Circularity is decreasing, not increasing. Global circularity went down 2 percent since 2018 and is now at 7.2%. Over the last four years, all the talk and action about increasing circularity in material streams has not resulted in a decrease of the global use of virgin materials. This is the bleak fact that is at the heart of the Circularity Gap Report 2023. Since 2020 man-made mass has exceeded all global living biomass, and the current trajectory of material extraction in a linear economy continues to go in the wrong direction. Neatly, the 2023 Circularity Gap report summarizes that a circular economy can reverse this trajectory and reduce global material extraction and use by one-third.
We need to work hand in hand.
The solution’s message is clear: collaboration. Businesses and policymakers need to work hand in hand. For these collaborations, visions provide a shared focus to businesses and policymakers, and the Circularity Gap Report 2023 offers three principles: reduce, regenerate, and redistribute. When it comes to business and the ‘reduce’ principle, this is a mindset challenge for many business leaders. Because reducing overall material consumption means a reduction of overall stuff consumption – meaning less stuff to shift in the market. And this is where the key innovation challenge lies: how to conduct business in providing more value to customers without shifting stuff? To address this challenge, product and service innovation for sustainable circularity cannot be viewed in isolation. Rather, business model innovation is intrinsically linked to product and service innovations that reduce their material footprint by at least a third, as called for in the report. A shift in mindset by business leaders is required to think beyond the product-level business case: only then a shift in overall material consumption can be achieved. This multi-level shift is superbly captured in how the Circularity Gap Report 2023 calls the world’s highest-income countries that deliver high standards of living but consume most of the world’s materials and, as a result, overshoot almost all planetary boundaries. The report calls these countries Shift countries.
A shift from linear to circular
A shift needs to take place fast, and the disruption of mindsets, business models, and material supply and consumption systems is required to fulfill the circular economy potential of reducing global material extraction and use by one-third. This reduction goal is more ambitious than the original goal of Circle Economy, the creators of the Circularity Gap report series, of doubling global circularity by 2032. Really, what is called for in the Circularity Gap Report 2023 is a shift from a linear to a circular economy through circular disruption. Pockets of circular disruption are springing up in many places. A selection of businesses and policymakers working towards sustainable circularity in Shift countries can be found on pages 55/56 of the Circularity Gap Report 2023 or, for example, at the European Union-funded project Circular X. Still, how collaboration between business and policymakers can contribute to a systemic change for circularity has not been achieved at systems scale yet. I was part of a group of people who created a concept on how we can make such a systemic circular disruption happen and how we know it is happening. It is hugely encouraging that we were able to show how the fashion industry shows indications of being in the middle of a circular disruption. Because such positive examples are needed to meet the call for reducing global material use. Only with examples of pioneering initiatives will mainstream business leaders in Shift countries get excited about the material extraction and use challenges. So: happy reading of the examples in the Shift country examples in the Circularity Gap Report 2023, elsewhere – and hopefully gaining inspiration to create new pioneering collaborations!
Dr. Ilka Weissbrod