minimise the
consumption of resources,

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trying to minimise the
amount of emissions.

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And progressively
it was evident how

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the social side
of sustainability

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had been neglected.

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So the circular
economy 2.0 is the idea

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of incorporating also the
social side of sustainability

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in this new economic framework,
guaranteeing fairer working

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and living conditions for
all the people involved

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in the economic framework.

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MUCAHIT OZDEN: Um-hm.

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So as you said, circular
economy was neglecting

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social side of sustainability.

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And now with the the
circular economy 2.0,

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it also covers the social
side of sustainability.

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And as you mentioned
in the definition,

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there is a change in
the economic framework,

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from linear to circular economy.

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And why organisations should
change from linear to circular

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economy.

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What are the main benefits of
this economic transformation?

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DONATO MASI: Well,
there are, let's say,

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two types of benefits related
to the circular economy.

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So the first class of
benefits are the ones

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that regard directly the
company and are related

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to the increase the resilience
that a business model based

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on the principles of the
circular economy implies.

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Indeed today, one of the key
risks, one of the key risks

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that the company faces is the
risk related to the access

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to raw materials needed
to manufacture the goods.

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In fact, you know that
today more and more

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companies are competing
for the same raw materials.

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And the volatility of
prices is increasingly high.

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So getting access to these raw
materials could be a challenge

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and having a business model
based on the control of closed

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loop flows of materials
is a, let's say,

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an effective strategy
to minimise this risk

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and so increase the resilience
of the business with respect

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to the access to raw materials.

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Other benefits related to the,
let's say for the business,

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are for instance,
the possibility

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of branding the company
as a green company--

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and this is more and more
important for the consumers--

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but also, the possibility
of intercepting

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some of the trends
of consumers that

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are progressively
shifting from willing

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to purchase a goods to
willing to purchase a service.

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Because most of
the business models

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based on the
circular economy are

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based on the idea of
getting access to a service.

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And so businesses that innovate
their business model following

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this idea of access to a
service can, let's say,

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both comply with the principles
of the circular economy

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and follow one of the
trends of the consumers.

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But apart from these, let's say,
more business-related benefits

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of a circular economy,
there are several benefits

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that are related to the
protection of the environment,

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so benefits not only
for the business,

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but for the whole society.

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Because, as we know,
a circular economy

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implies a reduction of
emissions, reduction of waste,

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reduction of the consumption
of resources, and so on.

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So I would say that there
are these two big types

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of benefits, the
business-related ones

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and the
environmental-related ones.

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So it's definitely worth trying
to shift to a circular economy.

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MUCAHIT OZDEN: In
light of what you said,

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it's obvious that
transforming from linear

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to a circular economy
is beneficial in terms

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of becoming more sustainable,
for example, as you mentioned,

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reducing virgin material usage,
and reducing the landfill

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and that kind of thing.

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But it seems that this
transformation will happen

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in long term not in short term.

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So what are the main
barriers that prevent

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us to make this shift quicker?

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DONATO MASI: Oh, well,
there are several barriers,

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so several barriers
to the transition

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to a circular economy.

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And many of them
depend on the fact

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that currently we are
in a linear economy.

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And so most of the regulation,
most of the infrastructure,

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most of the supply chains are
designed on a linear economy.

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So in order to
create a transition,

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in order to complete
this transition

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to a circular economy, we
should modify and innovate

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all of the regulations, all
of the infrastructure, all

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the supply chains, and so on.

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Let's think for this,
just to make an example.

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If we think to regulation,
it's currently,

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it's the taxes are much higher
for labour than for materials.

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So for companies in general,
it's much more convenient

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to use more virgin materials
than to use more labour,

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because the labour
implies very high taxes.

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So this is just an example.

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So if we want to
make a transition,

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we should understand
what are the elements

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of our economic framework
that are set on a linear model

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and try to modify them in the
direction of a circular economy

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model.

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Then apart from these, let's
say, structural barriers,

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there are some important
barriers related

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to the behaviour of consumers.

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So for instance, consumers
should become familiar

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with the idea of, for instance,
purchasing refurbished goods,

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because the qualities,
in most of the cases,

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is equivalent or higher than
the quality of virgin products.

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Consumers should not
give too much importance

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to the packaging of the
products that they purchase.

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They should pay attention to the
way in which they recycle waste

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and so on.

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So these are currently
the key barriers,

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in my opinion, that
limit the transition

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to a circular economy.

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MUCAHIT OZDEN: In
your explanation,

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you mentioned a
couple of stakeholders

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in your explanation, for
example, regulations,

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role of governments, and
some other organisations.

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Also I would like
to look specifically

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from the perspective of people.

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Sustainability is a
challenge for everyone.

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So what we as people can do
to support circular economy?

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What is our role to
overcome this challenge

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and shape the future
of supply chain?

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DONATO MASI: OK,
well, we already

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mentioned some of the
things that, let's say,

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people and consumers
could do in practice.

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So for instance, pick products
in shops using less packaging;

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choose things such as
refillable containers,

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for instance toothpaste,
or shaving creams,

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and so on; in some
cases, buy products

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that are guaranteed
for life so that

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are supposed to last longer.

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Other possible positive
behaviours are prefer items

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that you can bring back to
the shop after a first use.

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And this type of opportunities
are more and more

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available in the market.

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Let's say also, having a
cultural change in which it

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can be fashionable to use goods
instead of consuming them,

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so getting away from
this idea of ownership

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and the status
related to ownership.

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And then all the things
apart from, let's say,

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our behaviour as consumers,
all the things that we can do

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in terms of regeneration
of waste, so for instance,

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separate the compostable waste
from other types of waste

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or try to recycle when possible,
and try to spread this idea

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as much as possible in
the society among friends,

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among people that we know.

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Because this is a
mechanism that is

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very effective in
spreading new ideas.

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MUCAHIT OZDEN: As I
understand, our role

00:11:37.280 --> 00:11:40.130 align:middle line:84%
is so significant
in this challenge.

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So thank you very much for your
time and informative inputs,

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Donato.

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DONATO MASI: Thank you for
this question, Mucahit.

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MUCAHIT OZDEN: There with
the summary of the Week 6

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we have finished the Supply
Chain in Practice course.

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I hope that you enjoyed
and found it useful.

00:11:56.120 --> 00:11:58.520 align:middle line:84%
Thanks a lot for your
contribution as well.

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Thank you.

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DONATO MASI: Goodbye.

00:12:00.280 --> 00:12:01.830 align:middle line:90%
MUCAHIT OZDEN: Goodbye.

00:12:01.830 --> 00:12:07.467 align:middle line:90%