The idea of a circular economy has been around for many years, but the need to put it into practice has never been so clear and urgent as today. Many are afraid of the losses and difficulties of such a process, but what if the obstacles we see now are only the beginning of something much greater.
Our current linear economy is based upon a take-make-waste mentality that has led us to what we know today as the climate crisis. A circular economy however, is based upon the idea of stopping waste from being produced in the first place.
We need to ask ourselves questions such as how we manage our resources, how we make and use products, and what we do with all these materials afterwards. This is the only way to shift our economy into a more sustainable development. There are in fact three main principles that sustain the economic framework of circularity that can help us understand why we need to change the way we produce and consume and even think.
The 3 principles of circularity
1. Eliminate waste and pollution: Currently, we take raw materials from the Earth, use them and eventually throw them away as waste. This system is opposite to sustainable because the planet’s resources are finite.
2. Circulate products and materials at their highest value: Keep materials in use, either as a product, a component or raw material. This way we make sure there is no waste and products and materials can retain their value.
3. Regenerate nature: Probably the most simple and important process of the circular model is to support natural processes and leave nature more room to thrive.
The ultimate goal of adopting a circular economy model is to take away the environmental pressure form economic growth.
Circularity as a business opportunity
Now that we have understood the three basic premises under which circularity lies, we can begin to understand why it is not only urgent and important for the planet, but how it is actually a great new and sustainable opportunity for businesses to embrace.
However, no one says or suggests that embracing the circularity movement will be easy, in fact, many are the challenges that remain. But there is significant evidence to understand the importance of addressing economic and social issues from a circular perspective, so let’s begin there.
Society is already asking for it
Unlike other big transformations or economic shifts which have many times encountered public resistance, circularity seems to be taking the opposite route. It is people that demand changes form companies, aiming for carbon neutrality and environmental and social justice.
There is a new reality of consumer behavior increasingly alined with sustainability and social responsibility. Consumers seem more aware as well as more willing to cut back on goods and services if their environmental practices seem dodgy or even nonexistent.
Get ahead of upcoming competitive advantages
The so called ‘tsunami of regulations’ is not going to stop anytime soon. Political, governmental and legislative action will be crucial to a great degree in our journey towards sustainability (and circularity).
The EU, for example, is already making strong political movements towards circularity, which makes the transition likely to happen faster than expected. But shifting towards a circular economy will not only make Europe greener, but also more competitive.
- In a circular economy waste becomes an asset, not a liability.
- Circular manufacturers can expect lower production costs as they don’t have to rely on the scarcity of resources.
- A circular business model ensures a continuing income stream through the durability, reparability or upgradability of its products, for example.
Transparency for the climate
The lack of information and a transparent look into what businesses and other organizations are doing to give an effective response to the climate crisis is perhaps one of the biggest challenges and obstacles our society faces today. People cannot fight for what’s best for the planet, and consequently themselves, if they don’t know what is causing such devastation in the first place.
Similarly, neither can businesses manage what they don’t measure and understand. Because being transparent is not only an externality to a company, or a given organization, to help build trust and reputation; it is in fact also a great learning and improvement mechanism.
We believe and work for transparency to be one of the key values driving the stakeholder transformation, as it is the only way to understand what we are doing wrong, what we are doing right and what it is that we are not doing yet.
In this regard, it is essential to our work to promote good corporate governance, meaning that the processes of disclosure and transparency are followed so as to provide regulators and shareholders as well as the general public with precise and accurate information about the financial, operational and other aspects of the company, including a more accurate definition of the ESG performance.
We have developed a corporate government tool that helps establish ESG impact objectives for employees in regards to the sustainability strategy of the company. Through our technology we are able to activate and track employees’ impact, creating engagement that translates into improved ESG metrics, reputational value and an overall positive impact for the environment and society.
If you want to know more about how we work to create a positive social and environmental impact, click here.