Businesses seek a circular economy

17th July 2012


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Adopting a circular economy framework, where industrial and agricultural systems are restorative and eliminate waste, is championed in a new report from the Aldersgate Group

Launching the report at the BASE London conference, Aldersgate director Steve Wallace said the aim of the economy in the future should be to get value out of resources “time and time again”.

He warned that resource productivity would be one of the key determinants of economic success going forward and advised that a circular economy was not simply about more recycling.

Citing research earlier this year by McKinsey, Wallace said a shift to a circular economy, which aims to preserve or enhance the biological and technical “nutrients” in materials, would produce at least a £340 billion boost to the European economy each year.

The Aldersgate report says that moving towards such an economic model can start now, but could be accelerated if barriers, such as the lack of infrastructure to support efficient collection of used products and resistance to greater industrial collaboration, are overcome.

It claims that rather than investing in recycling and waste incineration plants, UK businesses could extract more value by shifting directly to a circular economy approach. Such a move needs government support, however, potentially including regulation to ensure “circular-economy” products can effectively compete.

The Aldersgate Group illustrates the need for regulation through the example of the carpet manufacturer whose circular-economy-based product has to compete against “one-use” products that are disposed of in landfill at end of life. It says that the market share of circular-economy carpet is rising in EU countries where landfill disposal of carpet is prohibited.

The report highlights the need for products to be designed to ensure materials can be easily extracted. “Approximately 80% of a product’s environmental impact is locked in at design stage, so understanding production cycles and reconfiguring them for maximum effectiveness is essential,” it says.

The ESA, the waste management association, also wants companies to improve product design, so products are more durable, repairable, reusable and/or recyclable. It has called on EU policymakers to demand companies design their products to take account of what will happen to them after they have been used and discarded.

“We would like to see more work being done on improving product design, so that those harder to recycle composite products and materials do not end up in landfill,” said ESA acting chair Ian Goodfellow.

Meanwhile, the Green Alliance has launched a new business taskforce, including AllianceBoots, BASF, Interface, Kyocera and Veolia, to tackle the threat of rising resource costs.


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