Is a Circular Economy Our Future?

Company leaders are shifting to more sustainable approaches and considering ways to educate consumers on circular thinking, and it’s working. More than 80 percent of consumers believe their choices and actions can help the environment.

By Marty Graham, Contributor

In a world where discarded plastic is choking sea-life and recycling is stumbling, there’s growing support for a new kind of economic model that turns away from planned obsolescence. The emerging idea of “circularity” recommends we plan the life of goods as a circle that starts at creation and includes re-creation, rather than the longstanding linear “make it, use it, discard it” approach.

But circularity isn’t based just on stepping up reuse and recycling: It challenges the very notion of creating disposable products, as well as the core idea of ownership. Why do the items we buy become no one’s once we’re done with them?

Corporate Interest Increases

A 2019 study by the Dutch bank ING, which was ranked fifth of 4,000 businesses worldwide for sustainability in 2017, found that interest in sustainability among 200 prominent CEOs has nearly doubled in less than two years.

Since 2018, corporate interest in advancing sustainability has grown from about 48 percent—with 29 percent very interested and 19 percent somewhat interested—to 85 percent, with 45 percent very interested and 40 percent reporting they are somewhat interested.

“While the figures aren’t in exact agreement, the general consensus is that the circular economy represents a multi-trillion dollar business opportunity,” the report concludes.

That’s where Dylan Lamb, co-founder of Holonic, a circular economy consultant group, comes in. The Perth-based leader has been taking ideas and practices learned in model cities including Zurich, named the world’s most sustainable city in 2016, and carrying them to Australian and U.S. companies.

Cradle-to-Cradle Thinking

“People think of [the circular approach] as recycling on steroids, but it’s a matter of going upstream and addressing the causes,” Lamb says. “Waste is a symptom of a linear economy. We are addicted to consumption and this linear system without thinking about the effects.”

“We need to make decisions across the whole product life span so that the end of the life is not the landfill.”

— Dylan Lamb, co-founder, Holonic

Sustainable economy calls for designing production that makes less waste, and that’s a tall order for many companies. Lamb and others refer to this as a shift in approaches, from “cradle-to-grave” to “cradle-to-cradle,” where the product’s lifespan includes upgrades, repairs, and reuses of its components.

“It’s smarter than making a product, using it for a very short period, and then burning it—and it’s a wicked challenge to companies to make this shift,” Lamb says. “We need to make decisions across the whole product life span so that the end of the life is not the landfill.”

Smartphone Pain

Take a look at electronics. The circular approach means rethinking our devices, starting with the phones we stuff into drawers when they became obsolete. In the U.S. alone, between 100 million and 120 million mobile devices are discarded every year.

Instead of obsolete trash, circularity considers those drawer-bound phones to be an asset.

“We look at assets in the use cycle—and work with the design so that their utility might change—there are all kinds of uses for a smartphone,” Lamb says. “It becomes a clock, a sensor, or, best-case scenario, it goes back to the manufacturer and the old model becomes parts that go into the new one.”

A step farther into the circle, our computers and phones stop being goods and, instead, become a service.

“In Zurich, rather than walking into an electronics store and buying a device, you can lease electronic devices based on their performance,” Lamb says. “It becomes product stewardship.”

In circularity, when people want more from their phones—the ability to stream more video or shift increased storage to the cloud, for instance—they turn them back in and lease a different phone, while the old ones gets upgraded or their parts go into making better phones. Instead of selling endless streams of ever more loaded equipment, a phone contract becomes a service that provides a phone tailored to each user. Many companies, including Apple, Dell, and Epson, have instituted programs that let loyal customers trade up.

In the Netherlands, a company called Fairphone is selling phones built to last longer—and then the company recycles them by taking out all useful and upgradeable parts. The current model, Fairphone 3, costs under $600, and is meant to last several years. It scores a 10 out of 10 from iFixit for repair-ability and promises that only fair-trade gold is used.

“It can be easily and immediately refreshed and reused, instead of designing them to throw away,” says Lamb.

So Much Change

Circular thinking requires a drastic shift for companies playing in a linear economy. When items are expected to last a year or two before they fail or become obsolete, there has to be a massive supply chain. But in a circular model, access to repairs and people with the required skills will become more common, and may even be included in the purchase.Lamb says that collaboration among competitors is one of the most important elements, if only for setting new industry standards. Standards, like those for packaging, will have to change to fit a no-waste model, he says. Lamb likes to remind people that milk used to be delivered to homes in glass bottles by someone who returned several times a week to collect empties and drop off fresh milk.

While circular ideas are taking hold in the food and agriculture industries, as well as electronics, other surprising companies are also growing from circular groundwork.

For many products, from flooring to electronics, changing the model can be subtle or dramatic. Start-ups are deeply involved because they are still developing their businesses, Lamb says. Local governments—from states looking at transportation planning to municipal trash collectors—are looking at the role they can play in supporting small businesses in promoting circular practices.

“We have the same conversation with companies we work with,” Lamb says. “How do we begin to shift to more sustainable approaches and how do we educate consumers so they understand and share our values?”

Consumers Are Key—and Interested

It falls to consumers to change both attitudes and behavior—and adjust to a different economy, Lamb says. Often, that means things will be more expensive and meant to last longer. Lamb believes that makers must tell the story of how things are made.

“Consumers are looking for differentiation, whether it’s a business with projects for social good or buying ethical products,” he says.

Consumers seem ready, according to ING. In 2019, the bank led another survey of about 15,000 consumers—5,000 in the U.S.—to learn how they view sustainability and corporate responsibility in their buying choices.

The results speak to the notion that consumers feel empowered. More than 80 percent said they believe their choices and actions can result in positive change for the environment. Just as important, 38 percent reported they have turned away from and even boycotted products and companies perceived to be less environmentally responsible.

Looking to the future, 61 percent said they would be less willing to buy products from companies that appear to disregard environmental responsibility and 49 percent say they would be willing to pay more for products that were being produced with care for the environment.

“What we need to do now is raise awareness that this can be done, and that everyone benefits,” Lamb says. “When people understand that they benefit by getting better products and service while the environment benefits because we take less and discard less, they will be interested.”