The Circular Economy: The Start of an Economic Revolution or Just the Latest Business Buzzword?

A circular economy is one that is restorative by design, and which aims to keep products, components and materials at their highest utility and value, at all times. It sounds great on paper, but how does it work in reality, and who’s doing the work to get us there? Is it just the latest business buzzword, as Google Trends looks to indicate, or is this just the beginning of a new economic revolution?

Companies like General Motors and Nike would argue for the latter, and they’re leading a pilot project in the United States aimed at kicking material reuse into high gear, like a 2015 Chevrolet Corvette Stingray. The basic idea is to set up a cloud-based landing zone for companies to post details about their material flows so that they can identify collaborative reuse possibilities. The U.S. Business Council for Sustainable Development will use its 20-plus years of experience and online materials marketplace software to gather materials data, help identify possible synergies and share them with the participating companies.

Participants thus far include an array of global companies from textile, consumer products, metals, mining, logistics and chemicals industries. Each company has dozens of US operations and manufacturing sites that would be involved. The Corporate Eco Forum and World Business Council for Sustainable Development are co-collaborators in this scale-up project, scheduled to launch in May 2015.

GM and Nike are long-time leaders in designing cross-industry material reuse. Both have helped overhaul supply chains to convert traditional waste streams into products like car parts or clothing. Other companies involved are equally innovative, making this a first-ever circular US marketplace at the national level. This effort will require working with material collection companies and processors, and engaging with company designers to establish and expand cost-effective reuse markets.

One core goal is to keep the materials circulating here in the U.S. rather than going overseas or into landfills. Designers, asset managers and procurement teams will explore and identify ways of replacing virgin materials with reused streams in product offerings. GM has long been actively pursuing this approach and, in the process, has established new layers of economic growth and jobs based on creative material reuse.

Another goal is linking with the growing demand in the U.S. for more effective post-consumer recycling plans, which are being championed by consumer-facing companies like PepsiCo, Alcoa and Walmart. The average recycling rate across the country is below 20 percent. Finding ways to connect post-consumer and industrial material flows to achieve critical mass, infrastructure investment and new markets offers another breakthrough opportunity for the project.

This is a scalable circular economy initiative being led by U.S. companies. All of the participants want to establish an effective, safe and productive online marketplace that allows companies, city departments and other organizations to take our underutilized materials, partially used transportation systems, and off-gases for what they really are – valuable assets that have gone undiscovered. We look forward to reporting on this exciting initiative later this summer.


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Andrew Mangan is executive director of the U.S. Business Council for Sustainable Development.



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