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How Can Your Business Benefit from the Circular Economy?

Updated: Apr 15

For centuries, our economy has relied on a process of extracting, converting, using, then disposing of resources. From the gas heating our homes to the shoes on our feet, the vast majority of things in our society have derived from this linear lifecycle. But times have changed, the world is wiser and climate change is real; Science has told us that we need to fundamentally change the way our society and economy functions. Now you see where the circularity comes into this, right?

What is the circular economy?

A concise definition by the Ellen Mcarthur foundation, suggests it is “based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems”. Essentially, the idea is to keep resources within the loop of use and minimise inputs (new resources) or outputs (waste and pollution). A simple comparison is the familiar adage ‘reduce, reuse, recycle’ – and in that order.

1. Reduce – lowering consumption is always preferable.

2. Reuse – If you consume, keep it within use.

3. Recycle – If you dispose, make sure the material is recycled.

The methodology is an elaborate development from this to counteract our beloved linear model. Why? Because our planet cannot sustain the demand for our increasing population, appetite for consumption and the vast quantities of waste we produce. This exponential trend of consumption and waste production has been only accelerated in the last 70 years due to the development of plastic. The utilisation of the circular economy principles are not an ideological scenario, they are an imperative! Every business can and should be taking action, because in the coming decades it will become increasingly essential to transition our activities to a circular model.

We’re just mimicking nature

An ecosystem functions in the same intertwined, complex method an effective circular economy does. Everything is utilised, nothing is wasted. Sustainable resources are produced, organisms consume those resources, redistribute in different mediums, breed, die, then become fertiliser for more resources. That’s where the complexity lies – ecosystems are a vast network of entities working together – meaning our society also need cooperative, systemic change to be truly effective.

The natural environment has been optimising this for hundreds of millions of years; all of our systemic problems have been figured out by nature in another context already, as demonstrated by the practice of biomimicry.

As business we must:

  • Support mass adoption from industry, to support the complex network of stakeholders who are necessary to enable a circular model.

  • Influence policy that supports this transition.

  • Innovate solutions for recovering the value from waste.

  • Do business more consciously. Proactively evaluating the entire supply chain to ensure the highest sustainable footprint.

  • Create schemes to return, refurnish and resell products.

  • Design products that can be disassembled easily after use, into core materials.

  • Select materials and processes with the least environmental and societal impact.

  • Build durable products once more, that end the ridiculous practice of planned obsolescence and inadequate quality.

As consumers we must:

  • Lobby governments and industry to take action.

  • Boycott products and brands that fail to transition.

  • Favour longevity over fashion.

  • Buy used. Share, fix and repurpose.

Look out, opportunities ahead

While it may be a novel concept in today’s society there are untold social, environmental and yes, economic opportunities for businesses that can disrupt their industries with circular models. For the innovators that are willing to make drastic changes, take risks and pioneer new approaches, they will be shaping the economies of our future. But here’s the exciting part: new, small businesses can capitalise on this opportunity, where incumbent monolithic competitors are incapable of pivoting so acutely while retaining satisfied shareholders. So entrepreneurs, start innovating! If you're looking for some inspiration, why not take a look at '30 ideas to kickstart your circular business' from the Knowledge Transfer Network.

The circular model in practice

It’s correct to assume that in many industries, an entirely ‘closed loop’ is unattainable. You inevitably require inputs and outputs, but the goal is to minimise these. Interestingly, when looking back through time you can find many examples where we previously employed circular models, but transitioned to linear models for convenience or profit. British readers; remember the milkman delivering milk in glass bottles, that would be returned and reused?

There are many companies who have already adopted a circular approach, or build their entire business model around it. One great example is Loop, who partner with retailers to facilitate a closed loop system with food and household products. It tackles the single-use packaging issue by enabling product packaging to be returned, cleaned and reused multiple times.

Another company on a unique mission is Chopvalue, who have recycled over 33 million ‘disposable’ chopsticks. They have created a system whereby providing eateries with a chopstick supply, on a recurring membership. All used chopsticks are returned to the company, who then upcycle them into home furnishings – by a network of local makers. Arguably the restaurants should simply adopt reusable chopsticks, but they have still received a good response to their circular business model.

Further reading

If this topic interests you, take a look at the following links for more substantial reading and also online courses.

1. Ellen Macarthur foundation - pioneering the circular economy

3. Ellen Macarthur foundation online course

4. TU Delft online course

5. World Economic Forum - frequent articles on the subject.

6. KTN - 30 ideas to kickstart your circular business


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