The Circular Economy

A Sustainable way of thinking

In the 1970’s, amid a growing awareness of human activity and its impact on our eco-systems, emerged a slogan: "Reuse, Reduce, Recycle".

This principle offered an easily digestible push towards sustainable consumerism, emphasising the need for less household waste and promoting repairable lasting goods. This phrase quickly became mainstream, commonplace in schools, businesses, and homes across the UK.

The early 2000’s saw a further promotion of these ideas, with much attention focused specifically on the repair of the ozone in the southern hemisphere and the establishment of the concept of the ‘carbon footprint’. More so than ever before, the public were persuaded to consider their individual contribution to a global issue.

When considering how to reduce human impact on the climate, the components of renewable business practice and sustainable consumerism are vital, however often inconsistent, and fragile in their real-world application. There has been a significant increase in the availability of reusable storage methods, such as boxes and jars for example.

Plastic bottles, shopping bags, straws - we are all familiar with these campaigns and the impact they have had in the last ten years. However, these methods have done precious little to combat the plastic waste problem. For most of us, the food we put in our cupboard storage came wrapped neatly in plastic, the produce we buy from the shops was packed up and shipped from abroad, the paper straws we drink from come stuffed in a plastic lid in a non-recyclable cup, all of which will inevitably end up in landfill.

The same is true of our clothes, with fast-fashion rampant amongst the western world. In 2022, the UN announced that in order to reach global 2030 emissions goals, all sectors including the fashion industry, must cut emissions by over 45% in the next 10 years.

Brands such as Shien and Temu, at the forefront of Europe’s fashion industry, have consistently fallen short of this target, relying heavily on virgin-polyester and high levels of oil consumption. These companies have been in the public eye for some time, recognisable for their lines of cheap clothing and popular brand deals on apps such as TikTok and Instagram. As well as their environmental controversy, both companies have faced calls for an investigation into their material sourcing, both highly likely to have coerced labour embedded into their supply chains. While they’ve since been cleared, tech companies such as Apple have faced similar accusations in the past.

The underlying fact is that more often than not, a lack of transparency goes hand in hand with unethical and unsustainable business models. In the current culture of mass-consumption and with business priorities standing firmly on profit maximisation, where businesses have the opportunity to cut corners, they will.

This fault lies not just with the consumer, nor will presenting a simplistic "everybody buys elsewhere" solution likely to be successful. This is a systemic, economic issue, and one which needs significant overhaul.

Formation of ideas: The Circular Economy

It would be difficult to pinpoint the exact moment in which the exact principles of the circular economy were established. Like most economic systems, it first emerged as a collection of ideas aimed to combat a particular sociological issue, in this case the problem of finite resources.

It takes little more than a basic understanding of our current capitalist society to recognise that a culture of unregulated consumption within a growing population will inevitably run into catastrophic problems. On the understanding that space travel is not a realistic answer, it seems reasonable to assume that the motivation to create an economy that can continue supporting the fundamental needs of its people came not from our want to protect eco-systems or fluffy animals, but our own inherent need to protect the society in which we reside.

With this in mind, many countries and businesses, often during a time of relative economic decline or consciousness of stretched resources, have evolved and moulded elements of the circular economy to support their needs. Most notably, in 1940’s Japan, amongst both economic and social turmoil following the second world war, the Japanese government became increasingly mindful of their waste and production levels. Keen to re-establish themselves as a major economy, they adopted elements of a regenerative system in order to sustain their import and exportation levels.

Having studied its real-world application, a number of economic thinkers throughout the 20th and 21st century have put forward research promoting the values of the circular economy, many of whom take reference from the replenishing structure of nature itself.

In 1966, economist and educator Kenneth E. Boulding published an article titled “The Economics of the Coming Spaceship Earth”, in which he highlighted the need for a society's economic system to align itself alongside the ecological principle of finite resources. This article pioneered the ideals of a closed system in which input and output came around in a definitive and trackable circle, compared to the current linear system in which materials were both acquired, used, and discarded wastefully, with primary consideration applying only to the stage of the consumer's use. This document formulated the ideals of the circular economy, and while not without flaws, established a base in which ideas could be developed.

These ideas were quickly built upon. Now universally dubbed the "father of the circular economy", in 1982 architect Walter R. Stahel released his award-winning paper titled “The Product Life Factor” in which he detailed a closed-loop system that combatted the problems arising from a "fast-replacement system". He further argued that adopting the principles of a circular economic system was not only sensible when looking to integrate into a sustainable model, but a productive way to involve the private sector into business. Independent from the pro-environmental incentive, the recycling and rebuilding of products would create fresh job opportunities, reducing both unemployment and poverty within any society that adopts these ideas. From this, he argued, an economic balance could be achieved not just through investment, but relevant education and the appropriate fiscal policies.

These principles would go on to form what we now widely recognise as the Three Pillars of Sustainable Development: Economic, Social, and Ecological.

The Turn of the 21st Century

In the modern day, a leading advocate of the Circular Economy is the Ellen MacArthur Foundation, which currently leads in promoting the broad values of a regenerative system, and these ideas have changed little since they were first created. Established by prominent yachtswoman Dame Ellen MacArthur in 2010, following her solo circumnavigation of the globe five years prior, she returned to establish a charity piloting the real-world application of this economic theory.

Since then, the charity has become exponentially popular, and is now a driving force within the environmental movement. The foundation itself hosts regular conferences open to both journalists and climate scientists, funds and publishes new research, and takes an active role in promoting discussion in schools and universities across the UK.

For the last four consecutive years, the Ellen MacArthur Foundation has been invited to the annual Conference of the Parties, and now boasts over 200 employees across Britain, China, Belgium, and the US.

Charities such as these fill a vital role in representing common environmental interests on behalf of the public. Since the turn of the 21st century, significant social and political change has increased our awareness and desire to minimise both waste and pollution, as well as prevent the wider ecological destruction caused by climate change, but many struggle with the sheer scale of the issue at hand.

UK based polls indicate that between 20-30% of the UK electorate believe the environment to be one of the top three biggest issues currently affecting the UK, and many rally behind environmental social movements. Marches and demonstrations continued in cities throughout 2023, and it’s estimated that numerous environmental groups such as the RSPCA and RSPB now boast over 20 million members, or just under 1/3 of the UK population.

While granted significant consideration amongst the electorate and within parliament, the broad ideas of ‘the climate movement’ often prioritise particular ideas and goals while others are neglected in conversation. These oversights, as would be expected from both a political and individual stance, typically follow the principles of convenience and financial incentive.

For example, with the demand for renewable energy generation rising, a market has been created that contains great financial potential, with businesses keen to invest in new industries such as electric vehicles and solar generation, and consumers keen to get involved. Solar panels, or PV systems, when placed correctly can both supply cheaper clean energy as well as increasing the value of your house, making them a great investment for new buyers who are consciously looking to minimise their impact on the environment.

These systems are a good example of a growing market that’s fundamentally successful on all levels. While not suitable for every building, for example those that face north or those located in areas with reduced sunlight, the financial incentive and moral contribution are enough to warrant widespread investment.

Other methods that would demand significant overhaul of existing systems, even when reliably predicted to net profit and provide more efficient systems in the long run, are substantially more difficult to promote. Many of these require either too much immediate investment, or as is the root problem of much of the environmental issue, are presented in an almost fictional way: a dream future in which working systems are already in place.

Reduce, Reuse, Recycle

One such example is the Reduce, Reuse, Recycle movement.

While recycling rates have risen substantially in the last 20 years, standing at a solid 43% in 2022, precious little progress has been made to prevent the continued supply of unrecyclable content reaching our homes.

The 2022 global brand audit report conducted by Break Free from Plastic found that Coca-Cola, Nestlé, and PepsiCo were the top three biggest plastic polluters globally for the fifth consecutive year.

Less than 12 months later, the Ellen MacArthur Foundation issued a report further documenting plastic waste and pollution, finding that Coca-Cola were responsible for 3.4 million metric tons of annual plastic waste, Nestlé not far behind with 2.6 million, and PepsiCo contributing 927,000 tons. These numbers are staggeringly high, whilst their public images are maintained by a series of performative pledges and a continued avoidance of responsibility.

Many in the UK will remember a time in which companies such as Coca-Cola sported a return system, in which glass bottles could be returned for the profit of a sixpence. Many deposit return schemes still operate for recyclable plastic bottles across Europe, however for large companies, virgin, single-use plastic remains at the forefront of their financial interests. Despite the extent of their plastic pollution, in 2022 Coca-Cola reported sales of over $43 billion USD, with millions of bottles destined straight for our oceans and our landfill.

With this in mind, it’s worth noting that both the short-term nature of governmental systems, and the wider societal apathy towards big and seemingly impossible problems such as climate change, undermine almost all significant movements towards change.

By design, human beings are not prone to, nor would it be easy to contemplate the enormous global plastic waste problem, or the scale of the energy crisis. Instead, as individuals we use these things as context for which we can make small decisions. Somebody who has recently watched a video on landfill sites in Indonesia, or read an article about rising sea levels, may opt for the more expensive recycled laundry detergent, or divert their walk via a recycling bin. Collectively these gestures promote the values of a better and more sustainable future, but they will not be enough to embed them within our economy.

The primary consideration must be how best to implement changes into the foundations of business practice, not just within Britain, but globally, holding companies accountable at all stages of their supply chains and ensuring they do not undercut the progress that we make as individuals, with the expectation that the government will hold them to that standard.

For businesses, developing macro-scale forward-looking and environmentally sustainable strategies and business practices that take into account the concepts of the Circular Economy will pay dividends in the long run, with greater consumer acceptance and reduced risk of future environmental litigation and clean-up costs.

For individuals, comparing how businesses really measure up to the readily observable micro-scale Reuse, Reduce, Recycle principles embedded in the Circular Economy would seem a logical yardstick for consumers to evaluate the sustainable credentials of the companies they buy from.

The Circular Economy, a sustainable way of thinking for businesses and individuals.

 

 

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