Maximizing recycling and re-use of materials is necessary, but cannot be a cure-all." "And none of these can be solved in isolation. "On a finite planet, endless economic growth is not an option," Narberhaus says.Įnvironmental crises are intertwined with the crises of inequality, migration and democracy, he believes. The circular economy model is usually presented as a pragmatic win-win solution, But Micha Narberhaus, founder of Smart CSOs Lab, says"research published in the Journal of Industrial Ecology has concluded that circular economy activities can actually increase overall production, "partially or fully offset their benefits." Last year, EU member states signed off on the Circular Economy Package (CEP), a suite of new laws designed to create a more resource-efficient Europe. The single-use plastics legislation will address 70% of marine litters items, avoiding environmental damage that would otherwise cost €22 billion by 2030. "Once implemented, the new rules will not only tackle plastic pollution, but also make the EU the world leader in a more sustainable plastic policy, thus driving forward our circular economy," Vice President Jyrki Katainen, responsible for jobs, growth, investment and competitiveness, said. This week the European Council adopted measures proposed by the Commission to tackle marine litter from the 10 single-use plastic products most often found on European beaches, as well as abandoned fishing gear and oxodegradable plastics. The International Labour Organization projects the net creation of 18 million green jobs by 2030, including 4 million in manufacturing and 9 million in renewables and construction, all areas that will be boosted by a shift to circular thinking.Ī report from McKinsey has suggested that adopting circular economy principles could generate a net economic benefit of €1.8 trillion (€1.6 trillion) for Europe by 2030. The circular economy can also boost local jobs, van Riel believes. "A growing number of companies, including some of the world's largest corporations such as Apple, Walmart, P&G and DowDuPont, have adopted circular economy commitments that could have profound impacts on the way they and their suppliers work," says Anne van Riel, the head of Sustainable Finance Americas, ING. She points to technological developments such as energy storage, advanced materials and the internet of things will help to make the circular economy a reality.Īt the end of 2018, the Ellen MacArthur Foundation, an advocacy organization for the circular economy, announced the New Plastics Economy Global Commitment, which brought together over 250 businesses, governments, NGOs and academic organizations pledging to eliminate unnecessary plastic packaging and create new packaging to be 100% reusable, recyclable or compostable. "As a result, sustainability now is a business opportunity for the financial industry." "Directing more assets and capital to sustainable businesses creates a healthy portfolio for the banks and helps them to facilitate the transformation to a low carbon economy," says Leonie Schreve, global head of Sustainable Lending at ING. "And that is quite an achievement in today's low-growth environment," says Gerben Hieminga, senior economist at ING.īut while there has been much talk of what the circular economy is and how businesses can adapt to it, one area that has not been fully explored is how it will be financed. This is a market that is predicted to generate 1% to 4% growth over the next 10 years. The model is called PaaS (Product as a Service). The source of cash for companies, he adds, will be services provided for customers, connected with maintenance and upgrading purchased products. “It means and heavily depends on giving up GDP as the only measure of economic progress," Adam Czyzewski, chief economist at Polish oil company PKN ORLEN, says.įor companies, the circular economy means a new business model, where you don’t earn on the sale of material goods designed for a short life, goods which you use and dispose of, Czyzewski says. "Ownership gives way to stewardship consumers become users and creators," says Swiss architect Walter Stahel, a leading advocate of the idea. Giving dignity to Bengaluru's waste pickersĬircular economy business models fall in two broad groups: those that propose reusing and extending service life through repair, remanufacture, upgrades and retrofits and those that turn old goods into as-new resources by recycling materials.