5 ways to make economic circularity a reality

Each year we are using up resources as if we lived on 1.7 Earths. This ecological overshoot is unsustainable. Building a global circular economy would recycle the resources we currently discard back into use. It also represents a potential $4.5 trillion economic opportunity.

Companies and organizations that embrace designing economic circularity into their operations can achieve tangible benefits for themselves and consumers. There may be steep hurdles to jump on the road to economic circularity, but there is also optimism that with a shift in thinking, public buy-in and strong collaboration, positive, practical solutions are within our reach. 

Here are four key things required to shape economic circularity.

1. Embrace systemic thinking

A circle is a simple shape in principle, but it is notoriously difficult to draw a perfect one in practice. The same is true for economic circularity. Achieving economic circularity is complex; it requires the cooperation of global industries and the reworking of the value chains that support the products we buy and consume daily, from bottles of soft drinks to the phones in our pockets. 

While many businesses are working on sustainability projects, these efforts often remain siloed. We cannot construct a circular economy one piece at a time. Instead, it requires “systemic thinking” – connecting industries, government bodies, and consumers through coordinated policies and partnerships designed to implement circularity across multiple activities. By embedding this mindset within strategic planning in both the public and private sectors, individual circular economy projects can be designed to achieve circularity across the entire value chain. 

2. Harmonize regulation

Systemic thinking is also critical when it comes to shaping the regulatory landscape. For example, there are regulations that prevent circular projects from competing on an even footing against other subsidized industries – think green fuels like biofuel, green hydrogen and sustainable aviation fuel (SAF) trying to compete with fossil fuel subsidies.
 
Similarly, regulations can differ across countries and regions, creating difficulties, such as transporting waste across emirate lines within the UAE. If systemic thinking is applied by the regulators, then we can achieve “harmonization” of regulatory frameworks that will make it financially beneficial and operationally simpler for companies to “reduce, reuse, recycle” a given value stream. 

3. Go beyond recycling

When it comes to the “three Rs”, recycling grabs headlines, but the most impactful circular strategies are reducing and reusing materials long before recycling becomes necessary. Burning waste for energy, known as waste-to-energy (WTE), should be a last resort. 

Companies can focus on “reduce” and “reuse” in several ways:

• Redesigning products and their packaging to minimize material usage and remove problematic single-use flexible packaging from their value chain.
• Using automation to eliminate value chain errors, upgrading their circular potential.
• Collaborating with partners to find novel solutions.

4. Create consumer-focused education and incentives

Education, financial incentives, and creative approaches can drive this shift towards circularity, both for company and consumer behavior. Many organizations are also finding ways to make circular decisions to benefit consumers. Examples include the reuse of office furniture that would otherwise go to landfill; extending the lifecycle of higher value items like phones, tablets and computers through the “right to repair”; or encouraging reuse through financial incentives and bottle deposit systems like Germany’s Pfand.

Efforts to embed circularity into the mindset of consumers should be as unobtrusive as possible. Instead of resorting to pressure, fear or guilt-based messages, creative circularity messages should be frictionless and rewarded so that the consumer sees tangible financial benefits alongside the more holistic environmental ones. But beware “style over substance”. Younger consumers will see through it. Instead, simple, plain messaging should aim straight for the heart of the problem. 

Closing the loop

Achieving a circular economy isn’t about reinventing the wheel—it’s about connecting the right gears. We already have many of the tools we need. What’s missing is transformative coordinated action, bold policy reform, and a shared commitment to integrated, circular design. Together, we can close the loop and build a sustainable future.

Discover other key takeaways for companies and consumers to help shape economic circularity in the ADSW Advisory Committee Insights Report: Securing the Circular Economy.