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Why do we need a circular economy?
The Basics

Why do we need a circular economy?

The Basics is a series exploring the concepts and individuals essential to purposeful business.
2nd Mar 2022

We’re all trying to be less wasteful. We bring the bag, we buy the reusable water bottle, and we recycle every scrap of cardboard. There’s been the emergence of bring-your-own container stores, and companies switching their office plastic for vegware. And while every little counts, the reality is that individual action alone isn’t enough. Change must also occur at a systemic level.

Systemic change: what is the circular economy?

The circular economy is a lot more than reduce, reuse, recycle. It’s a real challenge to designers, manufacturers and businesses to step up their game when it comes to planning for long-term sustainability.

Imagine a manufacturing process that doesn’t dump £140 million worth of clothes into landfill every year. What if, when a product reaches the end of its life, its materials are not thrown away, but are instead broken down and repurposed into something new again and again? 

Image credit: https://zerocarbonhubs.co.uk/circular-economy-1.html

Why is it important?

At the moment, our economy is linear. We take what we need from the planet, we produce something we want, and then when we’re done with it, we throw it away. 1.45 million tonnes of electrical waste are produced in the UK each year, while the average piece of clothing is worn only 14 times before it’s considered ‘old’ – the result is a culture of high turnover, low quality, quick-to-make and even-quicker-to-chuck products. It doesn’t take an economist to realise that this way of living has an expiration date.

We need a new, resilient, long-term solution to our take-make-chuck model, and the circular economy provides just that. Circularity means that we can keep making products without our landfills expanding and our natural resources drying up. It’s time to change the system, and bend the line round into a circle.

When did the term start being used? 

The term ‘circular economy’ was first used in a 1988 paper by Allen V. Kneese, but the idea of a cyclical system of production has appeared in books and research since the 1960s. The term gained traction in the last decade thanks to the Ellen MacArthur Foundation, who have partnered with schools and businesses to kickstart the transition from linear to circular. The EU even launched its New Circular Economy Action Plan in 2020, indicating that change has already begun.

“We know our future doesn’t work long term. But in a circular economy it does.”

Dame Ellen MacArthur

How do we do it?

It’s all about designing out waste and designing in sustainability. If products are built with the intention of being dismantled and reused, making their existence circular becomes far easier. EMF has outlined three principles to guide our move to a circular economy:

Eliminate waste and pollution. This is all about designing things out. Designing our products and our processes so that we’re no longer creating rubbish, releasing pollution, and producing waste at any point in the manufacturing process.

Circulate products and materials (at their highest value). This is about designing for reuse, thinking about how products are manufactured, and improving efficiencies. How can we design these components to last? How can we disassemble these products? How can we recirculate the materials back into the economy after the product has reached the end of its life?

Regenerate nature. We need to start designing in line with the planet. Not only is it about choosing renewable energy over non-renewables, it’s about maintaining and supporting natural systems. Can our manufacturing processes involve returning nutrients to the soil? Can we do something to protect ecosystems in the areas we work?

But what about the next time Apple releases a new iPhone? 

The circular economy doesn’t mean you can’t have new stuff. We don’t have to give up the luxuries of a linear economy, like being able to get a new phone or buy a new outfit. Take Patagonia for example – a whopping 68% of their fabrics this season are made with recycled materials, plus they scrutinise their own supply chain with their Environmental Responsibility Program

Or Gerrard Street, a brand that makes cutting-edge headphones that you can rent through a subscription-style contract. These headphones are modular, meaning that they’re designed to be taken apart – if one part breaks, you can order a new part for free and send the old part back to be repaired or recycled. If we’re designing things from their conception so that they can be used again, whichever products we buy will be able to be reused once we have finished with them.

“If that material that’s put into that product is recoverable, then there’s no reason you can’t have the latest model. It’s about design.” 

Dame Ellen MacArthur

What’s in it for businesses?

Implementing more circular processes into our businesses might seem like a daunting task, but not only is it doable – it also makes commercial sense. Not only will the transition from linear to circular create opportunities that could deliver benefits of €1.8 trillion in Europe alone – circularity saves money.

By going circular you can improve efficiency in every area of your business, which reduces your production costs. You’ll save cash by reducing your wasted energy and using existing materials rather than new ones – especially if you offer your customers a way to recycle their old products.

Ultimately, the circular economy can help ensure your companies survive the long-haul. Analysis by Bocconi University found that the more circular a company is, the lower its risk of defaulting on debt, and the higher the risk-adjusted returns of its stock. Circular business increases resilience and efficiency, and creates a positive impact on the planet. 

EMF has created a stack of resources to help from a guide to making a pitch within your company to case studies of businesses that have already made changes, and a toolkit to help teach your colleagues what they need to know. Change won’t happen overnight, but it’s crucial that we begin these conversations today in order to build a more sustainable tomorrow.

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