Circular Economy
Definition
A circular economy is an economic model that aims to eliminate waste and the continual use of resources through designing for durability, reuse, remanufacturing, and recycling. It contrasts with the traditional linear model of take-make-dispose. The goal is to keep products, materials, and resources in use for as long as possible.
Why It Matters
The circular economy is a key strategy for decoupling economic growth from resource depletion and environmental degradation. Organisations adopting circular principles can reduce costs, mitigate supply chain risks, and meet growing regulatory requirements around waste.
Related Terms
Life Cycle Assessment
Life Cycle Assessment (LCA) is a systematic methodology for evaluating the environmental impacts of a product, process, or service throughout its entire life cycle. This includes raw material extraction, manufacturing, distribution, use, and end-of-life disposal or recycling. LCA helps identify the most significant environmental hotspots and improvement opportunities.
Ethical Supply Chain
An ethical supply chain is one in which all participants – from raw material suppliers to final distributors – operate in compliance with environmental, social, and governance standards. This includes fair labour practices, safe working conditions, environmental responsibility, and anti-corruption measures. Managing ethical supply chains requires ongoing due diligence, auditing, and supplier engagement.
EU Taxonomy
The EU Taxonomy is a classification system establishing a list of environmentally sustainable economic activities based on science-based technical screening criteria. It provides a common language for investors, companies, and policymakers to determine which activities can be considered genuinely sustainable. Activities must substantially contribute to at least one of six environmental objectives without significantly harming the others.