Within the next decade or so, the way most companies do business will look very different from today. Mounting pressure to become more sustainable is making leaders rethink their current approaches to producing goods on a massive scale. Using endless amounts of the Earth’s finite resources – for a product to be discarded once they reach the end of their lifespan – is quickly becoming taboo. The result? The linear economy vs circular economy equation is becoming clearer than ever.
We’re becoming rightly uncomfortable with a status quo in which everything from electrical goods, vehicles and household products to plastics and fibers in circulation today are largely nonbiodegradable, inorganic and contribute to the torrent of waste that heads to landfill. And we’re becoming increasingly enamored with a solution – the circular economy – which the World Economic Forum predicts will replace existing linear business models to become the only economy within the next decade.
Linear economy vs circular economy model explained
The linear business model – in which we take resources, make a product and waste both materials unneeded for production and the product itself once its useful life has ended – is something that we have followed for centuries. Fittingly, it’s known as the take-make-waste economy.
A leader in promoting circularity, the Ellen Macarthur Foundation defines the linear economy as a system in which finite resources are extracted to make products that are used, generally not to their full potential, and then thrown away. Linear by nature, products and materials are destined to move in a single direction, from raw material to waste.
Today, global industries still largely rely on this linear system. At its peak in 2016, this linear economy approach generated 242 million tons of plastic waste alone, the equivalent to 12% of all solid waste.
Why is a linear economy not sustainable?
Not only is the linear system hugely wasteful, but it also degrades our natural environment, contributing to the loss of biodiversity and accelerating global warming. Landfill waste is responsible for approximately 11% of methane emissions worldwide.
Indeed, reports say that a large proportion of damage to the environment is down to the mismanagement of waste. At least 33% is thought to be dealt with improperly, either dumped or burned when it could actually be recycled. Even as companies scale back their carbon emissions, high levels of toxic greenhouse gasses such as methane, ammonia, carbon dioxide and nitrous oxide are emitted from landfills, growing to 2.38 billion tons of carbon-equivalent emissions per year by 2050.
Three principles of the circular economy
The circular economy reframes how businesses use natural resources and encourages them to keep products and materials in circulation for as long as possible so they never become waste. It’s widely considered an effective way of building a sustainable future and stopping pollution from being created.
Making sure that all materials are either refurbished, repurposed, maintained or remanufactured could avoid any further waste heading to landfill, being dumped in the sea or being burned. It requires companies to rethink how they develop their products and, ultimately, do business. Those leading the way embrace the latest sustainable design trends and adopt the three main principles of the circular economy, which are:
- Eliminate waste and pollution: To eliminate waste, we must bring an end to designing disposable products altogether and instead develop products that are sustainable from the ground up, from plastic bottle caps and smartphones to industrial buildings. One company making progress is Coca-Cola. The global beverage brand currently produces three million tons of plastic packaging globally per year and recently switched its signature green Sprite bottles to 100% recycled PET plastic. This type of plastic is clear and can be recycled again and again to make new bottles. It’s a move that’s estimated to save more than 20 million pounds of new plastic being produced compared to 2019.
- Circulate products and materials (at their highest value): Making best use of all existing materials means that companies will need to find innovative ways of keeping them in circulation, whether that’s through recycling, repurposing or refurbishment. Sustainable brands like KINDOF base their entire business models on circular economy practices. The Italian furniture maker uses recycled steel rods to create chairs, tables, bookcases and accessories, and has developed a special manufacturing method to make the most of each rod. Every piece is finished with non-toxic substances that do not harm the environment, so that all the material can be recycled again.
- Regenerate nature: Planting and replenishing trees, boosting marine biodiversity, reclaiming natural habitats, rewilding spaces for nature, and growing produce in a renewable system are just some of the ways that we can revive our natural ecosystems. Because there is no waste in nature, businesses are increasingly looking into how they can mimic natural ecosystems and make their products from bio-based, compostable and circular materials such as vegetable-based leathers. Reshaping our food industry also plays a crucial role in regenerating nature – a third of all human-caused greenhouse gas emissions are linked to food.
“A circular economy for food mimics natural systems of regeneration so that waste does not exist but is instead feedstock for another cycle.”Ellen Macarthur Foundation
Why move to the circular economy vs linear economy?
Shifting from a linear economy to circular economy principles provides many benefits to businesses, societies and our planet. They include:
- Reversing the impact of climate change: the circular economy is recognized by policy makers as an integral part of their sustainability plans to protect our natural world and build a carbon-neutral economy.
- Helping people live longer, healthier lives: A circular economy approach within the food sector alone is predicted to save 290,000 lives lost to outdoor air pollution per year by 2050.
- Creating new business opportunities: Shifting from linear production methods to reusing, repairing and remanufacturing could generate over US$1 trillion a year by 2025 for the global economy. The same report found that 100,000 new jobs could also be created for the next five years.
Today, the circular economy is becoming less of a trend and more of a standard for companies as political backing and growing societal pressure grows worldwide. Of course, changes of such magnitude don’t happen overnight. It’s estimated that only around 7% of the global economy is currently circular and most businesses still largely rely on new materials. Yet the transition away from the linear economy is happening, and policy interventions, technological innovation and sustainable-focused investment will continue to accelerate the scaling up of circular economy principles across global supply chains. It’s only a matter of time.