What is the Circular Economy?
The circular economy in simple terms, is an economic system that tackles global challenges like pollution, climate change, biodiversity loss etc. The ‘linear economy’ also known as, ‘take-make-waste’ is the process of taking finite resources, and turning it into a product which will inevitably become waste. As for the ‘circular economy’, the events are staged as such; extraction, manufacturing, retail, consumption and recycling. This ‘regenerative economic system’ employs activities like repair, refurbishment, reuse, sharing, and remanufacturing. The aim is to eliminate use of finite resources, removing waste from the equation. Ultimately, rebuilding all types of capital, including financial, human, social and natural.
The Future: the Circular Economy
The Circular Economy is going to play a big role in how firms structure their processes in the coming years. The European Commission believes the Circular Economy has the possibility to create 700,000 jobs and increase GDP by 0.5% in the EU by 2030. There are plenty of great examples of firms accommodating this way of working, while there are others who have begun exploiting the trend.
Darwin & Goliath, are a brilliant example of a firm doing it right. Founded by Eamonn Donlyn, Darwin & Goliath provides a tool which simulates automated product suggestions “You May Also Like” on their customers search websites. Darwin & Goliath aims sustainability and ESG information sources at the users of their customers.
On the flip side of the coin, there is the exploited side of the Circular Economy. “Circular fashion” is a dominant sector of the circular economy; this sector has historically stirred controversy around ethics. Global fashion retailer H&M have recently been under fire for their actions due to concern that H&M are ‘greenwashing’. Greenwashing, like it implies, enhances public approval by spreading an environmentally-friendly and sustainable image. H&M ’s Conscious Collection, and more recently H&M’s #LOOOPIT Campaign are speculated to be blatant greenwashing. The #LOOOPIT Campaign centres around reusing materials from old garments to be used in new ones. Critics argue that H&M’s narrative for one doesn’t add up, and, more importantly, doesn’t conform with a circular economy.
How can we measure Circularity?
How can we measure circularity, and who’s doing a great job already in our communities? It seems measurability is of utmost importance. How ‘circular’ are firms? As of January 2018 the first Circularity Gap Report was published. In 2018, the world as a whole was labelled to have 9.1% circularity. It is obvious that there is a massive gap in circularity, this has since decreased to 8.6% in 2020. The effort now has been phased into the Circularity Gap Reporting Initiative. The Circle Economy is increasing accountability. The Circle Economy is a social enterprise that aims to create industrial systems that are restorative by design by decoupling growth and resource needs. Providing insights into what a circular future might look like for a company, a region or even worldwide, and by coming up with scenarios for how to get there. They provide a powerful network, tools and experience to their members.