According to a recent article in Environmental Leader, "A linear economy, where natural resources are extracted from the ground, made into products and then thrown away at the end of their useful life, is becoming increasingly unsustainable — and expensive for businesses. The solution, according to the World Economic Forum’s 2014 Towards the Circular Economy report, is the circular economy. In this model, raw materials are extracted and made into products that are designed and manufactured for reuse and remanufacturing or recycling. It conserves natural resources and aims to eliminate waste."
For businesses it also increases competitiveness, new product development and overall sales. “A shift from a linear to a circular economy could unlock an estimated $4.5 trillion in additional economic growth by 2030,” US Chamber of Commerce Foundation’s Jennifer Gerholdt tells Environmental Leader. “The circular economy has captured the imagination of many companies that see the economic innovation opportunities of this more restorative model to tackle sustainability challenges, drive performance, competitiveness and innovation, and stimulate economic growth and development.”
“The circular economy aims to develop closed-loop business systems that enables economic growth whilst decoupling it from resource consumption. Circular economy business models, such as leasing, allow full traceability of materials and enables the business to keep hold of its resources,” Nichola Mundy, senior consultant at Axion Consulting, tells Environmental Leader.
There’s a strong economic case for the circular economy. But as Dominic Waughray writes in the report, the economic gain can only be realized if multiple businesses, supported by policy makers, make the transition away from a linear model: “A large-scale, business-led collaboration is required.”