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
Description: The Circular Footprint focuses on material use in a product and its circular performance. It considers the cradle-to-cradle scenario and only includes material flows making it easy to use. The calculation method is based on both material usage (input side) and post-use processing (output side).
Name: ISCC PLUS Certification for the Circular Economy and Bioeconomy
Issuing Organisation: International Sustainability and Carbon Certification System GmbH
Category: Raw material and resources
Description: The ISCC PLUS certification uses physical segregation of resources and mass balancing to account for circular economy throughout the supply chain of materials and products.
Name: Closed Loop Product Certification
Coverage: United States, Canada
Description: GreenCircle certifies an organisation's claim for a closed loop product based on a detailed analysis of the product's downstream supply chain and life cycle. It verifies that the manufacturer has an established process and system to take back their products for reuse and recycling into the same or similar products within the manufacturing operation.
Issuing Organisation: TCO Development (The Central Organization of Salaried Employees – TCO)
Category: IT Products
Description: TCO Certified drives the development of products that are durable, repairable, upgradeable and recyclable, making them more attractive for reuse or secondary markets. The certification covers all phases of the product life cycle: material sourcing and manufacturing; use and re-use; recovery and recycling.
Name: Circular Economy Strategy Certification
Coverage: Europe, Central America, South America, Africa, Asia
Description: The Circular Economy Strategy Certification is based on the circular economy strategy management model and helps organisations evaluate contributions to, and areas of improvement in, circular economy principles.
Name: APCO Packaging Targets and Membership
Description: APCO administers the government-backed 2025 National Packaging Targets which aims to phase out problematic and unnecessary single-use plastics packaging and increase the uptake of recycled content in packaging. It encourages innovative solutions for recycling and reuse of plastic and effective circulation of used plastic. It also provides guidance on designing sustainable and circular packaging solutions.
Targets set, targets met.
givvable is an easy-to-use digital platform helping business and government buyers find suppliers aligned to their sustainability targets and track their credentials on an ongoing basis so they can communicate and report their progress with confidence.
If your organisation has set sustainability targets, leverage givvable's extensive datasets and automated data mapping to help you meet them, faster!
Supplier sustainability, smart and simple. Join the go-to platform for businesses to discover and track supplier sustainability.