The Circular Economy is an emerging topic gaining traction among business buyers.
With companies and governments all around the world setting sustainability targets for reducing emissions, waste and pollution reduction, resource efficiency and conservation and more, the Circular Economy presents a long-term solution to operationalising and meeting these targets.
But what does the Circular Economy actually mean?
Today, society operates under a linear model – “Take, Make, Waste”. Our planet has finite resources, which means a linear model guarantees that soon we will run out of the important resources vital for human survival.
The Circular Economy takes the linear model and makes it circular – where resources taken from the ecological system are reused and recycled using technology and manufacturing processes until they can no longer be converted into products or services.
At this point – the end of their useful life – they are returned to the ecosystem. It is a regenerative system, which effectively uses the concepts of recycle, repurpose, remanufacture, reuse and recovery to restore the harmony of human life with nature.
There are three key principles of a Circular Economy
1. Minimise waste by intentionally designing out waste and pollution
2. Keep products and materials in use for as long as possible
3. Re-generate natural systems
How does the Circular Economy help meet sustainability targets?
The three pillars of sustainable development are environmental, economic and social. While the Circular Economy mostly directly influences the environmental pillar, the principles help achieve sustainability targets across all dimensions. This is how:
Environment: Different strategies can be adapted to progress towards a circular model, including:
- designing products to be easily maintained, refurbished and disassembled,
- reusing and recycling products and resources which cannot be returned to the environment,
- more efficient use of renewable resources, and sharing of resources and services.
These contribute towards reducing the environmental footprint of products and services we use.
Economic: The economic benefits of a circular model include lower production costs, economic growth, reduced investment in resource extraction, lower cost of recycled raw materials compared to virgin raw materials, growth in technological development investment and creation of high-quality jobs in the new sectors of industry focused on converting the linear model to a circular model.
Social: With new job opportunities, higher economic stability and a cleaner and better community to live in, the Circular Economy increases the standard of living, encourages community development and creates a pathway towards a sharing social economy.
How to activate spending for better environmental and social outcomes
Outside of staffing costs, procurement is the next largest business expense. Global business-to-business (B2B) and business-to-government (B2G) spending exceeds US$15 trillion every year. In Australia, this figure is A$600 billion. This means that, in order for businesses and governments to meet their sustainability targets, they must spend with suppliers that have the environmental and sustainable attributes that help meet them.
Global spending: US$15 trillion every year
Supplier attributes to look for ...
givvable is smart technology helping businesses discover and track supplier sustainability credentials and attributes, including those related to the Circular Economy.
The platform covers over 300 local and global credentials, such as certifications, accreditations, ratings and initiatives, which are automatically mapped to sustainability targets, sustainable development events and widely-used frameworks.
These frameworks include the UN Sustainable Development Goals (SDGs) and Environmental, Social and Governance (ESG) indicators under reporting standards such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), the Taskforce on Climate-related Financial Disclosures (TCFD) and the International Organization for Standardization (ISO) standards.
How do you spot a supplier that advances the Circular Economy?
There are credentials that are premised on the principles and business models of the Circular Economy. Other credentials, which target specific sustainability themes or objectives, may be related or indirectly linked.
Examples of credentials captured, or that suppliers may register, on givvable that users are able to track in the platform indicating supplier practices or initiatives advancing the Circular Economy include:
Issuing Organisation: Cradle to Cradle Products Innovation Institute.
Description: Cradle to Cradle Certified® is a globally recognised measure of safer, more sustainable products made for the circular economy. To be certified, products are assessed for environmental and social performance across five critical sustainability categories: material health, material reuse, renewable energy and carbon management, water stewardship, and social fairness.
Issuing Organisation: TRUE
Coverage: United States, Asia, Europe
Category: Physical facilities
Description: TRUE certification is for facilities and organisations and assesses performance in minimising non-hazardous, solid wastes and maximising efficient use of resources.
Name: Circular Footprint<