Glossary

1.3 Environmental, economic, and social drivers for circularity

3 min read•august 9, 2024

The world is facing major environmental challenges like resource depletion and climate change. These issues are pushing us towards a circular economy, where we use resources more efficiently and reduce waste. It's not just about saving the planet - it's also good for business.

Companies are realizing that going circular can save money, spark innovation, and create new jobs. Plus, customers and governments are demanding more sustainable practices. The circular economy isn't just a trend - it's becoming necessary for long-term success in today's world.

Environmental Drivers

Resource Depletion and Climate Change Impacts

Top images from around the web for Resource Depletion and Climate Change Impacts

1 of 3

Top images from around the web for Resource Depletion and Climate Change Impacts

1 of 3
  • Resource scarcity accelerates as global population growth and consumption patterns strain finite natural resources
  • Overexploitation of raw materials leads to environmental degradation and ecosystem disruption
  • Climate change exacerbates resource scarcity through altered precipitation patterns and extreme weather events
  • Rising global temperatures result in sea level rise, threatening coastal communities and infrastructure
  • Increased frequency and intensity of natural disasters (hurricanes, droughts, wildfires) disrupt supply chains and economies
  • Circular economy principles address resource scarcity by promoting regenerative practices and

Waste Management Challenges and Sustainable Development

  • Waste management issues intensify due to increasing global waste generation and inadequate disposal methods
  • Landfills emit greenhouse gases (methane) and leach harmful chemicals into soil and groundwater
  • Plastic pollution in oceans threatens marine ecosystems and enters the food chain
  • Circular economy approaches prioritize , reuse, and recycling to minimize environmental impact
  • Sustainable Development Goals (SDGs) provide a framework for addressing global environmental challenges
    • SDG 12 (Responsible Consumption and Production) promotes sustainable resource use and waste reduction
    • SDG 13 (Climate Action) emphasizes the need for urgent action to combat climate change and its impacts
    • SDG 14 (Life Below Water) and SDG 15 (Life on Land) focus on protecting and restoring ecosystems

Economic Drivers

Economic Resilience and Resource Efficiency

  • Economic resilience improves through reduced dependence on volatile raw material prices
  • Circular business models create new revenue streams from waste streams and underutilized assets
  • lowers production costs and enhances competitiveness in global markets
  • Circular economy principles help businesses mitigate supply chain disruptions and resource shortages
  • Extended producer responsibility incentivizes companies to design products for longevity and recyclability

Innovation and Job Creation in the Circular Economy

  • Circular economy drives innovation in product design, materials science, and business models
  • New technologies emerge to support circular processes (3D printing, IoT, AI, blockchain)
  • occurs across various sectors:
    • Repair and refurbishment services
    • Reverse logistics and waste management
    • Sharing economy platforms and collaborative consumption models
  • Circular economy fosters entrepreneurship and the development of new markets
  • Skills development and training programs emerge to support the transition to circular practices

Social Drivers

Corporate Social Responsibility and Stakeholder Expectations

  • Corporate Social Responsibility (CSR) evolves to include circular economy principles
  • Stakeholders (consumers, investors, employees) demand greater environmental and social accountability
  • Companies adopt circular practices to enhance brand reputation and maintain social license to operate
  • Transparency in supply chains and product lifecycles becomes increasingly important
  • Circular economy initiatives contribute to community development and social well-being

Regulatory Pressures and Policy Frameworks

  • Governments implement regulations to promote circular economy practices:
    • Extended Producer Responsibility (EPR) schemes
    • Landfill bans and waste reduction targets
    • Tax incentives for circular business models
  • International agreements (Paris Agreement, Basel Convention) drive global action on environmental issues
  • Circular economy strategies align with and support the achievement of multiple Sustainable Development Goals:
    • SDG 8 (Decent Work and Economic Growth) promotes sustainable economic practices
    • SDG 9 (Industry, Innovation, and Infrastructure) encourages the development of resilient infrastructure
    • SDG 11 (Sustainable Cities and Communities) focuses on creating inclusive, safe, and sustainable urban areas

Key Terms to Review (18)

Circular Supply Chain: A circular supply chain is a system that focuses on the continuous use of resources, aiming to minimize waste and create a closed-loop process where materials are reused, recycled, or repurposed. This approach shifts the traditional linear supply chain model towards one that integrates sustainability, driving environmental, economic, and social benefits. By emphasizing resource efficiency and responsible sourcing, circular supply chains align with the goals of sustainable development.
Circularity Assessment: Circularity assessment is a method used to evaluate how well a product, service, or business model adheres to the principles of a circular economy. This process examines various factors such as material use, waste generation, and resource efficiency to determine the sustainability and environmental impact of a system. By analyzing these elements, businesses can identify areas for improvement and track their progress toward reducing negative impacts on the environment while fostering economic and social benefits.
Circularity Index: The circularity index is a quantitative measure that evaluates how well a product or system aligns with circular economy principles by assessing its ability to maintain resources in use, minimize waste, and promote sustainable practices. This index connects directly to the understanding of how circular models differ from linear ones, emphasizing resource efficiency, waste reduction, and closed-loop systems.
Closed-loop systems: Closed-loop systems refer to processes that recycle materials back into the production cycle, minimizing waste and reducing resource consumption. This approach emphasizes the continual reuse and refurbishment of products, fostering sustainability while enhancing economic efficiency and social equity.
Community Engagement: Community engagement refers to the process of involving individuals and groups in decision-making that affects their lives and environment. This concept is crucial for building relationships, fostering collaboration, and enhancing the overall sustainability of initiatives aimed at promoting circularity. Effective community engagement can lead to increased awareness, participation, and a sense of ownership among community members, making it an essential driver for implementing circular economy practices at local and regional levels.
Consumer Awareness: Consumer awareness is the understanding and knowledge that a buyer possesses regarding the products and services they purchase, including their implications for health, safety, and the environment. This concept emphasizes the importance of consumers making informed choices that consider the environmental impact of products, contributing to sustainability and circular economic practices.
Cost Savings: Cost savings refers to the reduction of expenses in the production and operation processes, achieved through more efficient use of resources, waste reduction, and innovative business practices. This concept is crucial in promoting sustainability and economic viability, as it encourages businesses to minimize costs while maximizing resource efficiency, thereby driving the transition towards a more circular economy.
Cradle to Cradle: Cradle to Cradle is a design philosophy that promotes the idea of creating products and systems that contribute positively to the environment, by ensuring that materials can be reused or recycled indefinitely. This approach contrasts with traditional linear models that focus on a 'take, make, dispose' mindset, advocating for sustainable practices that benefit both the planet and society through continuous cycles of production and consumption.
De-materialization: De-materialization refers to the process of reducing the quantity of materials used in production and consumption without sacrificing utility or functionality. This concept is crucial for promoting circularity, as it aims to minimize resource extraction and waste generation, thereby addressing environmental concerns while also creating economic and social benefits.
Ellen MacArthur Foundation: The Ellen MacArthur Foundation is a UK-based charity that aims to accelerate the transition to a circular economy by inspiring and educating business, academia, and government. The foundation promotes the principles of circularity through various initiatives, research, and collaborations with different stakeholders, advocating for systems that minimize waste and make the most of resources.
Job Creation: Job creation refers to the process of generating new employment opportunities within an economy or community. It is a vital aspect of economic growth and development, often driven by innovation, investment, and the shift towards more sustainable practices, particularly in circular economies. By embracing circular approaches, businesses can not only reduce waste and resource consumption but also stimulate new industries and services, thereby enhancing job opportunities across various sectors.
Life Cycle Assessment: Life Cycle Assessment (LCA) is a systematic method for evaluating the environmental impacts of a product, process, or service throughout its entire life cycle, from raw material extraction to disposal. It provides valuable insights into the resource usage and environmental consequences of various stages, aiding in decision-making for sustainable practices and circular economy strategies.
Product-as-a-service: Product-as-a-service (PaaS) is a business model where products are offered to consumers as a service rather than sold as physical goods. This model encourages manufacturers to retain ownership of their products, allowing them to focus on delivering value through use while promoting sustainability by minimizing waste and resource consumption.
Regenerative Design: Regenerative design is an approach to creating products, systems, and environments that restore and enhance ecological health, social equity, and economic viability. It focuses on designing with the intention of improving the conditions of the ecosystems and communities involved, rather than merely minimizing harm. This concept connects deeply with the values of sustainability and circularity, emphasizing that design can be a catalyst for positive change across environmental, economic, and social dimensions.
Resource Efficiency: Resource efficiency refers to the strategic use of resources to minimize waste and maximize productivity throughout the lifecycle of products and services. This concept is integral to the circular economy, emphasizing the need for smarter, more sustainable practices that not only enhance economic growth but also benefit the environment and society.
Resource Productivity: Resource productivity refers to the efficiency with which natural resources are used to produce goods and services, aiming to maximize output while minimizing input. This concept is crucial for promoting sustainable economic practices, as it focuses on reducing waste, lowering resource consumption, and enhancing overall efficiency in production processes. By improving resource productivity, businesses can support environmental sustainability while also driving economic growth and creating social value.
Take-back Schemes: Take-back schemes are programs designed to encourage consumers to return used products to the manufacturer or retailer for recycling or proper disposal. These schemes not only facilitate responsible waste management but also support circular economy principles by reclaiming materials and reducing the environmental impact of waste.
Waste Reduction: Waste reduction refers to the practice of minimizing the amount of waste generated by rethinking and redesigning processes, products, and consumption habits. This concept is crucial for promoting sustainability, enhancing resource efficiency, and aligning with circular economy principles by conserving resources and reducing environmental impact.
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.
Back
Practice QuizGlossary
Practice QuizGlossary
Next guide