The Circular Economy as the New Normal
This case study explores the steps that must be taken to apply circular thinking in the real world. It gives examples, shares experiences, and discusses the importance of a multi-stakeholder approach. It also describes the need for upscaling and innovation from a pragmatic and programmatic approach and shows how implementation gaps can be bridged.
Why is cooperation in the value chain needed at a multi-stakeholder level? If capitalism and industrialization are responsible for social and environmental degradation, what economic reforms are needed to create a circular economy?
The Rise Of The Circular Economy
Over the last five years interest in the concept of the circular economy has risen tremendously. The report from McKinsey in conjunction with the Ellen MacArthur Foundation published in 2012 at the World Economic Forum ignited the idea, for CEOs and heads of government, that economic growth and restoration of our planet can be combined with this circular vision.
The years that followed yielded an ever wider, more integrated, and more nuanced picture about what the circular economy is and can be. After years of reports, overviews, and reviews of material flows, the first (new) circular concepts were brought to market. Well-known examples are Philips' 'light-as-a-service' model and companies such as Interface and Desso which used Crade2Cradle and later the circular economy as the integrated model for their strategic transformation. Soon more pioneers followed with their first pilots. For example Mud Jeans received global attention with the 'lease-a-jeans' concept.
Much has been written about the different drivers that have caused the recent acceleration of the circular economy. Most frequently mentioned is the risk of resource scarcity, price volatility, and increasing worldwide product demand. The technological sector, for example, faces scarcity of precious metals, such as gold, silver, and platinum.
There are also the opportunities that drive sectors to keep up with the rapidly changing environment. For example, changing functionalities - and ownership - of buildings and business districts are more common. This challenges the construction sector to grasp this opportunity to remain relevant and diversify from competitors. Other drivers vary widely: reduction of greenhouse gas emissions and waste, legislation, innovation, marketing, collaboration, new value propositions, and opportunities to increase residual value.