In The Drum’s recent article from November 16, titled “In the loop: why Ikea, Lego and Patagonia are buying into the circular economy,” readers learn how new regulation and environmentally conscious consumers motivate companies to invest in the circular economy. Although the concept of circular economy has not been defined, its basic idea of being a regenerative system based on reusing and recycling waste is emphasized. Today, companies should consider the extension of a product’s life cycle, product repair, and closed-loop business models as imperative strategic choices. Apart from obvious environmental benefits and threatening economic charges, their leaders identify business opportunities to create new offerings and innovative consumer engagements as key incentives. Overall, they agree, a circular economy can largely contribute to sustainability and ensure the survival of the firm.
Reduction, Reuse & Recycle: the 3Rs of the Circular Economy
The presented initiatives from Ikea, Patagonia and Lego demonstrate that the circular economy is much more than some kind of advanced recycling process. Building on its core principles, it includes a change of our industrial system and consumption model. Circular economy, in practice as well as among scholars, mainly emerges through the so-called 3Rs principle (reduction, reuse, recycle) to increase resource-efficiency. However, it is questionable whether a “perfect” circular system, i.e. one where no resources are lost as waste at any stage of recycling or reuse, can exist. Further, resources needed for recycling or reusing are typically excluded from consideration. Consequently, reusing and recycling are merely remedial actions to waste generation. The reduction principle ensures that the greatest economic, environmental, and social benefits and thus deserves much greater attention. It aims to minimize the input of primary energy, raw materials and waste through the improvement of efficiency in production and consumption processes.
Introducing a waste hierarchy in the circular economy
Unfortunately, studies show that, overall, companies are less interested in reduction since this may curb consumption and economic growth. Hence, the prioritization of reduction in the circular economy concept can raise skepticism and discouragement among interested stakeholders in the short-term. Nevertheless, outlining the hierarchies among the 3Rs is necessary to provide guidance to those keen to adopt a circular economy. Otherwise, companies might be tempted to only improve the reuse and recycle dimension without the needed entire system overhaul, consisting of the entire supply chain, mode of operation, and product materials. Failing to do so results in an unsustainable model. For instance, businesses cannot justify short product lives only because recycling is perceived as a good environmental practice. Such a model may lead to the so-called “rebound effect”, where the reduction in resource use through recycling or reuse is compensated by increased overall production.
Innovative actors demonstrate that resource use and waste reduction can be achieved through better technologies, more compact and lightweight products, simplified packaging, new business models, and collaboration. Another successful example is the zero-waste e-commerce Loop Alliance. It delivers products in reusable packaging. After consumption, Loop collects, cleans, and refills them for the next delivery. By focusing on the reduction principle this collaborative initiative promotes responsible consumption and resource efficiency.
The inclusion of a waste hierarchy in a circular system is crucial. A circular strategy that avoids the reliance on recycling is the way forward on the journey towards sustainability.
Feature photo by Sergio Souza on Unsplash.
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