The circular economy is a method of resource utilization, based on the principles of reduction, reuse, and recycling. This system seeks to reduce the amount of resources we use by minimizing production and reusing elements that can't be returned to the environment. Its goals include reducing the waste in the manufacturing process and maximizing the value of the elements that can be re-used.
Reuse
Reuse is the concept of reusing products or materials. It has multiple applications and affects companies on different levels. For example, if the construction industry is planning to build new buildings in the future, it will be helpful to use modular construction systems that allow for easy deconstruction and reuse of individual components.
Repair
Repair is one of the most important elements of a circular economy. In the current linear global economy, the manufacturing and retail industries have a vested interest in preventing people from repairing products. They are able to avoid costs by designing products that are difficult to repair. Furthermore, they can avoid labour costs by not stocking spare parts or labour skills to repair products.
Remanufacture
Remanufacturing, an important part of the circular economy, involves the reuse of parts and components of durable products in order to create new products. It is a profitable process for manufacturers, and it has many societal benefits as well. However, there are some challenges to overcome in order to make remanufacturing a widespread practice. Typically, these challenges are caused by the existing incentives and policies of individual enterprises, but they can be overcome with the appropriate commitment from management.
Asset sharing
The concept of asset sharing is a key component of the circular economy. The use of shared assets reduces waste and the cost of purchasing new products. In addition, these models help create a more efficient system by enabling organisations to share their assets among their stakeholders. While many solutions rely on reducing the use of scarce resources, asset sharing is an emerging practice that can benefit organisations in many ways.
Resilience
Resilience is an important aspect of a circular economy. Yet there are few studies that explore this topic. Resilience is often defined in terms of how resilient a system is. Resilient systems are ones in which diversity and buffers exist.
Diversity
In the circular economy, diversity is key for effective collaboration, innovation and inclusion. Diverse backgrounds, skills, values, and perspectives allow for better design of new business models. This is crucial because different sectors cannot work alone to achieve the same goal. Furthermore, diversity is the basis for inclusive and tolerant work environments.
Inclusivity
To achieve sustainable development and equity, the circular economy must be inclusive. Inclusivity is key to achieving the 2030 Development Agenda, a set of 17 goals aiming to eliminate poverty, protect the planet and improve human well-being. This ambitious agenda requires the active participation of all sectors of society. Inclusiveness is especially important because progress on one SDG impacts on others.
Reducing dependence on finite resources
Circular economy is a business model that focuses on reducing the dependence on finite resources by reducing the need for raw materials and energy. This strategy improves resource performance and combats climate change. The benefits of this model are both strategic and operational, and it has the potential to create tremendous value for businesses and society. One of the biggest benefits is that the circular economy uses renewable sources of energy that are less polluting than fossil fuels. It also decreases production costs and dematerializes materials. This approach also views waste and residues as valuable materials.