Circular Economy 101:

Your Simple Introduction to the Circular Economy

What Is the Circular Economy?

It's the framework for a restorative economy, that meets the needs of modern society while respecting the natural limits of the planet... 

Restorative

adjectives: 

defined: 

corrective, remedial, recuperative

having the ability to restore health, strength or a feeling of well-being. 

linear economy

It's based on three basic principles...

Design waste out of our products and services

Waste is largely a result of poorly designed products. One of the many challenges facing the recycling industry today is the un-recyclable nature of the materials it collects.  Products and systems need to be designed for reuse, recycling or refurbishment so we can maintain the resources that make them up.  

A good way to envision the circular economy, is to compare it to the linear economy of the 20th century... 

Prior to the industrial revolution - when blood, sweat and tears were the engines that drove manufacturing; natural resources seemed inexhaustible.  

 

But the industrial revolution changed that; as our technologies advanced and our economies developed - our capacity to create exploded.  This was great for humans but not so much for everything else.

All the resources we used and the stuff we made only moved in one direction - towards a shallow grave.  This creates pollution, contributes to climate change and chews up our limited supply of natural resources.

The Linear Economy

After a couple decades of exponential growth, our seemingly endless supply of natural resources is starting to show its limits.  With a global population of 7.6 billion, another 2.2 billion people expected by 2050 and an ever-growing middle class of consumers - its clear that the take-make-waste mentality established during the industrial revolution is not going to cut it for the 21st century.  

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Instead of deciding how to reuse stuff after its been manufactured and consumed - reuse and recovery are built into our products & services from the very beginning.  

The circular economy is regenerative by design.  Systems of sharing, reuse, refurbishment and recycling keep man-made, technical nutrients like plastics separate from natural, biological nutrients like food.   

But In A Circular Economy . . . 

The things we make are designed to go through multiple cycles of reuse.
Source: Ellen MacArthur Foundation

Countless examples of circularity can be found in nature

The leaf is an essential “product” of the forest. It’s flat and thin composition make it perfect for absorbing sunlight that it converts into energy for its tree (aka photosynthesis).  This process also happens to convert CO2 to oxygen, which makes it possible for humans to breath.  Leaves also make shade, catch water and serve any number of other organisms in their ecosystem as food, shelter, camouflage and more.   Eventually, all leaves expire and fall to the ground towards the end of every summer.  But, they don’t become waste.  Instead of polluting its ecosystem, leaves are designed to re-integrate into it. First,  small organisms known as nature’s unsung heroes of recycling like beetles & earthworms; then fungi and mold break down the leaf into smaller and smaller components until it reaches a state that can be fully reabsorbed by the surrounding ecosystem.  All without the need to be packaged, shipped or disposed of at any point in its existence.    

Think about that... a single item that cycles through numerous different uses, then gets broken down and safely returned to a naturally occurring cycle of resources. 
That is the essence of a Circular Economy

Circular Business Models

Nature shows us that its possible to consume resources without destroying them.  But how can we apply these lessons to society in a way that prevents pollution, creates less waste and keeps the economy humming?   

To the way we do business is a good start... 

Circular business models look beyond the end-user of their products.  The customer isn't the end of the line, but rather a stop along the way in a closed loop system of resource management.  A circular economy incorporates systems of sharing, refurbishing, reusing and recycling to maximize the value of our limited resources by ensuring they're used to their full potential.  Popular circular models include... 

Driving Service

Sharing platforms leverage the unused capacity of products with low use rates.  ZipCar for example provides on-demand access to automobiles; which for many can eliminate the need to buy something they would rarely use.  Lyft takes it a step further by enabling individual auto owners to do the same with their personal vehicles.  

Sharing Platforms

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In the product as a service model, the customer isn't buying a product but rather paying for the service that the product provides.  This model helps companies to build long term relationships instead of individual sales and allows them to recover residual value at the end of their products' life cycles.   Check out Phillips "lighting as a service" for a good example of this model.

Product As A Service

Dump

There is no shortage of waste buried in our lands, floating in our oceans and making its way through our economy.  But one man's trash is another man's treasure, and this has never been more clear than it is if you run a resource recovery business model. Day Owl sources ocean bound plastic waste to make backpacks, and will even recycle the bag for you at the end of it's useful life!

Resource Recovery

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Better for business... Better for you

The potential benefits of a circular economy extend beyond the board room.  CBM's provide better value to their customers because their products and services are better aligned with consumer's actual needs.  Instead of the one size fits all approach of the linear system, the circular economy allows consumers to save by purchasing only what they need.   

Products As A Service

Reduce and even eliminate upfront purchase and installation costs for durable goods like appliances and vehicles. 

Sharing Platforms

Let you pay for products only when you actually need them, instead of paying full price for something that you rarely use

Resource Recovery

Allows consumers to find residual value in their products and purchases after they've been consumed

Further Learning...

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EMF is essentially ground zero for the circular economy movement.  Looking for a deep dive into how a circular economy works?  Check out the Learning Hub.  Or browse the vast resources the site has to offer and find out how you can get more involved.  

The US lags behind the rest of the developed world in the quest to implement a circular economy, but the Chamber of Commerce is looking to change that.  Their Corporate Citizenship Center is "a powerful platform for learning, sharing, networking and collaborating to help companies achieve their circular economy and sustainability goals."   

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On a more global scale, the World Economic Forum recognizes the challenges posed by our take-make-waste system.  In response they've established a program called "Shaping the Future of Global Public Goods".  Accelerating the circular economy is one of several objectives  identified as a key to putting the planet on a sustainable path to the future.  

Do you want to make your company or idea more circular?  The Circular Design Guide is a great place to start.  Launched in 2017 as a collaboration between IDEO and the Ellen MacArthur Foundation, it offers videos, articles and exercises designed to help entrepreneurs, business owners and innovators apply circular strategies to existing businesses or new ideas.