Full circle: Transitioning from a linear to a circular economy
At a glance
The term “circular economy” is used widely these days, particularly in relation to sustainability programs and initiatives, but the key principles of a circular economy can be confused or misunderstood.A useful way to define circular economy is to contrast it with the traditional linear economic system that we currently operate in. In a linear economy, we extract materials from the environment to make products, we use or consume those products and then we discard these products as waste. Ultimately, the value of these products and materials is lost post use, and that waste frequently accumulates in our oceans and across our global landmasses, negatively impacting our environment and our communities
To help address the many ecological and social challenges facing our planet, and to support our net zero goals, it’s critical that we transition from a linear economy to a circular economy.
The three key principles of a circular economy
A circular economy, as defined by the Ellen Macarthur Foundation, is founded on three principles:
- Design waste out.
Eliminate the concept of waste through purposeful design. Designing with end of life in mind means that products and materials are not immediately disposed of once they’ve been used.
- Keep products and materials at their highest and best use for as long as possible.
The products and materials in a robust circular system must be designed for long-term use and then fed back into the system. They should be treated as resources that provide continuing value after their first use.
- Regenerate nature.
It’s not enough to mitigate negative impacts; we need to proactively regenerate natural systems. Keeping products and materials in use longer requires fewer virgin materials to drive our economy. Transitioning our economy from an extractive to a regenerative one means we can rebuild the natural capital so critically needed.
The business perspective
Circular economy strategies have an important role to play in derisking businesses into the future. It is now widely recognised that adopting the principles of a circular economy within business strategy can build long term resilience and deliver on goals related to climate change.
The built environment is responsible for approximately 40 per cent of global emissions and almost 50 per cent of global material use. Businesses will increasingly put profitability at risk if they remain unprepared for impacts associated with climate change including the introduction of stronger regulation and supply chain impacts. They also risk being left behind as other business embrace circular opportunities.
Further, businesses should look to transition to circular procurement practices as much as possible to secure their place in a circular economy. In a true circular economic system, businesses continually signal to the market that they want to buy longer-lasting products that have minimal environmental impact.
Governments play a major role in procurement, and in the built environment this presents an important lever for change. Businesses need to be ready for how the government will respond to changes in the procurement process.
Positive outcomes for the environment and our communities are critical goals that go hand-in-hand with the financial security that companies are aiming to achieve when transitioning to a circular economy model.
Critical governance and radical collaboration
Regardless of where you find yourself on your circular economy journey, governance plays a key role. As an example, it’s not enough to conduct a material flow analysis and determine that each valuable resource needs to be used and circulated.
Instead, we need to identify how to use and circulate those resources in the most effective and efficient way and then implement those actions. Organisations can progressively step through the entire design process to ensure they establish a robust circular system.
In the construction industry, sustained success depends heavily on the ability of companies to embed circular economy principles throughout their businesses. The fact that some companies have adopted circular practices while others continue with traditional approaches sends mixed messages to the market and dilutes the potential benefits.
We won’t find the answers within one industry. We need radical collaboration between industry stakeholders to deliver a paradigm shift. Competitors must become collaborators to solve this shared challenge for the benefit of all.
Every sector benefits from increased collaboration and a broad understanding of what others are doing, what their waste products may be and whether they may be useful to a different industry. A great example is the mining industry, whose waste products are actually quite useful for the construction industry.
Transitioning to a circular economy is not just an environmental imperative for the property and buildings sector; it’s a strategic necessity. Right now, used products are more expensive than virgin materials, but if we make circular economy our primary goal, then we will find solutions.
Collaboration and strong governance are essential to drive this transformation. We need to work together, sharing knowledge and resources, to implement circular practices effectively and foster a sustainable future for all.
Making the commitment
Understand where value is leaking out of your business as waste. Ask yourself: why does something end up in the bin? Are we over-ordering? Really question where your sources of waste are coming from and why.
Get support to develop strategies that design waste out of your business. Ask: Do we need to purchase this product at all? If yes, can we share it with someone else so there’s less wastage?
Think about circular procurement. Where do you have capacity to make the most impact? Understanding the 10 R-strategies of the circular economy can help you identify where the most impact can be made.