Is The Circular Economy Gaining Any Traction?

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Waste management is no longer considered a ‘left-wing worry’ or an issue for activists. The logistics of disposing of the vast amounts of waste we produce on a daily basis has become some of the most challenging of our time, and the issue now transcends political ideologies. We have dug ourselves into a hole so deep none of us are quite sure how to get out – and with every day the problem grows greater as the population surges and our consumption habits worsen. 

The statistics say it all.

In the UK alone, 18 million tonnes of waste are sent every year to a landfill site. Around 80% of this however, could be recycled, composted or used again.

We make 20 times more plastic than we did 50 years ago. If it’s not recycled, plastic takes over 500 years to decompose.

The average UK household uses around 500 glass bottles and jars every year. Glass takes over 4000 years to decompose if not recycled.

Need I go on?

In addition to government council services there are now countless private companies dedicated to the removal of waste: Clearabee in the UK, Cleanway – Australia’s sustainable waste management solution, and the US-based Advanced Disposal, a solid waste and full-service environmental services company. There is no shortage of companies willing to collect rubbish, it’s more a question of where to put that rubbish after it has been collected. The earth’s available space is shrinking, while its piles of rubbish are growing every minute of every day.

The problem has most certainly been recognised – and so too has the potential solution. That of revolutionising the way we create and market products in a way that sees consumers maximise the value extracted from products before recovering and regenerating them at the end of their life cycle. The circular economy is the proposed alternative to the traditional linear economy, which has for the past 200-odd years seen us make, use and dispose of products in the assumption we are able to keep doing so forever, with no environmental consequences.

A circular economy is based on the principles of designing out waste and pollution, removing ‘single-use’ items from production and regenerating natural systems. In other words, it is based on the ambition of a world without waste. But it does so not by dealing with the aftermath of consumption (ie. disposing of or recycling of materials once used) but rather by dealing with the problem at the source – the way we build and value products.

“Source reduction is to garbage what preventive medicine is to health,” William Rathje wrote in The Atlantic Monthly in December 1989. He put it aptly indeed.

But is the idea of a circular economy gaining traction? Or has it failed before it even really began?

The circular economy has certainly grabbed the attention of policymakers and political leaders, no doubt thanks to the tireless efforts of activists, nonprofits and international organisations like the United Nations. But today a mere 9% of the economy is circular, meaning that while we are making headway toward a more environmentally-friendly economy, there is still a long way to go.

Thankfully, businesses have at last clocked on to the potential profit to be made from converting to a circular model, making it the “biggest wave of business transformation that companies are embarking on since the industrial revolution”. It is calculated that the new industry could be worth a whopping $4.5 trillion by 2030 alone, which is certainly encouraging to those seeking to invest in the next ‘big thing’.

RobecoSAM, a well-known international investment company with a specific focus on sustainability investments, has just launched the Circular Economy Equities strategy, with an objective of achieving long-term capital growth by investing in companies that opportunise the paradigm shift toward a circular economy. The company recognises that with such monumental changes come serious investment opportunities – and about time, because it is those companies that are willing to invest in the circular economy who are the true game changers.

“Industry self-regulation towards a circular economy is gaining momentum amid looming regulatory pressure and consumers are increasingly demanding sustainable products,” the company statement reads. “The RobecoSAM Circular Economy Equities strategy gives investors a unique opportunity to be part of this largely untapped growth story. It aims to identify and invest in leading companies that create value in loops. These companies employ targeted production and consumption, predictive maintenance, and enhanced use of byproducts to create value from inefficiencies.”

They aren’t the only ones changing their tune. ASICS now investigates the environmental and social impacts of their products at every stage of their lifecycle, and has begun changing the way they build their products. Levis is earning a reputation for hosting scientific dialogue and collaborating with others to reduce wastage and share best practises with the fashion industry. Then you have Patagonia, Adidas, Lush… We are getting there, slowly but surely. 

It is up to business and technology leaders to take us from where we are – in limbo, caught between the temptation of sticking to the status quo and taking a giant leap of faith towards the new economy – to where we need to be, through transforming product lifecycle management and return the production cycle to an even more profitable but far more virtuous state.

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