In today’s episode of The Art of Buying Sustainable Products, we will try to explain, in the simplest terms possible, what it takes for a product to be circular and how there is a difference between being potentially circular and being circular.
The most important thing to start with is, of course, the basic definition of the Circular Economy. The most recognised definition of the Circular Economy has been recently formulated by the Ellen MacArthur Foundation (EMF), an organization working to promote its application at a global scale, and says:
The Circular Economy is an economy that is restorative and regenerative by intention and design and it is based on the three following pillars:
Design-out waste and pollution;
Keep materials and products in use;
Restore natural capital
(if you are interested in learning a bit more about the how it compares to sustainability you can have a look at this article we wrote a few weeks ago - Sustainability vs Circularity)
To translate this definition into more simple terms, the Circular Economy provides a strategy, and a framework, to make and use products in a way that would allow us to reduce our need to extract virgin resources, reduce the pollution of our planet (externalities) and support the regeneration of the natural capital that sustains human life on Earth.
Moreover, by analyzing more in details the wording used in the EMF definition, we would find 3 elements that are key for its correct interpretation: Desing, Regeneration/Restoration and Keep in Use. It’s important to have all these three aspect clear in mind because way too often, also within the industry operators, people tend to associate the circular economy only with the increased efficiency in collection and recycling of waste, which is quite wrong.
Along with the definition, the EMF has also designed another important tool to help us understand and apply the Circular Economy. It’s the Butterfly Diagram. While apparently very complex the diagram provides a very schematic description of the circular economy. Before we go deeper into the description of the diagram, we have to introduce another element that we need to become familiar with when approaching the Circular Economy. It is the concept of Life Cycle. Life cycle refers to the different stages, or processes, a product goes through from the design to the end-of-life. While in the current linear economic model this life cycle is an open-ended linear flow of take-make-waste, in the circular model the life cycle is represented through a closed loop to indicate that we should and we can make products that can be maintained in a closed flow of utilization.
This is exactly the message expressed by the Butterfly Diagram. But let’s go by steps and let’s try to understand how to properly read it. The first important element is the distinction between the flows of materials (green and blue) depending on their nature (biological or technical). To each flow, in fact, is associated a different life cycle alternative. On the one hand, there are biological materials that are renewable and, if not contaminated, they naturally become feedstock (or simply food) for new biological processes or can be transformed into (almost carbon neutral) energy. On the other hand, technical materials, that are finite, require human intervention to keep them in a closed-loop. Two more things we should consider for technical materials are the fact that they require other inputs, such as energy for processing and transformation, and that the finite product has a utility value that is usually higher than the value of the materials of which it is composed. Therefore, the closer its stays to the utilization phase the less external inputs are required and, therefore, the more its highest value is maintained. Overall, the goal is to minimise system leakages in order to reduce the need for virgin input at the beginning of the loop.
How can we actually design such a system? That’s where the three key factors we mentioned before come into play in creating the vision for such a transformation.
Design - Design has always played a very important role in determining the success of a product. However, design can also influence its durability, repairability and its environmental impact. Consider, for example, that most business models are based on product sales and that they are not accountable for the social and environmental externalities generate.Therefore, their goal is to produce and sell as much as they can while minimizing production costs. The circular economy says, we can intentionally design products to last longer, be repairable and have a positive impact on the environment while still being able to generate profits for businesses. It’s a matter of rethinking how we design both products and our business models to have businesses that make profits by maximising the life-cycle of products.
Regeneration - It’s quite clear that the methods we use to produce economic output are having quite a devastating effect on Nature. From air, water and soil pollution to biodiversity destruction we are mining at the very basic conditions that allow our society to thrive. What if we could not only protect, but actively improve the environment? A circular economy avoids the use of non-renewable resources and preserves or enhances renewable ones, for instance by returning valuable nutrients to the soil to support regeneration, or using renewable energy as opposed to relying on fossil fuels. What is very important to consider here is the fact that it’s not enough to use a renewable resource, but it’s also the rate at which this resource is exploited that make the difference. Renewable resources need the time of biological cycles to be restored and regenerated and if we exploit them at a rate faster they are not renewable anymore.
Keep in Use - It’s no secret that we have a waste problem and that’s a direct consequence of the linear model on which our economy is based. As we said earlier, businesses make money through sales, they have no responsibility for the management of the end-of-life of a product and they are more efficient at extracting resources than recovering those that are not in use anymore. The circular economy proposes a model in which businesses can generate value by giving access to a product, rather than selling it (it’s called product servitization). In such a model, it would be in their interest to make the products, and the materials they are made of, to last as long as possible without the need to keep making new products and extracting new resources. To do so, we need to design products that are Durable, Repairable, can be remanufactured or Recycled.
As it happens for sustainability, however, information asymmetry (the fact that businesses have more information than consumers on the actual value and features of a product) and the fact that the Circular Economy is still unknown to the most, is making it easier for businesses to market their products as circular even if they don’t actually have all the features required. It is the case, for example, of businesses marketing their product as circular since the materials they’re made of can be theoretically recycled. Well, even if that truly applies, it can still be considered as a nice greenwashing attempt if there is no proper infrastructure to recycle it.
If you want to spot a truly circular product, here a few things you want to look at:
Material - This is something you may be already familiar with since it is one of the most discussed aspects also when it comes to product’s sustainability. However, there are some differences between the two approaches. In fact, while sustainable indicators look mostly at the environmental impact (or footprint) of using a material rather than another (i.e. plastic vs aluminium for packaging) the circular economy also looks at how that material fits into the butterfly diagram and for how long it can be kept in a closed loop. That’s why aluminium is many times preferred to plastic. Even if it has a higher production footprint it can be kept in closed loop for an almost endless amount of time while most plastics degrade after the first use. Then, considering the amount of waste we are generating nowadays, we also want to look at whether the material comes from a primary or secondary feedstock (is it a virgin material or is it recycled?). Prioritize secondary feedstocks and in case it is a virgin material, make sure it is farmed or mine by preserving and restoring the local ecosystem (for example organic or regenerative organic methods for farmed materials).
Production Then you want to make sure that the production process uses only renewable inputs and does not produces any externality such as greenhouse gas emmissions or water pollution and soil pollution.
Production - Here you want to make sure that the production process uses only renewable inputs, including energy, and does not produce any externality such as greenhouse gas emissions or soil and water pollution. If they are also able to minimise the process waste generation by recovery energy and material waste, that would be a true circular production process.
Utilisation and Post-utilisation - This is where the circular economy brings most of the innovation compared to the traditional linear model. It starts by proposing, as mentioned earlier, access to products as an alternative to product ownership. This is connected to the concept of maximizing the utilization of a product and, thus, extracting the most of its value. In this way the ownership stays in the hands of the businesses that are incentivized to keep it in a closed loop of utilization by offering repair, remanufacturing and recycling services.
There is, actually, a pyramid of priorities that helps you measure the circularity of a product:
Of course renting a product is not the only way to apply a circular model. Also a business selling its products can adopt a circular business model. However, the claims or repairability or recyclability are not enough. The element that really characterizes the circular commitment of a business is the Extended Producer Responsibility. In other words, how much is a business taking responsibility for the lifecycle of its products. Can I have access to an affordable repair service, does it offer the support and the infrastructure to return or recycle the product or the packaging when it’s not usable anymore? Or, does it allow for external service providers to support with such services?
We are at the very beginning of the circular transformation and there are hight technological, financial and knowledge barriers, especially for small businesses, to successfully implement such models. However, we can find already many small brands implementing innovative business models that put consumers and circularity at the core of their mission and now you have the basic tools to spot them.