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.
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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 to identify new ways of working to generate value, discover new business opportunities and reduce resource costs - strategies which fundamentally change the relationship these retailers have with customers.
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. As a multi stakeholder model, a circular economy has the ability to unite a global community behind an action agenda, engaged and empowered both collectively and individually. Its systemic approach boosts capacity and capability to serve societal needs, by embracing and endorsing the best humankind has to offer: the power of entrepreneurship, innovation and collaboration.
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, non-governmental organisations and research institutes to form a Task Force charged with tackling the immense challenges associated with the circular economy. This report is the outcome of their deliberations. It analyses the key obstacles that need to be addressed, explores numerous policy areas at the EU and national level where support can act as a catalyst for market transformation, and puts forward actionable policy recommendations.
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 well as its various dimensions and expected impacts. On the basis of this review, it attempts to map the processes involved and their application in different sectors.
The paper suggests that research on the circular economy is currently fragmented across various disciplines and there are often different perspectives and interpretations of the concept and the related aspects that need to be assessed. This fragmentation is also evident in the available studies that adopt different approaches in calculating the impacts, which makes efforts at comparing the results from different sources very challenging.
Finally, this paper suggests that there is limited information on the indirect effects on the economy (e.g. impacts on the value chain or changes in consumption spending patterns) as well as the social impacts of the circular economy transition.
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. By digesting some of the best existing or developing practices, we wish to make the circular economy model a fully-fledged part of the packaging sector.
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, a new programme that builds on the expertise the organisation has gained over the last four years in identifying and implementing circular strategies across industries.
The following publication provides an overview of why the cement and concrete industry is central to the circular economy and what can be done to leverage the opportunities.
The report identifies ten attractive circular innovation and investment priorities for Europe until 2025, totalling €320 billion. Despite the favourable financial context, investment in circular economy opportunities is still generally too low. The Foundation's previous research Growth Within outlined a long-term circular economy vision for Europe; this new report identifies the most important investment opportunities along with the policy reforms and business actions needed to unlock them. The report focuses on the mobility, food and built environment value chains, which together represent 60% of consumer expenditure and 80% of resource use.
In a circular economy, growth comes from ‘within’, by increasing the value derived from existing economic structures, products and materials. This major report quantifies the benefits for Europe – in terms of growth, household income, and environmental outcomes – of adopting a circular development path compared with our current linear one. Incorporating in-depth analysis of three of Europe’s largest basic needs, mobility, food and the built environment, the report provides a vision of how the circular economy could look, and highlights wide-ranging implications for government and business leaders.
The report describes the concept of the circular economy and outlines its key characteristics. It draws attention to both the benefits and challenges in transitioning to such an economy and highlights possible ways to measure progress.
The report explores the circular economy from a product perspective, applying a systemic approach and transition theory. Drivers of product design and usage are discussed in the context of emerging consumption trends and business models. For governance to be effective, it has to address the product life-cycle and the societal context determining it. Indicators and assessment tools are proposed that can help fill the current data and knowledge gaps.
The Circular Phone report provides practical answers to common financing pitfalls for circular businesses, using Fairphone as the real-life example. All learnings and contract templates created during the project are now available as open source and ready for other companies to apply to their products.
This report gives companies the tools to jumpstart and run circular business models where ownership of products is retained to a certain degree. This incentivises companies to create high-quality and durable products, while customers enjoy the performance of a product without the hassle. So far, businesses striving to implement “Product-as-a-Service” models have had the challenge of reconciling the need to find financing parties with the complexities of their own business model.
To achieve a financeable model for the Circular Fairphone Service, the Community of Practice created a blueprint for Fairphone’s business model. Through the creation of a legal template – a 1st Circular Service Contract- and a financial cash flow tool, the group has proven that the gap between the businesses and financiers can be bridged. One of the other concrete and practical outcomes was a 5-year cash flow projection that enables financiers to assess the benefits and risks of their investment.