The circular economy model focuses on reducing waste and reusing finite resources and by doing so extending their life cycle. It is a new way of thinking about the economy that aims to create a more sustainable and regenerative system that benefits us and the planet. A circular economy helps us think of resources and raw materials as finite, and not infinite. This involves recognizing the value of natural capital and designing systems that preserve and enhance natural resources from the onset.
This means that in a circular economy, businesses should think of designing products that use fewer materials from the start and also that can be repaired or re-purposed in the future. Profits (staying true to Friedman’s definition of business) are then made from the same products, for which a lot of resources have already been used. The below image from the Porto Protocol shows how a circular economy works, emphasizing the fact that when a product arrives at its final destination it should be recycled so need for using new materials is reduced.
What is the difference between a circular and linear economy?
The traditional linear economy follows a ‘take-make-dispose’ model, where raw materials are extracted from the earth, used to create products, and then discarded once they are no longer needed. You can see how this system is inherently wasteful and unsustainable, as it relies on finite resources and creates a large amount of waste that is often not properly disposed of. The fashion industry is one such example. Whilst it produces a lot of very cheap clothing, it comes at a huge cost to the planet and to the people employed in these industries. If the t-shirt you are buying comes at a cost for you of £5 and the business needs to make a profit, how much do you think the cost of materials and labour was in the first place?
In contrast, the circular economy is a closed-loop system, where waste is minimized and resources are used and reused as much as possible and profit is made from the same products. If we stick with the fashion example, this will mean that the leading brands are also creating second-hand marketplaces for their audience or offering repair services for their clothing (We love you Patagonia). This model is already proven with places like eBay, Vinted, and Facebook Marketplace, so why are big brands reluctant to offer this? Perhaps they don’t want to take focus away from new lines or perhaps the sheer size of their market and the logistics involved in creating such a marketplace are too complicated.
What are the principles of a circular economy?
The circular economy is based on three main principles:
- Designing out waste and pollution
- Keeping products and materials in use
- Regenerating natural systems
Examples of circular economy solutions from different industries
It’s one thing to talk about it as a circular economy, but another to implement it. Theory always sounds so much easier than practice. Below, I have included a few examples of brands from different industries that have adopted sustainable solutions and have aimed to keep products and materials in use, adhering to the principles of a circular economy.
- The Danish system of returning and reusing bottles at supermarkets prompts people to recycle and keep the streets clean. I lived in Denmark for three and a half years, and I have to tell you, this system works!
- IKEA’s mission is to become a circular economy and climate positive by 2030. One of their top goals is to design circular products. They have identified over 9,500 products that are suitable for the circular economy and also plan to create markets for second-hand items.
- Patagonia has been at the forefront of climate activism for a long time, designing and creating products from sustainable materials and creating timeless pieces that you won’t want to throw away. Their dedication shows in not only speaking about the subject but also delivering on their promises and working hard to make a difference.
- Innovation brands like Discarded Spirits use discarded fruit to make delicious banana peel rum, chardonnay vodka, and vermouth. They are taking fruit that would have otherwise ended up in landfills and therefore creating more methane (which is worse for the environment than carbon dioxide), and recreating some of the nation’s favourite spirits.
- Osprey backpacks offer a repair surface and also sell second-hand products on their website. This shows that they value their products and want to find a home for their pre-loved backpacks.
Other examples of circular economy initiatives include composting and waste reduction programs, creating products from recycled materials, the use of renewable energy, the development of sustainable supply chains, and the creation of new products and services that are designed with the circular economy in mind.
What are the benefits of a circular economy?
By reducing waste and minimizing resource use, the circular economy can help to reduce greenhouse gas emissions and other forms of pollution, which can help to mitigate the effects of climate change. It can also reduce the reliance on finite resources, such as fossil fuels, and create new opportunities for job creation and economic growth. In this sense, a circular economy offers a plethora of benefits:
- Protecting the environment
- Reducing the use of finite raw materials
- Creating jobs
- Providing benefits to the consumer
- Opening new business opportunities
What are the challenges facing a circular economy?
While the circular economy has many benefits, there are also challenges to implementing this model on a large scale. One of the main challenges is changing the way we think about consumption and production. In a linear economy, the focus is on producing as much as possible, and also on consuming as much as we can. This is literally how the GDPs of countries are measured.
On the other hand, in a circular economy, the focus is on reducing waste and maximizing resource use. This means less but more conscious shopping and requires a fundamental shift in the way we approach economic growth and development. This is why promoting circular behaviour and continuing to talk about sustainable solutions is crucial to help consumers understand there are already brands they can support.
Another challenge that the circular economy is facing is alignment with business interests, especially around who is going to heavily invest and foot the bill in research and development to build new infrastructures and improve existing supply chains.
What can we do as consumers to help a circular economy become the norm?
The first and foremost thing we can do is educate ourselves on the matter. As Nelson Mandela once said, ‘Education is the most powerful weapon you can use to change the world’. Beginning to familiarise yourself with this topic and the complexities that come with a circular economy and the challenges that companies are facing will help you understand how intricate but essential this model is.
Looking for companies that are already implementing a circular approach to their business and are striving to improve their supply chain and also help share the message with their customers, should be the first step. You don’t have to be a customer to help these businesses grow. You can help them by sharing their story and their products with their friends, liking their social media posts, and sharing their journey. This can open the floor to new audiences and help them grow their business and by doing so, increase their environmental impact. For example, I came to know the brand Discarded Spirtis through my work and I instantly fell in love with their mission and journey to make waste beautiful again. I bought a number of their products and when I hosted a party people loved their Banana Peel Rum. They didn’t know it existed and loved it so much, they are now purchasing it instead of the usual Banana Rum they used to buy. This only cost me the price of the products but by sharing their story with my friends, they have grown their brand presence and won a new customer. I do the same with any other sustainable product I try and will aim to share my journey with you all on this platform.