Circular Economy is not a fad, it’s here to stay

February 12, 2019

A new paradigm that allows infinite growth with finite resources

As we mentioned in our Consumer Trends Report, the Circular Economy is one of the trends that will be taking over the conversations. Don’t know much about it? Let’s do an overview of the basics of Circular Economy!

Why Do We Need Circular Economy?

The linear economy is not sustainable anymore, as we are currently experiencing:

  • Resources depletion: Over the last four decades, the global use of materials almost tripled, from 26.7 billion tonnes in 1970 to 92.1 billion tonnes in 2017.2 Not only has material use been increasing, but it has also been accelerating and is forecast to grow to between 170 and 184 billion tonnes by 2050.1
  • Waste production: “Throwaway culture” has been having an impact on our planet, especially our oceans. In 2016 alone, the world generated 242 million tonnes of plastic waste – equivalent to about 24 trillion plastic bottles – and that is just 12% of the total waste generated each year2.
  • Global Warming: Climate change and material use are closely linked: around 62% of global greenhouse gas emissions (excluding those from land use and forestry) is released during the extraction, processing, and manufacturing of goods to serve society’s needs1.
  • Demographic Explosion: In August 2018, the total population of the world exceeded 7.63 billion people, and this number is continuing to grow each day, driven by the economic growth of emerging countries.

What is the Circular Economy?

A circular economy is an economic system aimed at minimizing waste and making the most of resources. This regenerative approach is in contrast to the traditional linear economy, which has a ‘take, make, dispose’ model of production.

The Circular Economy is all about business – economy has always been about how we manage scarcity and resources efficiently. In this sense, we should look into the earth’s resources as finite and design structure to be sustainable, share resources and re-use everything: design everything integrated into a bigger circle and closing the loop for every piece of material produced.

Restorative by design

The Circular Economy is restorative by design: it aims to keep products, components and materials at their highest utility and value, at all times. It’s about maximizing efficiency in all aspects – it’s pure economy.

Even though this system is compatible with environmental causes, it doesn’t really dwell on guilt. It’s about innovation and integrating everything into a bigger purpose: individual action is nice, but cooperation downstream and upstream can really leverage the power of small changes.

Businesses don’t have to choose between profits and doing good for the world – because if they do it right, they’ll be doing both.

What is driving CE?

  • Regulation: The United Nations Sustainable Development Goals (SDGs) and the Paris Agreement, are just two examples of regulations that will push forward innovation and working in the circular economy.
  • Eco Trends: Consumers’ are more connected than ever to causes and to brands who support their convictions (we talked about this in our Consumer Trends Report), so businesses will be increasing efforts to diminish their footprint.
  • Business Opportunity: The world economy is only 9% circular. Filling the circularity gap redefines markets and creates tremendous business opportunities. It is estimated that $1.8 trillion is the worth of wealth that could be created by unleashing circularity.

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1 Source: The Circularity Gap Report 2019
2 Source: The World Bank
3 Source: World Population Review