What Is a Circular Economy?
Sustainability is a hot topic in today’s economy, and many businesses and consumers are searching for ways to make decisions with sustainability in mind. Though there are many different ways for businesses to implement sustainable practices into their organizations, one that is encouraged by the Environmental Protection Agency (EPA) and also can save businesses time and money is by implementing the practices of circular economies into their operations. Read on to find out what a circular economy is, how it benefits sustainability efforts, and how businesses can start implementing these principles into their operations.
What is a Circular Economy?
A circular economy is an economic system that keeps products, materials, and services in circulation for as long as possible. The EPA describes circular economies as involving “industrial processes and economic activities that are restorative or regenerative by design [enabling] resources used in such processes and activities to maintain their highest value for as long as possible, and [aiming] for the elimination of waste through the superior design of materials, products, and systems (including business models).” This means that circular economies reimagine the way that businesses use materials, create products, and how they structure their services with the goal of reducing the amount of waste and reusing resources for longer than the standard amount of time.
According to the Ellen Macarthur Foundation, which is at the forefront of the circular economy movement, circular economies are based on three main principles, all of which are centered on improvements in the design process:
Eliminating waste and pollution
Circulating products and materials
Regenerating nature
By keeping these principles in mind, circular economies create sustainable processes with a multitude of benefits for both the businesses implementing them and their communities as well as the environment at large.
What Are the Benefits of Circular Economies?
The EPA has identified circular economies as one of the keys to slowing climate change. Reusing materials and focusing on processes that reduce waste mean that not only is there less waste ending up in landfills, but there is also no need to create new materials. By not creating new materials, circular economies reduce pollution and have also been linked to a lowered loss of biodiversity since natural resources are not being mined or otherwise extracted, reducing the amount of natural habitats being destroyed by these processes.
There are also economic benefits to circular economies since the reuse of materials and processes means that businesses are not continuously spending money on new materials. This means that if someone is trying to start a new business, they won’t need as much capital to keep the business running, which makes starting a new business endeavor more accessible for people from different backgrounds and socioeconomic statuses.
ThredUP’s Circular Economic Style
An example of a popular company that is employing circular economy practices is ThredUP, the world’s largest online consignment store. Consumers can shop the curated fashions and styles that are on ThredUP much like they would on the average online store, which makes it more accessible than traditional in person thrift stores. People from all over the world can request a “clean out bag” from the company, which they will then fill with clothes they no longer need and send in to be sorted by ThredUP. ThredUP then pays for clothes that they plan to resell, and the person who sent them in can either send back clothes they choose not to resell or leave them with ThredUP to have them recycle the materials. This keeps clothes out of landfills and can give the clothes a “new life” with a new owner. Plus, the clothes that ThredUP keeps that they don’t sell are still appropriately distributed – according to their website, they have a few options for where the clothes go: they may be sold in physical thrift stores, donated to various charities, or recycled as textiles. To date, ThredUP has diverted approximately 100 million items from going into landfills.
ThredUP is implementing circular economic principles by keeping a product, in this case clothing, in the marketplace for longer as well as finding ways to repurpose the clothing as textiles if the product is no longer viable for its intended use. Not only are they making a profit by reselling the clothes, they are also saving time by having consumers come to them to sell their clothing. Their efforts positively impact the environment by keeping waste to a minimum and keeping items in circulation for a longer period of time, which also benefits consumers since they aren’t paying the full price they may have if they were buying their items new.
Do Your Part
Circular economy practices benefit businesses, consumers, and the environment, and implementing those practices are a crucial part of slowing the pace of climate change and creating sustainable business practices. If you’re interested in learning more about how to start a business using circular economy ideas or just implement the principles in your current business or organization, RIT Certified’s Circular Entrepreneurship course is the perfect way to get hands-on experience and training with implementing these principles in real world settings.