What is a Circular Economy?
A circular economy is a production and consumption model that aims to eliminate waste. It involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products for as long as possible. In our current economy, we take materials, make products.. and, eventually, throw them away. This process is referred to as ‘linear’.
Circularity is based on three fundamental principles:
- Design out waste and pollution
- Keep products and materials in use
- Regenerate natural systems
A Brief History of the Circular Economy
The concept of circularity is by no means new. The idea of circular production first appeared in the 60’s with the Economist Kenneth E. Boulding, writing about a “cyclical” system of production. The term “circular economy” first appeared in 1988 in the book “The Economics of Natural Resources”. By 2014, the EU first introduced its vision of the circular economy – with a new Circular Economy Action Plan launched in 2020 that “shows the way to a climate-neutral, competitive economy of empowered consumers”.
Why is Circularity Gaining Traction?
Today, circularity is gaining significant momentum. Our collective attention is now on the environment as climate change impacts become more noticeable. Carbon reduction targets (both voluntary and mandated) are being embraced by businesses of all shapes and sizes. What’s more, consumers are more aware of sustainability. New research suggests two thirds of shoppers stop to think about sustainability before making a purchase, while over half consider first if a business “gives back to society”. Four in 10 shoppers say that some or most of their purchases are now from brands that give back to society or the planet. (Source)
IKEA – an example of CE at scale.
IKEA is one well-known brand that has embraced the concept of circulatory. This is no small feat for €41BN giant with over 400 stores globally and who, in 2021, welcomed some 5BN visitors to their website. They are also responsible for approximately 1% of world commercial-product wood consumption, making it the brand of the largest users of wood in the retail sector.
IKEA’s ambition is to become a climate positive business by 2030 and, to help them get there, they are shifting to a circular business model. For IKEA, this means “..using more renewable and recycled materials, striving to eliminate waste in operations and changing the way we design products:”. They also cite a commitment to: “Regenerating resources, protecting ecosystems and improving biodiversity”.
To track their progress, IKEA have set a range of targets which will help them monitor performance and give their team direction as they work towards their targets. You can read about these in detail at: https://about.ikea.com/en/sustainability/a-world-without-waste
What about Service-based businesses?
While at the heart of the circular economy is product design, reuse and recycling, the concepts can also be applied to service-based businesses – circular sourcing, resource efficiency, reuse and redistribution of consumables are just a few of the areas that can be applied. The principles of circulatory are, ultimately, an effective tool in helping us shift more quickly toward a Net-Zero economy.
To find out more about how we can help you plan for Net-Zero please drop us a line or give us a call on 020 4441 3696.
Further Reading & Resources:
https://sustainabilityguide.eu/sustainability/circular-economy/
https://circularityinaction.com/
https://www.circularonline.co.uk/
https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en