To support the transition to the circular economy, governance, regulations and business models will play a crucial role. More importantly, circular business models (CBMs) would allow the retention of an asset at its highest value over time and support enhancement of natural capital. Different CBMs will be required at different stages of a lifecycle of an asset and may work independently or collaboratively. Successful implementation of these business models will require action from designers, suppliers, service providers, contractors and end-of-life companies by sharing materials, systems, energy, as well as information and services.
The circular economy offers a new way of looking at the relationships between markets, customers and our use of resources. It uses innovative new business models and designs, disruptive technologies and reverse logistics to transform the current ‘take, make, dispose’ economic model. Circular initiatives work to three principles of designing out waste and pollution, keeping products and materials in use and regenerating natural systems.
Highlighting that many retailers are already tapping into circular economy thinking, this report is the output of a Collaborative Project carried out by Arizona State University, Cranfield University, eBay, Kingfisher, PA Consulting, Philips, Stuffstr and Wrap.
All societies produce waste, though its characteristics and what happens to it depend on cultural, economic and political factors at local, national and global scales. New business models, technological innovations and social enterprise have the potential to reduce waste. Policymakers have a key role to play in supporting these efforts by fostering better communication between stakeholders; through regulation that prioritises reuse and quality recycling; and by encouraging resource efficiency through education, research and manufacturing initiatives.
Waste nationally and globally is increasingly problematic and challenging to policymakers. It is a problem that is increasing in scale and scope. It matters to all of us for a series of reasons:
There is simply so much waste. In a country with a small land area and a large population, the sheer bulk of waste is in and of itself a problem;
As humans congregate in cities around the world, the production of waste has become highly concentrated and that creates particular challenges for its collection and disposal:
Much waste is harmful. The scale of that harm has become global. It harms both humans and the other species with which we share the planet. That harm comes in many forms.
In a circular economy, materials are more durable and easier to repair, reuse and recycle while waste is turned into a resource. In addition, processes from production to waste management become more resource efficient. Innovative business models enable companies to create value by selling services rather than products. Digital technologies will be pivotal in bringing about this systemic change. The European Union has to make the most of digital solutions for the benefit of a circular economy. This requires addressing the barriers to their uptake, enabling the free flow of data across borders, fostering trust in the data economy, and maximising synergies between the digital and circular economy agendas.
Our world economy is only 9.1% circular, leaving a massive ‘"circularity gap". This alarming statistic is the main output of this first Circularity Gap Report, in which we launch a metric for the circular state of the planet. The Circularity Gap Report provides a framework and fact-based to measure and monitor progress in bridging the gap, year on year. Being able to track and target performance via the Global Circularity Metric will help us engage in uniform goal-setting and guide future action in the most impactful way. Closing the circularity gap serves the higher objective of preventing further and accelerated environmental degradation and social inequality. The transition to circularity is, therefore, a means to an end.
The circular economy is attracting significant interest worldwide, as evidenced by the numerous government strategies, business commitments and partnerships devoted to its development. At the EU level, the Action Plan for the Circular Economy and several other policy documents have demonstrated a strong commitment to move towards a low-carbon and circular economy. While the calls for a new economic model grow louder, it is clear that the transformation of markets and industries on a large scale will not be an easy achievement. It will require well-designed and ambitious policies to foster the transition as well as new business models. Against this background, CEPS brought together executives from major multinational companies as well as representatives of business associations and others.
Transforming the linear economy, which has remained the dominant model since the onset of the Industrial Revolution, into a circular one is by no means an easy task. Such a radical change entails a major transformation of our current production and consumption patterns, which in turn will have a significant impact on the economy, the environment and society. Understanding these impacts is crucial for researchers as well as for policy-makers engaged in designing future policies in the field. This requires developing an in-depth knowledge of the concept of the circular economy, its processes and their expected effects on sectors and value chains.
This paper reviews the growing literature on the circular economy with the aim of improving our understanding of the concept.
As is the case with Mr. Jourdain, who was unaware of what he was writing, industries involved in packaging have already implemented the circular economy model. Results in material recycling are relevant proof thereof. Industries are not getting involved in this process out for ideological reasons but because it often makes sense from an economical point of view. Since we were lucky enough not to be starting from scratch, we offered a tangible approach through illustration for each main material and/or packaging category from: glass to paper, cardboard, food cartons, steel, aluminum, wood, and plastic materials. This also includes the energy consumed by the different materials and the waste produced by all the different activities involved.
The report highlights real-life and practical examples on how to rethink the way we create the built environment, one that currently uses 40% of all extracted minerals worldwide. It offers a systematic view of the sector and identifies clear levers for circular change. With learning by doing in mind, Circle Economy and ABN AMRO share the insights gained during the build of the first fully circular building in Amsterdam’s financial district: ABN AMRO’s Cirl pavilion. With this report, Circle Economy wants to highlight the possibilities in the built environment sector – with all positive economic, social and environmental consequences that a circular building and planning process entails. This report follows the launch of Circle Economy’s Circle Built Environment Programme.
