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What is the circular economy?

Headlines and press releases tell us policymakers and business leaders are focused on accelerating the transition to a circular economy. But what exactly is it they are all speeding towards?

At its the heart the circular economy is about transforming how materials are used and produced to eliminate wastage. The United Nations Economic Commission for Europe (UNECE) points to its goal of ‘closing the loop between raw materials, products and wastes so that materials remain in use and consumption of finite resources is reduced’.

While countries and sectors would likely say something similar, the lack of an ‘internationally-agreed definition’ is slowing down progress in ‘designing informed strategies’, the UNECE said.

“Only with a clear understanding of what circularity means, and a comprehensive measurement framework that allows for comparisons between countries or over time, can progress be robustly monitored and accelerated,” the UNECE added. “The lack of consensus to date on what a circular economy actually is has held back the development of standardised indicators, meaning that existing statistical resources only provide part of the picture.”

To help build this consensus an international Task Force has been established. Led by Finland, the goto country for all things circular economy, it will have input from UN statistical offices working across 65 nations.

The UNECE said: “Over the next two years, the Task Force of seven countries led by Finland – in close collaboration with the UN Statistics Division, OECD, Eurostat and other international organisations – will clarify the scope for measuring the circular economy and will define key concepts, focusing on meeting the information needs of important regional and global policy frameworks such as the EU Green Deal, and on meeting the data challenges in such diverse areas as climate change and plastic waste. The Task Force will develop practical guidance for measurement and will strengthen coordination among international organisations.”


Challenge anyone to come up with word associations linked to the term circular economy and the name of the Ellen MacArthur Foundation will be a common response. Its raison d’être is to promote and advance the circular economy. And few can claim to have made the impact the Foundation has made in mainstreaming its ideas, and in taking forward initiatives that are designed to achieve circular economy ecosystems worldwide.

In the Foundation’s words a circular economy is ‘based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems’.

The efforts of the Task Force, along with the ongoing work of organisations like the Ellen MacArthur Foundation, mean an ‘internationally-agreed definition’ is in sight. And the Foundation is already leading the way in measuring circularity progress using Circulytics 2.0, which it labels the ‘most comprehensive circularity measurement tool’ available.

Explaining more about Circulytics, and the essence of a functioning circular economy, Jarkko Havas, who leads the Ellen MacArthur Foundation’s Insights & Analysis work around data and metrics, joined Marc Buckley recently on the Inside Ideas podcast.

Jarko talks to Marc about the inextricable links between climate change and the way ‘we use and produce materials’ and says it is critical companies are able to properly monitor how they are doing in making these materials in a more circular way.

“We want to ensure companies report in the future on their circular economy performance to show how they are acting to have these positive impacts,” he said.

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Written By

Susan is the co-founder of Innovators Magazine and a consultant for OnePoint5 Media. Susan is also a member of the UNFCCC-led Resilience Frontiers Nexus group and co-chair of the APOPO Foundation UK board.


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