H Generation: We Build Sustainability through Circular Economy
In January 2012, a report was released entitled Towards the Circular Economy: Economic and business rationale for an accelerated transition. The report, commissioned by the Ellen MacArthur Foundation and developed by McKinsey & Company, was the first of its kind to consider the economic and business opportunity for the transition to a restorative, circular model. Using product case studies and economy-wide analysis, the report details the potential for significant benefits across the EU. It argues that a subset of the EU manufacturing sector could realize net materials cost savings worth up to $630 billion annually towards 2025—stimulating economic activity in the areas of product development, remanufacturing and refurbishment. Towards the Circular Economy also identified the key building blocks in making the transition to a circular economy, namely in skills in circular design and production, new business models, skills in building cascades and reverse cycles, and cross-cycle/cross-sector collaboration.
The circular economy seems intuitive to be more sustainable than the current linear economic system. Reducing the resources used, and the waste and leakage created, conserves resources and helps to reduce environmental pollution. However, it is argued by some that these assumptions are simplistic; that they disregard the complexity of existing systems and their potential trade-offs. For example, the social dimension of sustainability seems to be only marginally addressed in many publications on the circular economy. There are cases that might require different or additional strategies, like purchasing new, more energy efficient equipment. By reviewing the literature, a team of researchers from Cambridge and TU Delft could show that there are at least eight different relationship types between sustainability and the circular economy.
The circular economy includes products, infrastructure, equipment and services, and applies to every industry sector. It includes ‘technical’ resources (metals, minerals, fossil resources) and ‘biological’ resources (food, fibres, timber, etc). Most schools of thought advocate a shift from fossil fuels to the use of renewable energy, and emphasize the role of diversity as a characteristic of resilient and sustainable systems. It includes discussion of the role of money and finance as part of the wider debate, and some of its pioneers have called for a revamp of economic performance measurement tools.
One example of a circular economy model is the implementation of renting models in traditional ownership areas (e.g. electronics, clothes, furniture, transportation). Through renting the same product to several clients, manufacturers can increase revenues per unit, thus decreasing the need to produce more to increase revenues. Recycling initiatives are often described as a circular economy and are likely to be the most widespread models.
A circular economy within the textiles industry refers to the practice of clothes and fibers continually being recycled, to re-enter the economy as much as possible rather than ending up as waste.
A circular textiles economy is in response to the current linear model of the fashion industry, “in which raw materials are extracted, manufactured into commercial goods and then bought, used and eventually discarded by consumers” (Business of Fashion, 2017). ‘Fast fashion ‘companies have fueled the high rates of consumption which further magnify the issues of a linear system. “The take-make-dispose model not only leads to an economic value loss of over $500 billion per year, but also has numerous negative environmental and societal impacts” (Business of Fashion, 2018). Such environmental effects include tons of clothing ending up in landfills and incineration, while the societal effects put human rights at risk. A revolutionary documentary about the world of fashion, “The True Cost” (2015), explained that in fast fashion, “wages, unsafe conditions, and factory disasters are all excused because of the needed jobs they create for people with no alternatives.” This shows that fast fashion is harming the planet in more ways than one by running on a linear system.
It is argued that by following a circular economy, the textiles industry can be transformed into a sustainable business. The Ellen MacArthur Foundation is at the top of the list as it focuses on the benefits of a circular economy. Their 2017 report, “A New Textiles Economy”, states the four key ambitions needed to establish a circular economy: “phasing out substances of concern and microfiber release; transforming the way clothes are designed, sold and used to break free from their increasingly disposable nature; radically improving recycling by transforming clothing design, collection, and reprocessing; and making effective use of resources and moving to renewable input.” While it sounds like a simple task, only a handful of designers in the fashion industry have taken charge, including Patagonia, Eileen Fisher, and Stella McCartney. An example of a circular economy within a fashion brand is Eileen Fisher’s Tiny Factory, in which customers are encouraged to bring their worn clothing to be manufactured and resold. In an interview on The Glossy Podcast (2018), Fisher explains, “A big part of the problem with fashion is overconsumption. We need to make less and sell less…you get to use your creativity but you also get to sell more but not create more stuff.” The Tiny Factory proves that it is possible to practice a circular economy in the textiles industry. Both China and Europe have taken the lead in pushing a circular economy. The Journal of Industrial Ecology (2017) states, the “Chinese perspective on the circular economy is broad, incorporating pollution and other issues alongside waste and resource concerns, [while] Europe’s conception of the circular economy has a narrower environmental scope, focusing on waste and resources and opportunities for business.” These practices are important for citizens to understand and realize the opportunity and benefits of a circular economy in the textiles industry.
The textiles industry has a long way to go to reach a sustainable future. A circular economy could be the answer to the social and environmental issues that the current linear, fast fashion model has created.
A construction sector is one of the world’s largest waste generators. The Circular Economy appears as a helpful solution to diminish an environmental impact of the industry.
Construction is very important to the economy of the European Union and its state members. It provides 18 million direct jobs and contributes to about 9% of the EU’s GDP. The main causes of the construction’s environmental impact are found in the consumption of non-renewable resources and the generation of contaminant residues, both of which are increasing at an accelerating pace.
Decision making about the Circular Economy can be performed on the operational (connected with particular parts of the production process), tactical (connected with whole processes) and strategic (connected with the whole organization) levels. It may concern both construction companies as well as construction projects (where a construction company is one of the stakeholders). As a good case that fits the idea of Circular Economy in construction sector on the operational level, there can be pointed walnut husks, that belong to hard, light and natural abrasives used for example in cleaning brick surfaces. Abrasive grains are produced from crushed, cleaned and selected walnut shells. They are classified as reusable abrasives. A first attempt to create a holistic measurement for Circular Economy implementation in construction company was performed by the international research team Nunez-Cacho P., Górecki J., Molina-Moreno V. and Corpas-Iglesias F.A. The results of the study were published in 2018 in Sustainability.
Circular Business Models
While the initial focus of academic, industry, and policy activities was mainly focused on the development of re-X (recycling, remanufacturing, reuse,…) technology, it soon became clear that the technological capabilities increasingly exceed their implementation. To leverage this technology for the transition towards a Circular Economy, various stakeholders have to work together. This shifted attention towards business-model innovation as a key leverage for ‘circular’ technology adaption.
Circular business models can be defined as business models that are closing, narrowing, slowing, intensifying, and dematerializing loops, to minimize the resource inputs into and the waste and emission leakage out of the organizational system. This comprises recycling measures (closing), efficiency improvements (narrowing), use phase extensions (slowing or extending), a more intense use phase (intensifying), and the substitution of product utility by service and software solutions (de-materializing). As illustrated in the Figure, these five approaches to resource loops can also be seen as generic strategies or archetypes of circular business model innovation.
Circular business models, as the economic model more broadly, can have different emphases and various objectives, for example: extend the life of materials and products, where possible over multiple ‘use cycles’; use a ‘waste = food’ approach to help recover materials, and ensure those biological materials returned to earth are benign, not toxic; retain the embedded energy, water and other process inputs in the product and the material for as long as possible; Use systems-thinking approaches in designing solutions; regenerate or at least conserve nature and living systems; push for policies, taxes and market mechanisms that encourage product stewardship, for example ‘polluter pays’ regulations.
Circular Economy Standard: BS 8001:2017
To provide authoritative guidance to organizations implementing circular economy (CE) strategies, in 2017, the British Standards Institution (BSI) developed and launched the first circular economy standard “BS 8001:2017 Framework for implementing the principles of the circular economy in organizations. Guide”. The circular economy standard BS 8001:2017 tries to align the far-reaching ambitions of the CE with established business routines at the organizational level. It contains a comprehensive list of CE terms and definitions, describes the core CE principles, and presents a flexible management framework for implementing CE strategies in organizations. Little concrete guidance on circular economy monitoring and assessment is given, however, as there is no consensus yet on a set of central circular economy performance indicators applicable to organizations and individual products.
Circular Economy Concepts
The various approaches to ‘circular’ business and economic models share several common principles with other conceptual frameworks:
Main article: Biomimicry
Janine Benyus, author of “Biomimicry: Innovation Inspired by Nature”, defines Biomimicry as: “a new discipline that studies nature’s best ideas and then imitates these designs and processes to solve human problems. Studying a leaf to invent a better solar cell is an example. I think of it as ‘innovation’ inspired by nature”.
Main article: The Blue Economy
Initiated by former Ecover CEO and Belgian entrepreneur Gunter Pauli, derived from the study of natural biological production processes the official manifesto states, “using the resources available…the waste of one product becomes the input to create a new cash flow”.
Cradle to cradle
Main article: Cradle to cradle design
Created by Walter R. Stahel and similar theorists, in which industry adopts the reuse and service-life extension of goods as a strategy of waste prevention, regional job creation, and resource efficiency in order to decouple wealth from resource consumption.
Main article: Industrial ecology
Industrial Ecology is the study of material and energy flows through industrial systems. Focusing on connections between operators within the “industrial ecosystem”, this approach aims at creating closed loop processes in which waste is seen as input, thus eliminating the notion of undesirable by-product.
Main article: Resource recovery
Resource recovery is using wastes as an input material to create valuable products as new outputs. The aim is to reduce the amount of waste generated, therefore reducing the need for landfill space and also extracting maximum value from waste.
Main article: Systems thinking
The ability to understand how things influence one another within a whole. Elements are considered as ‘fitting in’ their infrastructure, environment and social context.
“The Biosphere Rules”
Main article: The Biosphere Rules
The Biosphere Rules is a framework for implementing closed loop production processes. They derived from nature systems and translated for industrial production systems. The five principles are Materials Parsimony, Value Cycling, Power Autonomy, Sustainable Product Platforms and Function Over Form.