The ideas that feed the circular economy go back to the 1960s, when the modern environmental movement was in its early days. Its principles are simple: recycle, reuse, repurpose, share, refurbish, lease, regenerate goods and materials. The goal? Mitigate our impact on the environment by reducing the amount of waste we discard. However, circular economy strategies have an impact beyond tackling climate change. Indeed, these strategies have also been lauded as a tool to create new jobs and reinvigorate economies.
In our infographic below, we look at some of the key reasons behind pushes for a more circular economy worldwide. We then look at trends in consumer opinions and research that has been done on the circular economy's impact.
As human beings, we have had an arguably catastrophic impact on the environment since the industrial revolution. Both individuals and businesses play a role in massively speeding up the effects of climate change linked to the rise of consumerism as we know it today. The trends that have been observed over time are concerning:
Many industries are notorious for their wastefulness: construction, fashion, FMCGs, etc. In addition to creating significant waste, waste management is poorly handled in many of these sectors. Circular economy strategies can provide an answer to this growing problem.
Only 8.6% of the world's economy is circular today. What benefits can increasing that number bring?
As awareness grows, consumers are changing their behaviour and asking businesses to change theirs. This is partially why highly consumer-driven sectors are embracing sustainability trends. For example, sustainable fashion is increasingly becoming a must for younger consumers. This has led brands to seek out new materials that are less damaging to the environment. There's also been growing demand for green real estate, often leading companies to seek out circular processes for material procurement and management. Consumer surveys continuously highlight shifting demand for more sustainable practices:
Refurbished marketplace BackMarket experienced a 1,000% YoY growth from 2019 to 2020. Indeed, the pandemic has helped bolster consumers' adoption of refurbished/second-hand products, which often come at a lower price. Market projections are favourable for many sectors. For example, the global market for refurbished computers and laptops is expected to be worth $4.9 billion by 2027. In terms of fashion, second-hand items could become more popular than traditional retail as projections show the fashion resale market being worth $84 billion by 2030, versus $40 billion for fast fashion.
Many countries are implementing regulations to adopt circular strategies. Indeed, the EU recently adopted a Circular Economy Action Plan to achieve a carbon-neutral, sustainable, toxic-free and fully circular economy by 2050. Corporates are also embracing this shift, with companies like Danone pledging to make all their packaging reusable, recyclable or compostable. Of course, many challenges remain in transforming the linear economy we all know today. Corporates must avoid greenwashing and actually follow through with their pledges. Consumers must change their consumption behaviours to help businesses also shift their models. Governments will need to continue adopting and enforcing strong legislation to make our economy more circular.