How to develop a Circular Economy to help the Environment


Despite new environmental, social and governance (ESG) initiatives helping companies become more sustainable, the world is not yet on track to remediate the worst effects of climate change. The crisis is reaching a critical point, as the planet’s temperature must decrease in the next few decades to avoid irreversible breakdown.

One strategy companies in various industries could implement to increase their sustainability levels is creating a circular economy. What is a circular economy, and how can companies develop one for their operations?

The Circular Economy Trend

A circular economy is an economic system in which products, materials and services are kept in circulation for as long as possible.

The ultimate goal of a circular economy is to engage in industrial processes and activities that are restorative or regenerative by design. Instead of recycling products or materials at the end of their life cycle, they are specifically designed to be reused, recycled or regenerated in some way, shape or form.

Benefits of Building Circular Economies

There are several benefits businesses can reap by creating a circular economy. It reduces energy, materials and resource consumption, reduces waste, decreases production costs and helps fight climate change.

Circular economies are becoming increasingly popular in the EU, influencing many regulations and legislation countries must comply with.

Why Are Circular Economies Important?

New World Research Institute (WRI) research suggests that circular economies effectively fight climate change. WRI lists three strategies that can help protect the environment:

  1. Complement decarbonization measures to reduce greenhouse gas emissions.
  2. Support the sustainable scaling of the clean energy transition.
  3. Enhance adaptation to a changing climate.

Reducing GHG emissions is a top priority for any company looking to become more sustainable. Some nations are better prepared to handle the clean energy transition, while others — like the United States — lag behind.

Due to increased human activities, it might be challenging to eliminate the effects of climate change. However, the WRI claims that circular economies can bolster nations’ resilience, enabling them to adapt more easily and effectively to the changing climate.

How to Create a Circular Economy

Here are some of the specific ways in which businesses can create a circular economy.

1. Adopt Circular Product Designs

A core tenet of a circular economy is to use products with circular designs. Using more sustainable products and materials can help companies avoid waste.

For example, single-use plastic bags are one of the most harmful items to the environment. In some states, major corporations like McDonald’s and Walmart must follow laws that do not allow stores to hand out products in plastic bags. Companies can use circular materials and products, allowing them to be reused, regenerated or recycled more efficiently.

2. Reduce Consumption

Using nonrenewable resources is inevitable for companies in specific industries, like oil and gas. Fossil fuels are still heavily used in the industrial sector. Companies must reduce their consumption in terms of energy, water, paper, plastic and anything that negatively impacts the environment.

Companies should take inventory of all th

e resources and materials they use daily and look for opportunities to replace them with affordable, eco-friendly alternatives.

3. Reuse, Repair or Rebuild When Possible

As opposed to replacing products or materials, reusing, repairing, and rebuilding can help businesses create a circular economy. For example, the construction and engineering industry can rebuild heavy equipment to increase its longevity, allowing companies to save on replacement costs and keep equipment in circulation.

In addition to reducing resource consumption, companies can better use what they already have to contribute to a healthy, circular economy.

4. Spread Ideas to Clients and Consumers

This step has no tangible benefit, but encouraging clients and consumers to adopt more sustainable-minded, eco-friendly practices can help build a circular economy.

For circular economies to become more commonplace, clients, consumers and corporations must do their part to keep products and materials in circulation. Sparking systematic change takes time, but it’s a worthwhile endeavor that’s necessary to create a lasting future for upcoming generations.

Creating a Circular Economy for a More Sustainable Future

Businesses play a significant role in combating climate change. Like raising a child, it’ll take a village to prevent the devastation brought about by environmental damage.

Companies of all types and sizes should adopt sustainable practices and create a circular economy, as they can significantly impact the environment. Consider using the tips above to build a circular economy and see all its benefits.


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