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 you may not have realized the impact these defunct devices have on our planet. ?

By keeping or chucking away rather than recycling old phones, precious minerals such as gold, 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. By 2030, an expected 82 billion kg of e-waste is expected to be generated. And according to the World Health Organization, electronic and electrical waste (e-waste) is the fastest-growing domestic waste stream in the world. 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. Because it’s not just e-waste that is rapidly increasing.

According to the World Bank, we generate more than 2 billion metric tons of household waste, and more than a third of that waste isn’t managed in an environmentally safe manner. By 2050, we’re projected to waste 3.4 billion tons annually. Waste takes up valuable space on our planet, expends finite resources, disrupts ecosystems and contributes to global warming. While rubbish decomposes and rots, landfills emit high levels of toxic greenhouse gases such as methane, ammonia, carbon dioxide and nitrous oxide. The solution to managing waste, including e-waste, is incorporating circularity into our economies.

What is circularity?

Circularity is the process of reimagining production to eliminate waste and pollution while promoting renewable energy and materials. Circularity describes more than just recycling, although the two ideas are connected. This production model is based on three key principles, as outlined by the Ellen Macarthur Foundation:

Regenerate nature.
Eliminate waste and pollution
Circulate products and materials

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By encouraging companies to rethink how their products are made, consumed and recycled with circularity in mind, we can extend and renew the lifecycle of materials and seek to reverse climate change while preventing the further loss of biodiversity.

What is the main goal of a circular economy?

A circular economy offers an alternative to the linear take-make-dispose model most businesses depend on today. It’s a familiar process: a manufacturer takes resources to make a product, and the consumer disposes of the product after they’ve used it. 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.

The shift to circularity addresses this problem at the source, replacing concern and waste with creativity and prosperity. When we commit to responsibly manage our resources and our impact on the environment, we’re inspired to develop recyclable and biodegradable products and packaging and use sustainable methods and renewable energy for manufacturing and transport.

Circularity can help ecosystems and economies flourish side by side in the generative economy. According to a 2023 report by the Ellen MacArthur Foundation, adopting circular economy principles could generate $4.5 trillion in economic benefits by 2030.

How can businesses adopt circular economy principles?

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:

Recycle plastics again and again: Transitioning to clear PET plastic (as opposed to green PET plastic) enhances the recyclability of drinks bottles. Corporations such as Coca-Cola have pledged to shift to 100% recyclable plastic in their packaging. Over the first year after the switch, according to the Northeast Recycling Council, Coca-Cola saw a 13% increase in PET recycling, indicating the success of the transition and setting an example for corporations to follow.
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 62 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.

smartphone with e-waste collection bin - circular economy - Dassault Systèmes blog

Why is there urgency around transitioning to a circular economy?

Despite the progress being made, only 6.9% of the global economy is currently circular. Which means that global businesses still almost exclusively rely on new materials.

As climate change’s impact intensifies, the Circularity Gap Report, powered by Deloitte, estimates that around two-thirds of greenhouse gas emissions and over 90% of biodiversity loss and water stress are driven by material extraction and use. A shift to more circular solutions will play an important role in 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 the circular economy?

Protecting the environment from waste impacts: 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 provide support for businesses transitioning to circular business models?

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, 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): The 3DEXPERIENCE platform’s built-in LCA functionality allows companies to monitor and measure a product’s environmental impact throughout its lifecycle. This includes identifying the most sustainable materials and measuring 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.”

Rebecca Lambert
Rebecca Lambert is a skilled content creator and journalist based in the UK. Since she was a young girl, Rebecca has been captivating readers with her words, covering virtually any and every subject matter.

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