What is the circular economy?

How many smartphones do you have collecting dust at the back of a drawer at home? It’s something most of us are guilty of, but have you considered the impact this has on our planet?

By keeping or chucking away rather than recycling old phones, precious minerals such as copper and cobalt aren’t being reused. When you consider that 5.3 billion smartphones have become defunct in the last year, this is a big problem. Indeed, by 2030, electronic waste is expected to grow to 74 million metric tons a year. Policy makers hope to reverse this trend by encouraging the proper recycling of e-waste – and all other waste as well – by moving to a circular economy.

What is circularity?

At its core, the circularity is about stopping waste from ever being produced and switching to renewable energy and materials. This production model is based on three key principles, as outlined by the Ellen Macarthur Foundation: eliminate waste, circulate materials and regenerate nature. 

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By encouraging companies to rethink how their products are made, consumed and recycled with circularity in mind, the hope is we can reverse climate change and prevent the further loss of biodiversity. That’s because, when we extend and renew the lifecycle of materials, they maintain their value for longer and avoid becoming waste. 

Why does the circular economy matter?

A circular economy offers an alternative to the linear take-make­-dispose model most businesses depend on today. Originally developed to produce goods on a mass scale, the linear economy relies on the use of finite resources and results in all products being discarded once they reach the end of their lifespan. This includes single use plastics, electrical goods, vehicles, household products, glass, metals and fibers. The majority of this waste is nonbiodegradable and inorganic – and it’s growing, fast. 

Every year, we generate more than 2 billion metric tons of household waste and at least a third of that isn’t managed in an environmentally safe manner. By 2050, this figure is expected to rise to an estimated 3.4 billion tons. These growing levels of waste take up valuable space on our planet, expend finite resources, disrupt ecosystems and contribute to global warming. While the rubbish decomposes and rots, landfills emit high levels of toxic greenhouse gases such as methane, ammonia, carbon dioxide and nitrous oxide. 

The shift to circularity addresses this problem at the source. It requires us to develop recyclable and biodegradable products and packaging, and to use sustainable methods and renewable energy for manufacturing and transport.

Circular economy examples 

Businesses can achieve meaningful change by embracing circular economy principles. The following examples show how companies are already making the adoption of a circular economy work for them, and the planet:

• Make new products from waste material: Italian furniture startup KINDOF uses recycled steel rods to create a range of chairs, tables, bookcases and accessories that embrace the material’s raw, industrial appeal. The company’s entire design concept is built on a circular business model.
• Recycle plastics again and again: Transitioning to clear PET plastic means that any new drinks bottles can now be fully recycled. Corporations such as Coca-Cola pledge to shift to 100% recyclable plastic in their packaging, saving more than 20 million pounds of new plastic compared to 2019. This circular economy of plastics could contribute to cutting more than 25,000 metric tons of greenhouse gas emissions in 2023 alone.
• Build sustainable infrastructure: In Dassault Systèmes’ “Building Tomorrow” project, experts reimagined the Eiffel Tower for the modern world, using virtual twin technology, circular development principles and eco-design concepts.
• Repair rather than replace electronics: Around 50 million metric tons of electronic waste is created per year. Policy makers hope to change that by encouraging consumers to repair rather than replace electronic goods. In France, the repairability index requires manufacturers to display whether electronic devices can be repaired and how.

Why are companies getting serious about the circular economy?

Despite the progress being made, only 7.2% of the global economy is currently circular. Which means that global businesses still almost exclusively rely on new materials.

As the impact of climate change intensifies, a Deloitte report estimates that we would need to reduce global material extraction and consumption by at least one-third to help reverse the damage already done. A shift to more circular solutions will play an important role in accomplishing this goal of reversing negative environmental impacts. 

The European Union has introduced measures to close the circular economy gap. For example, the circular economy action plan encourages sustainable product design and waste reduction. New right to repair legislation backs this up by making it easier and more cost effective for consumers to repair goods, such as by extending product guarantees, making repair manuals available and connecting consumers with repairers and refurbished goods sellers in their local area. 

What are the benefits of a circular economy?

At a time when future-proofing the planet is more important than ever, sustainability and circular economy strategies continue to gain traction with businesses.

“Their imagination is captured by the opportunity to gradually decouple economic growth from virgin resource inputs, encourage innovation, increase growth, and create more robust employment,” said the Ellen Macarthur Foundation. “If we transition to a circular economy, the impact will be felt across society.”

Wider benefits of a circular economy include:

• Protecting the environment: A circular economy protects our environment from further damage caused by excess waste, which contributes directly to global warming and climate change.
  
• Reducing dependence on raw materials: By recycling and repurposing existing materials already in circulation, businesses can reduce the amount of raw materials they extract from the earth.
  
• Stimulating innovation: A circular economy encourages innovative new ways for companies to manufacture products, packaging and modes of transport. The result will hopefully mean we have more products that are fully recyclable, more durable, higher quality, better performing and will generally last the consumer longer. 

How can Dassault Systèmes help achieve a circular economy?

For businesses to successfully implement a circular economy approach, they must have full visibility of their entire value chain. And that essentially means they need to break down siloes across their organization and connect the dots between their data. The 3DEXPERIENCE platform makes this possible by bringing all operations within a centralized environment. The result: company leaders have the information they need to make better decisions, both for their business and the planet.

 Businesses can begin the transition to the circular economy by taking advantage of the latest digital capabilities to:

•  Connect the value chain: The 3DEXPERIENCE platform brings together all stakeholders in the value chain around a single source of truth, providing end-to-end visibility that allows them to make decisions about how best to use resources and reduce waste.
•  Simulate products virtually: The 3DEXPERIENCE platform’s virtual twin and simulation capabilities support eco-design principles and allow designers to test the most sustainable and cost-effective materials while reducing the need for physical prototypes.
• Make intelligent predictions: By incorporating predictive analytics, companies can use the 3DEXPERIENCE platform to continuously improve product quality, optimize their processes, and detect issues such as product defects early on in the process.
• Carry out a full lifecycle assessment (LCA): In-built LCA functionality in the 3DEXPERIENCE platform gives companies the ability to monitor and measure the environmental impact of a product throughout its entire lifecycle. This covers the ability to identify the most sustainable materials and measure energy consumption at each stage of production.

“More companies are now aware that the linear approach no longer works in the long run,” said Andrea Cagnin, sustainability expert at Dassault Systèmes. “To continue being relevant in the industry, unlock new growth opportunities and contribute toward a sustainable future for all, they need to think circular.”

See More 

• Coca-Cola’s circular approach to reducing plastic pollution
• New CircularEV solutions get more electric vehicles on the road
• Upskilling the workforce with more circular concepts 
• 6 examples of the circular economy in action
• Circular solutions in the manufacturing industry