Revised August 2023

Introduction

<aside> <img src="/icons/forward_blue.svg" alt="/icons/forward_blue.svg" width="40px" /> Author's Note: We originally published this white paper in December 2022, and as the macroeconomic factors have only become more challenging and charges of 'greenwashing' grow ever louder, we felt it was a good time to take another look. We have updated facts and figures, added commentary, and invite you to take another look too.

</aside>

Over the past year, the climate crisis has become more urgent than ever, driving brands and retailers to adopt more sustainable business practices in response.  Together with recent economic factors that are putting intense pressure on the cost of living, Boards are grappling with questions of how to address both.  Enter the Circular Economy, a new way of doing business that is increasingly seen as a potential response to both of these issues.

This white paper provides a primer that explains the options for joining the Circular Economy, why cost-of-living pressures are likely to increase the urgency to be part of it, how to tell if it is a worthwhile effort for your business, and what needs to be considered before committing to it.

What is the Circular Economy?

The Circular Economy is an evolution of the way the world produces and consumes both goods and services. It means moving away from the world’s current – and enormously wasteful – economic model of ‘take, make, throw away’, in which resources are extracted, turned into products, used, and discarded. According to a 2021 Circularity Gap Report, the world economy is only 8.6% circular (which means that only 8.6% of the materials extracted and used each year are cycled back into the economy).

<aside> <img src="/icons/forward_blue.svg" alt="/icons/forward_blue.svg" width="40px" /> Author's Note: This report was updated in 2023, and the figure has declined to 7.2%! The reasons for this include the effect of the pandemic, the war in Ukraine, and the continued growth of the world economy.

</aside>

The model redefines the economy around three principles:

1. Designing out waste and pollution
2. Keeping products and materials in circulation, at their highest value, for as long as possible
3. Helping nature to regenerate

Each principle encourages us to:

• Rethink and redesign the way things are made, used, and wasted
• Design and manufacture products to be more durable, reusable, repairable, and recyclable
• Protect our environment by reducing the environmental impact of how we live

Part 1: What are the Options to Consider?

The Cost of Living Crisis is Intensifying