Circular Economy — And How To Make It A New Way Of Life And Business

In 2005, Ellen MacArthur became the fastest solo sailor to sail around the world. Travel and exploration of the kind that Ellen undertook, the one with a purpose, always has the uncanny ability to throw new insights at you. When you begin, you are quite sure of your goal and you do tend to achieve it but then as the journey unfolds, learnings come from some of the most unexpected sources. 

During her solitary 71 days at sea, Ellen had an up-close and personal encounter with our earth’s natural world. The fact that this happened on an expedition which was carried out with finite resources of food, fuel, life-supporting items and all things material, made Ellen connect the dots between the finite resources on her sailboat and the finite resources of our planet. A moment of epiphany of sorts happened and Ellen realized the truth we all need to know and accept: our planet has limited resources and we have built a fragile economic system and way of life that is using those resources at an accelerated pace. 

After her journey, Ellen decided to forgo her passion of sailing and instead decided to dive deeper into the solutions that can address this economic conundrum we had created for ourselves as human beings. She met CEOs, academics, climate scientists, engineers, etc., and understood that there was a need to shift the way in which we do business and run our economy. She set up the Ellen MacArthur Foundation, which in the past decade or so has done path-breaking work on addressing the very issue of how do we transition from a Linear Economy model that is based on extraction, use and throwing away to a Circular Economy model where we stop wasting and reuse everything.

Ellen is not alone and is in the august company of a large number of thinkers, leaders, and scientists who believe that transitioning to a Circular Economy is a systems solutions framework to address issues of climate change, pollution, biodiversity loss and waste. A Circular Economy, therefore, can simply be defined as a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible. 

The United Nations Conference on Trade and Development further elaborates that, “A circular economy entails markets that give incentives to reusing products, rather than scrapping them and then extracting new resources. In such an economy, all forms of waste such as clothes, scrap metal and obsolete electronics, are returned to the economy or used more efficiently. This can provide a way to not only protect the environment, but use natural resources more wisely, develop new sectors, create jobs and develop new capabilities.”

In essence, a Circular Economy is based on three essential design principles:

• Eliminate waste and pollution.

• Circulate products and materials—at their highest value.

• Regenerate nature.

From large businesses to new-age startups, across the globe, business leaders and entrepreneurs are trying to imbibe these design principles in their business processes, product designs and the very way they do business. Some of the innovations they are bringing forth to the market are redefining the markets of these products and services themselves. 

Let us take the example of the fashion industry. Every year, millions of clothes are produced and then thrown away. It is a classic Linear Economy business model, where companies thrive on the fact that people will keep throwing away old clothes and will want to buy new ones. This means there has to be a rethink on the very idea of fashion itself, and some innovative entrepreneurs are just doing that.

Napapijri in Italy has redesigned the way jackets are made so that the entire jacket can be recycled through a toxin-free process. The U.S.-based ThreadUP has created a platform to buy and sell secondhand clothes. Vestiaire in France is doing the same and predicts that by 2027, secondhand clothing will make up 11% of a consumer’s wardrobe. But major clothing brands are not lagging behind either. H&M Group, the Swedish company which is the second largest fashion company in the world, has committed to bringing in circularity in their product design, so that they last longer, in their supply chains and in their customer experience.

Food and agriculture is one more sector where massive breakthroughs are being achieved to reduce the colossal waste of food globally and improve the way agriculture uses our planet’s natural world. The framework developed by the International Union for Conservation of Nature on nature-based solutions is most instrumental here. As per IUCN, “Nature-based solutions are actions to protect, sustainably manage, and restore natural and modified ecosystems that address societal challenges effectively and adaptively, simultaneously benefiting people and nature.” The IUCN has even developed a standards system to further this idea.

Circular businesses such as California-based Apeel has developed a layer of edible, plant-based coating that can be applied to fresh products that mimics and enhances the natural defenses of fruits and vegetables. This eliminates the need of plastic shrink wrap and reduces oxidation at the same time. The U.K.-based CCm Technologies has developed a process that turns byproducts from industrial and waste processing facilities into tailor-made fertilizer products.

As per a report released by Venture Capital firm Kalaari Capital, Indian startups in the circular economy have attracted close to $1.8 billion in investments from 2016 to 2021. Entrepreneurs like Rhea Mazumdar Singhal, founder of Ecoware—India’s first and one of the largest sustainable packaging companies—are paving the way for many young entrepreneurs to explore opportunities in the Circular Economy.

Ecoware was started in 2010, when there was less awareness about circular businesses. They take crop waste and convert it into serving cutlery and products. One of Ecoware’s largest customers is the Indian Railways. For her enterprising work, Rhea was awarded the Nari Shakti Puraskar in 2019 by the Hon. President of India. 

Businesses like Rhea’s needs much more than the entrepreneur’s passion to bring a new way of business to the market place. It needs consumer awareness, supply chain support, access to viable finance and, most importantly, a future-thinking policy framework. Policymakers often confuse recycling legislations with circular economy policies. Recycling begins at the end—the ‘get rid’ stage of a product’s lifecycle. The Circular Economy comes in at the start of the process to prevent waste and pollution from being generated in the first place. A different paradigm indeed. For this, we will need to take inspiration from nature, where nothing truly is wasted. In the natural world, often waste from one species can be the food to others and one ecosystem will take the unused resources from another and transform it into something useful for itself. 

To ignite this kind of thinking, we need to bring circularity and nature-based solutions into our textbooks. We need to teach engineers the laws of the natural world and we need to empower biologists and agriculturists with new technologies. We need cross-pollination, collaboration and co-learning to happen across sectors and between private and public spheres too. But most importantly, we need leadership. Public and private leadership that will commit itself to transitioning from the way we do business, the way we think about our economy and the way we live, into a more resource-smart and circular way of life.

We may think we have time and we may fool ourselves in thinking that we have a choice here—the truth is far simpler. We have only one home—this planet—and as Ellen MacArthur discovered, our planet has limited resources and to sustain our way of life, we will need to use them judiciously, preserve them, conserve them and regenerate them.

The good news is that the natural world can be our biggest teacher and ally in this expedition, of course only if we ourselves are willing to take this path-finding journey.

Bhairavi Jani is an entrepreneur and author of Highway to Swades: Rediscovering India’s Superpowers (HarperCollins India). 

The views expressed here are those of the author, and do not necessarily represent the views of BQ Prime or its editorial team.