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Achieving Sustainability Via Circular Economy


Achieving Sustainability Via Circular Economy

Organizations and Governments worldwide are pursuing goals that are more environmentally friendly and generate the least negative externalities. The circular economy is a giant leap towards it as it contributes to greater resource efficiency and lower environmental burdens while simultaneously improving the multiplier effects on the economy (Haas et al., 2015; Yang and Feng, 2008). Companies that follow the path of the Circular Economy (CE) are able to create means to reduce operational costs through resource recycling and reuse (Park et al., 2010) and reach different audiences.

The United Nations’ International Resource Panel concluded that the Linear Economy model (also referred to as “take-make-waste” economy) of natural resource extraction and processing contributes to about half of all global greenhouse gas emissions. The circular economy, on the other hand, is aimed at slowing climate change, which is a prerequisite for sustainability. (Borros, et al., 2021)

There are myriad facets where the essentials of the circular economy can generate a sustainable impact. When it comes to cost management, the adoption of CE principles and practices allows companies to turn products that are at the end of one of their life cycles into resources for the conception of other/new products, ensures minimization of waste (Stahel, 2016) and simultaneously decreases the need for inputs of virgin materials (Haas et al., 2015). Regarding supply chain management, a circular economy provides a means of integrating its main concepts within existing management principles. Circular supply chain management encompasses the configuration and coordination of organizational functions within and across business units to close, slow, or narrow energy and material flow (McKinsey Report, 2015).

For basic consumer items, such as garments, the concept of a circular economy would envisage fabrics that are more prone to wear and tear, or styles that are made of recyclable waste, and can be updated while in use. For true consumables, such as food, it is essential to ensure that products are put in good use in their once-only life cycle (Ellen MacArthur Foundation Report, 2013).

Technology is an indispensable element for ensuring the smooth flow of a circular economy. According to the Department for Environment, Food and Rural Affairs, U.K., about 8 million tons of annual waste from households and restaurants in the UK goes to landfills, incurring about USD 1,230 million in disposal costs. With Anaerobic Digestion (AD) technology, also known as zero-waste technology, food waste can be converted into energy and fertilizer, which will generate a value of USD 60 per ton, outweighing the benefits of recycling from the costs.

New technologies (such as PHA bioplastic production from industrial wastewater) offer technology leaders vast opportunities. Veolia pioneered the production of bioplastics from sludges. Wastewater treatment systems often use bacteria that consume sludge and neutralize it into carbon.

Companies have been advancing the adoption of greater circularity not only to internalize more circular principles but also by requiring stakeholders to become more circular, for example, by selecting suppliers through environmental criteria, enabling products made from reclaimed materials, etc. (Borros, et al., 2021). Buren et al. (2016) claim that “pursuing a circular economy implies a fundamental transition of the society”. In Germany alone, through Circular Economy initiatives, biomass energy generated 44.6 billion kWh of electricity in 2022.

It is important that organizations accurately understand the circularity principles that help achieve sustainability by reducing waste, maximizing efficiency, and reducing environmental impacts.

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