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Circular Economy Q1 2024

Why business models must shift from linear to circular

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Adam Batchelor

Policy and Engagement Lead – Circular Economy, IEMA

Unlock value with the power of circular economy strategies to get more from less of your resources. Embrace sustainability for a brighter future.

The Circular Gap report in 2024 shows that globally less than 8% of what we produce is returned to be made into new products, only avoiding the use of virgin materials by a very small amount. According to the Stockholm Resilience Centre, humanity has already gone beyond the safe limit for six of the nine planetary boundaries.1

In 2021, it was estimated that globally we extracted over 100 Giga tonnes of natural resources and, by 2050, this may surpass 170Gt2 if we continue with the business-as-usual ‘linear economy’.

Value of transitioning to circular business models

Our current business models are a key driving force for our unsustainable production and consumption, and this must change if we are to move humanity back within the safe limits of our planet. By transitioning our business models to be circular, we can reduce our unsustainable consumption of raw materials, energy, water and land — thus producing lower emissions and waste.

A business model defines how an organisation will operate, compete and deliver value. It is a common misconception that you need to tear up your whole business model to be more circular. At IEMA, we believe that, to address how an organisation’s footprint can be reduced, you need to design your circular strategy first. This will help you articulate how you will create value while also shrinking the footprint of your organisation.

Steps to implement circular strategies

IEMA’s Circular Economy Network Steering Group published a Circular Economy 101 guide, including a framework to guide circular decision-making. Whether working on a product design, a service, leading an organisation or policymaking, we’ve identified six goals that will help to implement the circular economy.

In our ‘How to integrate circular strategies into your business model’, we explain how each of these goals can be used to guide circular strategies to unlock value and achieve better outcomes. Three of the six circular economy goals — slow, intensify and cycle — are at the core of circular strategies and are supported by the remaining three goals: narrow, regenerate and shared value.

  • ‘Slow: use longer’ goal – enables businesses to develop strategies that encourage longer product lifetimes.
  • ‘Intensify: use it more’ goal – enables businesses to develop strategies that encourage us to share, exchange and rent those products we might not need to own.
  • ‘Cycle: use it again’ goal – enables business to develop strategies that might include recovering end-of-use items, so they can be recovered for another cycle of use.

By transitioning our business models to be circular,
we can reduce our unsustainable consumption
of raw materials, energy, water and land.

Circular strategies maximise business value

Underpinning the business model with circular strategies can deliver ongoing value for customers, extend customer retention, create new revenue streams from service offerings and improve brand loyalty.

By embracing circularity and redesigning products, business models and supply chains, you can achieve net zero targets and create more value from less. This will keep valuable resources in circulation for longer and shift from our current business-as-usual, wasteful economy.

Further reading on circularity

The shock factor: Trailblazing eco-designers and ‘ideologists’ VIN + OMI speak about their work promoting sustainability across the fashion industry and beyond.

From rubbish to refuse: David Burrows on the stolen concept of a circular economy and how reduction must be at the heart of product design.

Out of fashion: The global clothing industry is not only unfair but increasingly unsustainable, Huw Morris reports. The war on waste: While children starve, billions of tonnes of food are thrown away each year. David Burrows explores what’s being done about it.

[1] Recklessness defined: breaking 6 of 9 planetary boundaries of safety » Yale Climate Connections
[2] https://www.circularity-gap.world/2023#download

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