The circular economy can play an important part in building resilience to future crises, to survive shocks and live through disruptions such as a pandemic, water scarcity, or other climate change related crisis. However, before we dive into building resilience while transitioning to circularity, we will dive deeper into the concepts of circularity and the circular economy.
Concepts linked to circularity, such as closed-loop systems, waste management, industrial ecology and product recovery management, started to arise in the academic world in the 1990’s. Allegedly, the first international academic workshop about re-use was hosted at Eindhoven University of Technology in 1999 (Flapper, 1999). The term Circular Economy (CE) only gains attention in academic publications from 2010 onwards. In addition to the concepts mentioned above, there are several schools of thought related to circularity, each typically connected to their intellectual founders, as described in e.g. Webster (2017) and Weetman (2017):
The cradle-to-cradle school of thought is seen by many as a conceptual breakthrough in the maturity of circularity. It has been the main inspiration for the famous butterfly model of circularity popularised by the Ellen MacArthur Foundation. The diagram illustrates a system of continuous flow in a value chain, in which two cycles are distinguished, each centred on different types of materials: the biological cycle (focused on biological materials, e.g. wood or food) and the technical cycle (focused on technical materials, e.g. metals or polymers). The biological and technical materials are in need of different reuse processes; therefore, they need to be collected separately after use to be able to flow back into their respective cycles.
A large number of different factors explain the recent boom in attention for the circular economy. Roughly speaking, they can be summarised under two headings: society pull and enabler push.
Society pull reflects the underlying problems of climate change, resource scarcity and global instability. The top five global risks in terms of likelihood, identified in the Global Risk Report, are all environmental (World Economic Forum, 2020):
In addition, the Global Preparedness Monitoring Board (2019) released their first assessment on how ready the world is for a global emergency. Their verdict? Not ready: “For too long, we have allowed a cycle of panic and neglect: we ramp up efforts when there is a serious threat, then quickly forget about them when the threat subsides. It is well past time to act” (p.9). While governments and businesses are cautiously going ‘back to normal’, both the Global Risk Report and the Global Preparedness Monitoring Board point out that ‘normal’ is largely the cause of the climate crisis and the collapsing of ecosystems. Various stakeholders in society, such as citizens, businesses, non-governmental organizations (NGO’s) and governments, are addressing these issues more and more actively, creating society pull.
The enabler push reflects elements that facilitate an effective way forward, such as innovative developments in terms of technologies, business models and circular strategies or regulations and incentives. It is becoming very clear that due to increasing society pull, circularity is now firmly on the agendas of policy makers, academia and NGO’s. On the business side of things, the recent increase in attention for the circular economy has led to an important increase in corporate, consultancy and entrepreneurial activity related to the topic.
In Mastering the Circular Economy, we use two definitions as practical backbone for the book. We refer to the circular economy as a wider, more global and more generic concept, whereas we will use the term circularity when referring to the more specific (micro) context of a single company:
Value retention refers to the idea of resources carrying an intrinsic value, opposed to the economic notions of value. In terms of finished goods this means retaining their state or reusing them with as little change as possible to ensure consecutive lives, and in the case of the conservation of resources retaining them closest to their original state (Reike et al, 2018).
For those who are already a bit familiar with the circular economy, the letter ‘R’ must already sound familiar. Most concepts related to circular strategies have ‘re-‘ in the naming: reuse, refurbish, recycle and so on. ‘Re-’ in Latin means ‘again’, ‘back’, but also ‘afresh’, which all point to the essence of a circular economy (Sihvonen & Ritola, 2015).
These strategies are referred to as the R-ladder or the R-imperatives. There are ten strategies on the R-ladder: refuse, reduce, resell/reuse, repair, refurbish, remanufacture, repurpose, recycle materials, recover (energy) and re-mine. The strategies all have different implications for resource use, design, manufacturing, consumer usage and the afterlife stage. The first two strategies are the preventive options – R0 refuse and R1 reduce – and the other eight strategies are the reutilization options. The rule of thumb for the R-ladder is the higher up the ladder you go (from R0 to R9), the more resources are used, thus the higher the environmental burden, and the least circular they are.
The 10R’s are divided into 3 stages:
Important to remember is that these 10 strategies can be implemented by businesses and within value chains simultaneously. Usually there is one dominant circular strategy, and one or more of other strategies can be applied as a complement to the chosen dominant strategy.
Our current global challenges highlight the importance of resilience: the ability to survive shocks and live through disruptions such as a pandemic, water scarcity, or other climate change related crisis. It is essential to create a more resilient system that ensures the health and safety of all people. A system in which we reframe our relationship with the natural world and in which where we are stronger in the face of future challenges. A system where we are less dependent on global intertwined supply chains. A system where creativity, cooperation and transparency are central. And that system is circular.
Flanders Circular and VITO (2020) conducted a resilience survey studying how various organisations experienced the COVID-19 crisis and how they look to the future. The study highlights three success factors that make companies more resilient to disruption, which are all fundamental in a circular economy:
Besides, 34% of circular companies experienced shortage compared to 98% of ‘business-as-usual’ companies. The circular strategies that lead to fewer shortages appear to focus mainly on local, short supply chains and less material use. This study shows that circular strategies do not only make companies more sustainable, they also make them more resilient. It seems fair to say that circular economy is here to stay.
Rozanne Henzen is a researcher and circular economy expert within the Sustainable Transformation Lab (STL) of Antwerp Management School, based in Antwerp, Belgium. She is currently recognized as one of the Sustainable Young 100 of 2020 in the Netherlands.
Ed Weenk and Rozanne Henzen just launched a new book called ‘Mastering the Circular Economy’. Mastering the Circular Economy is an introduction to circularity from a business and value chain management perspective. Want to know more? Check out our book page here.
The authors are also hosting an exclusive event on ‘Design a course on Mastering the Circular Economy’. They will present a concrete example of how you can implement a circular economy course with the textbook Mastering the Circular Economy. You can learn more and register here.
By incorporating business simulation game, The Blue Connection, as an integral part of the book, the reader can immediately put theory to practice. At Inchainge, we are confident that this publication will set a new standard for textbooks on Circular Economy and bring the integral learning experience with The Blue Connection to the next level.
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