- Make better use of finite resources. The circular economy concept is all about making better use of natural resources like forests, soil, water, air, metals and minerals.
- Reduce emissions. About 45% of global greenhouse gas emissions come from product use and manufacturing, as well as food production.
- Protect human health and biodiversity. Every year, more than 9 million deaths occur due to air, water and soil pollution. This pollution also threatens biodiversity.
- Boost economies. Research shows that the circular economy offers a $4.5 trillion economic opportunity by reducing waste, stimulating innovation and creating employment.
- Create more and better jobs. Transitioning to a circular economy could create a net increase of 6 million jobs by 2030. ...
- It regenerates natural systems. In a circular economy, food is produced regeneratively. ...
- It combats climate change. ...
- It can improve access to nutritious food. ...
- It can support local communities. ...
- It saves money and creates value.
What it will take to create a circular economy?
today announced the two sides have signed a memorandum of understanding to create a partnership that aims to take the lead in the circular economy of plastic by construction of a commercial scale plastics renewal plant in South Korea. The two sides will ...
What are the future prospects of a circular economy?
The case for investing in a circular economy is as much about investor values as it is about investment performance. According to a study by Bocconi University in Milan, the more circular a company is, the lower its risk of defaulting on debt and the higher its risk-adjusted returns.
How can companies benefit from the circular economy?
Top 5 Benefits of the Circular Economy
- Increase Revenue While Appealing to Consumers’ Demand for Green, Safe Products. ...
- Increase New Business and Innovation. Businesses also have the opportunity to shift their profitable revenue generation by focusing on the “sharing economy”, which essentially replaces product ownership with a ...
- Risk Reduction Builds a Resilient Operation. ...
Why do we need a circular economy?
A circular economy is needed for two reasons: 1. Opportunities to improve the environment. A circular economy can be an important instrument to tackle the current triple planetary crises on climate, biodiversity and pollution. By keeping resources in the loop for longer, we’ll avoid emitting greenhouse gases caused by the energy needed to ...
What is circular economy?
In recent years, McKinsey research has shown that the circular economy —using and reusing natural capital as efficiently as possible and finding value throughout the life cycles of finished products —is at least part of the answer. 1. 1. See, for example, Hanh Nguyen, Martin Stuchtey, and Markus Zils, “ Remaking the industrial economy ,” McKinsey ...
How does economic growth affect emerging markets?
Economic growth in emerging markets has helped to raise living standards—but inevitably it has also generated massive consumer and industrial waste. Many municipalities in these markets spend up to half their budgets on solid-waste management. Innovative businesses, however, drawing on circular-economy principles, are finding ways to convert trash into income streams. By aggregating volumes substantial enough to justify business investment, they are able to create the infrastructure to organize and manage waste supply chains.
What is the purpose of McKinsey Quarterly?
McKinsey Quarterly. Mapping the benefits of a circular economy. Most European industries can improve financial performance with specific actions to reconfigure product lifecycles.
How to engage with a circular economy?
To truly engage with a circular economy model, you must reexamine the current systems your business has in place. Appraise where and when waste is happening, and how you can stop any “leakage.”. By redesigning processes to ensure a closed circle of production, you position your business for long-term sustainability success.
What are the principles of circular economy?
A circular economy believes that all elements of production have a part to play and can eventually reach a place where they are continuously reused. Core principles of a circular economy include: 1 Design: Eighty percent of environmental impacts are determined in the design stage. Circular economies demand sustainable design principles and intentionally opting into the use of recyclable, compostable, or consumable materials. 2 Durability: Creating long-lasting products is crucial to delaying potential waste or energy use that occurs at the end of a product’s life cycle. 3 Regeneration: It’s important that we source all energy from sustainable sources and work to create and support regenerative systems.
How much will the circular economy increase in 2030?
Widespread adoption of the circular economy results in increased Gross Domestic Product (GDP)—with a reported $4.5 trillion in economic benefits until 2030. But this does not only provide a general economic boost. Individual businesses that practice a circular economy can also reap the monetary benefits.
What is linear economy?
Around the world, production processes tend to operate under a “linear economy” model. This means that we design, create, and send out products with the expectation that their life cycles will end in the landfill. This is sometimes referred to as the “take, make, waste,” model, and it relies on the assumption that the world has access to infinite resources. The linear economy thrives on the consumption of materials, and economic growth is typically tied to the consumption of virgin materials.
Why is the circular economy important?
The circular economy mainly avoids recycling and skips landfills, all the while focusing on making the material cycles more continuous.
How does circular economy work?
Considering that the overall demand for materials will continue to rise, mostly as a result of the increase of middle classes and the global population, the circular economy will demand far fewer materials to use.#N#The circular economy mainly avoids recycling and skips landfills, all the while focusing on making the material cycles more continuous. When it comes to the environmental aspect, the circular economy also circumvents greater pollution caused by the use of new materials.
What are the negative externalities of the circular economy?
Through implementing the principles of the circular economy, the negative externalities such as air pollution and water, land, and soil contamination are managed far better. The same can be also said of controlling undesirable climate changes and the emission of toxins.
What is circular economy?
Putting a stop to industrial waste is the circular economy – a unique model intentionally designed to regenerate and improve the industry performance and oppose the volatility caused by the ever-changing business climate. The circular economy attains both strategic as well as operational benefits and combines a massive potential for value creation ...
What is the path of consumption and production?
Ever since the industrial revolution entered into full force, humankind began following a uniform path of consumption and production. This never-changing course consists of taking raw materials and transforming them into different goods that are later used, sold, and ultimately, turned into unconsciously managed and discarded waste.
What are the benefits of closing the loop?
Resilience. Those six benefits of closing the loop all help strengthen the core of your business, and also help it become more resilient. A systems-thinking perspective, understanding more about the ecosystem around your business can help identify the risks, issues and opportunities.
How does resource security help?
Resource security and regeneration have the additional benefit of reducing business risks, and diversifying both the locations and materials in your supply chain can also help. As an example, a global washing machine brand has production lines based on either magnesium or aluminium, so it can swap between the two to optimise input costs.#N#Local and distributed manufacturing and assembly can reduce the risk of disruption from geopolitical issues, global trade tensions, or climate change. We’re already seeing the impact of climate disruption, especially for agricultural products such as food, textiles, cocoa and rubber.#N#Might your customers have concerns about risks linked to the product? New science highlighting toxicity, safety, or other problems, can quickly change the landscape. Plastic straws, glyphosate weedkillers and PFCs in outdoor gear are just a few examples where new evidence threatens the entire business model for the companies involved.#N#What about other threats? Maybe your competitors (existing or soon-to-be) are planning circular economy projects that could undermine your business. Are you at risk from their customer-centric offer, new commercial models, or building their brand purpose to do more good (not just a bit less harm)?#N#Is your sector gaining attention from governments, concerned about pollution and health? Might they impose product stewardship legislation, taxes, or even ban the product itself? Think of those manufacturers of single-use plastics in countries that now have taxes or complete bans. Circular approaches can mitigate those risks, too.
Why is it important to collect and recover end of life products?
Collecting and recovering your own end of life products, components and materials helps close the loop in your supply chain, boosting your resource security at the same time.
What Is A Circular Economy?
Economic Benefits of A Circular Economy
- Widespread adoption of the circular economy results in increased Gross Domestic Product (GDP)—with a reported $4.5 trillion in economic benefitsuntil 2030. But this does not only provide a general economic boost. Individual businesses that practice a circular economy can also reap the monetary benefits. Take the consumer goods industry: There is $3...
Examples of Circular Economies
- Many sectors are embracing circular economy principles or models. Here are a few examples that are taking Rubicon’s mission to end waste to heart.
Circular Economy Business Models and Solutions
- To truly engage with a circular economy model, you must reexamine the current systems your business has in place. Appraise where and when waste is happening, and how you can stop any “leakage.” By redesigning processes to ensure a closed circle of production, you position your business for long-term sustainability success. To learn more about Rubicon’s work transformin…