The human race is facing a harsh reality: Earth’s resources are not infinite, and the ability to handle the amount of waste and pollution we generate is decreasing year after year at an alarming rate. If business-as-usual continues, global demand for resources could almost triple by 2050, exhausting Earth’s resources by more than 400%
Recognizing and understanding this decline can be discouraging, but acceptance is a positive first step to create change and shift our trajectory to a brighter and more sustainable future.
The question is, how do we conquer such a large task and work to reverse the damage already done? Simply consuming less will not get the job done because that only buys us some time and does not eliminate the root causes.
The answer? To move away from the wasteful “take-make-dispose” linear economy model we currently operate from and build an economy that uses things rather than uses them up. This concept is called a circular economy, which focuses on eliminating waste (wasted resources, wasted life cycles, wasted capabilities), and adding to resource production instead of only consuming resources. There are three fundamental principles to this approach:
- Eliminate waste and pollution from the original design
- Prioritizing durability, reuse, and recycling by keeping products and materials in use
- Regenerate natural systems to improve the environment
These three principles make up a feasible and powerful solution to both climate change and economic challenges. Investing in a system that uses environmental and societal improvements as essential measures of success and growth can play a key role in accelerating the implementation of sustainable solutions in businesses.
What Does This Mean for Businesses?
The circular economy is more than just recycling. While recycling should be encouraged, the focus on these outer loops often misses the more considerable opportunities. Companies who are serious about adopting this approach must first understand that they need to go further than doing “less bad” and work towards doing “more good.”
Unfortunately, proactively doing “more good” is not typically baked into a business model. But it’s time to throw away the rulebook and reimage how we deliver services and products. The environmental benefit of this approach is clear, but what about the economic benefits? Rubicon reports that widespread adoption of the circular economy results in increased Gross Domestic Product (GDP)—with a reported $4.5 trillion in economic benefits until 2030. Not convinced yet? Let’s take a look at some of the specific benefits for individual businesses:
Sounds too good to be true, right? Unfortunately, this approach is not all rainbows and butterflies. There are also some obvious disadvantages that cannot be ignored: Industries or businesses that produce cheap goods and high waste with built-in, planned obsolescence would be unable to transition to this approach.
The world is still focused on the profits and pleasures of today and failing to plan for tomorrow. A circular world may seem complex or difficult to achieve in a world of competing interests and would take time and a global effort to elicit effective results. But whatever the challenges, they are far simpler to deal with than the environmental catastrophe being delivered by our current economic model.
Our Earth is dying, and we must take action immediately. I look forward to continuing to learn and explore this concept and how it can be specifically applied to the technology and financial industries, and I encourage you to remain informed and educated as well! Together, we can create change.