We need to move from a system of waste to a system of reuse–an economy that’s a circle and not a line. Some businesses are getting closer to this ideal than others.
Since the Industrial Revolution, humanity’s use of natural resources has been basically the same: take, make, throw away. The World Bank’s predictions for global waste generation are chastening: on current trends it will double between now and 2025 to 6.5 million tons of solid waste every day. For sure, we are better at using virgin resources more efficiently while second-hand markets and recycling rates have both improved. But this hasn’t altered the fundamentals. Many companies’ business models are not set up to do much else than earn money from volume. The fact that few businesses are vertically integrated makes it more difficult for businesses to reform the model for “closed” product loops even if their CEOs want to.
When you add to this the OECD’s estimate of an extra two billion middle class consumers before 2030, commodity price volatility and new environmental regulations, you start to see the scale of the challenge. The good news, though, is that circular economy thinking–building an economy that doesn’t create waste–can make business-sense.