The aim of a circular economy is to create a loop where all outputs of the economy are not wasted but recycled back into production.

Circular economy

What is a circular economy?

Since the industrial revolution started, the amount of waste in the environment has constantly increased. This is because our economies have used a take » make » consume » dispose model – a linear approach which assumes that resources are abundant, easily available and easy and harmless to dispose of – which they aren’t.

The aim of a circular economy is to create a loop where all outputs of the economy are not wasted but recycled back into production. This means re-using, repairing, refurbishing and recycling existing resources, materials and products. What used to be regarded as ‘waste’ can be turned into a resource. All resources will be managed more efficiently throughout their life cycle.

In a circular economy there are two types of material flows:

  1. biological resources – designed to reenter the biosphere safely
  2. technical resources – designed to circulate continually without entering the biosphere

Using resources more efficiently will also bring new growth and job opportunities. Better eco-design, waste prevention and reuse can bring net savings for businesses while also reducing total annual greenhouse gas emissions. The economic benefit of transitioning to this new business model is estimated to be worth more than one trillion dollar in materials savings.

A circular economy would internalise external costs by recycling resources and therefore eliminating waste disposal and environmental degradation.

Design for sustainability

In a circular economy the design of products, services and business systems would take on a new dimension. The way in which a product would be retrieved, dismantled and reused would need to be designed into the product from the beginning. This feedback would cause the design to evolve organically, improving in both effectiveness and efficiency over time.

This type of design thinking would involve economy-wide collaboration and co-operation potentially providing significant synergies and efficiencies.

Case studies

Interface and Net-works

Interface is renowned for it’s sustainability efforts. Read more about Interface and watch an interview with its founder, Ray Anderson. One of Interface’s many initiatives is called Net-works. Net-Works is the first step in creating a truly restorative loop in carpet tile production, cleaning up oceans and beaches while also creating financial opportunities for some of the poorest people in the world. Read more about Net-works»

The following case studies were provided by the World Economic Forum.

Ricoh — Resource recirculation in the inner loop.

Ricoh, provider of managed document services, production printing, office solutions and IT services, established the Comet Circle™ in 1994 as a catalyst for reducing environmental impact. It embodies the belief that all product parts, for example for copiers and printers, should be designed and manufactured such that they can be recycled or reused. Read more about Ricoh»

Philips — Lighting as a service.

Philips has a track record in the collection and recycling of lamps. For example, in the EU, Philips has a stake in 22 collection and service organizations that collect 40% of all mercury-containing lamps put on the market and with a recycling rate greater than 95%. Read more about Philips»

Vodafone — Offering consumers access.

Vodafone is one of the first movers in the ICT industry to capture the benefits of the ‘access over ownership’ business model with its Vodafone New Every Year/Red Hot and Buy Back programmes. Read more about Vodafone»

H&M — Collecting clothing for reuse and recycling.

Starting in early 2013, H&M launched a global in-store clothing collection programme to encourage customers to bring in end-of-use clothes in exchange for a voucher, an initiative also taken by Marks & Spencer with Oxfam in the UK. Read more about H&M»

Trina Solar – recycling end-of-use photovoltaic modules

Trina Solar one of the largest solar panel manufacturers in the world based in China, have started developing technologies and standards for recycling end-of-use photovoltaic modules in anticipation of the obsolescence of first-generation panels. Read more about Trina Solar»

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