Navigant Research Blog

Setting a Circular Blueprint for Business through Science

— May 23, 2017

The circular economy is a simple idea, but not a small one. It’s key for achieving sustainable development goals (SDGs) and addressing climate change, as it has the potential to close the greenhouse gas (GHG) emissions gap by half.

More than 400 participants at the WBCSD Liaison Delegate Meeting in Montreux, Switzerland on March 27-30 focused on the topic, “Roadmaps for Impact in Today’s Reality.” The discussions around circular economy were lively, enthusiastic, and most importantly, ambitious. In partnership with the World Business Council for Sustainable Development (WBCSD), Ecofys is working on a detailed assessment and analysis that identifies the points in the economy where circular economy measures can reduce environmental impact substantially, taking the value chain into account. This report aims to set the direction for circular economy efforts by businesses, and the analysis is one of the key elements of the circular economy approach of the WBCSD.

Preeti Srivastav at WBCSD Liaison Delegates Meeting 2017

(Source: World Business Council for Sustainable Development)

For the circular economy, the dam has burst. Now is the time to start implementing.

Ecofys’ analysis highlights the scientific perspective on the circular economy and how businesses can navigate and position themselves on related efforts. The implementation of circular economy measures can help companies and even countries reduce their GHG emissions and improve economic growth.

GHG Emissions Reduction

Let’s look at the GHG emissions reduction potential. A study done by Ecofys and Circle Economy in 2016 highlights the GHG impact of the circular economy. The emissions reduction commitments made by 195 countries at the Climate Change Conference in Paris are a leap forward, but are not yet sufficient to stay on a 2°C trajectory, let alone a 1.5°C pathway. Current commitments address only half the gap between business as usual and the 1.5°C pathway. There is still a reduction of about 15 billion tonnes CO2e needed to reach the 1.5°C target. Analysis by Ecofys and Circle Economy estimates that circular economy strategies can reduce the gap between current commitments and business as usual by about half.

Economic Growth

Moving on to the economic growth potential, there are various credible analysis and studies by organizations like the Ellen MacArthur Foundation that highlight the economic potential of the circular economy in terms of GDP growth, job creation for countries and cost benefits, competitive advantage, and the security of supply, etc. for companies.

Implementation

In terms of the implementation of circular economy strategies, most companies are starting with end-of-life management, recycling initiatives, etc. These are great initiatives, but unless the end of life is managed in combination with upstream material flows, the impact will be limited.

Why? Because materials-related emissions account for more than half of total GHG emissions. Unless we focus on the upstream material flows, companies will end up spinning their wheels without actual impact.

Ecofys is currently leading a study that looks at eight key materials that are the most intensive in water, land use, and GHG emissions. The goal is to understand which companies and sectors can do the most. Food and shelter (cement, steel, forestry, agriculture, etc.) are the biggest material users, which means circular solutions in these fields bring huge opportunities and huge risks. There is a lot of potential for the food and shelter consumption categories to tap into the potential of circular economy, but we cannot take shortcuts, as both are basic human needs and we need to tread carefully.

Circular economy solutions are central. Let’s work together to do more with less.

 

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