Understanding the Circular Economy

Understanding the Circular Economy image


We’re sure you will have heard the phrase reduce, reuse, recycle. This forms the basis of the circular economy. According to the European Parliament, the circular economy is “a model of production and consumption which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible”. This model's purpose is to increase the life cycle of materials so that waste can be reduced. By following this model, even once a product is no longer useful, we can use its component parts to make something new. For example, we are always encouraged to recycle our single use plastic. This allows the plastic to avoid landfill and be used for new plastic items instead. 

Traditionally, production is thought of in a linear manner. It’s thought that you harvest the materials needed, make the product, use it until it is no longer needed then dispose of it. However, with the circular economy, it’s possible to extend the life of the materials. You harvest the materials needed, make the product, use it until it is no longer serviceable then, instead of disposing of it, you harvest what you can from the product and reuse it for something new. In a perfect circular economy, materials are never wasted and are constantly reused. 

In order to make sure that products are suitable for the circular economy, it is important to make sure that we consider maintaining, reusing and refurbishing as much as we can. In the traditional linear model, you may find a lot of planned obsolescence. This occurs when a product is designed to only have a fixed lifespan so that consumers have to eventually replace it. It commonly occurs in technology with items such as phones and tablets. We are also encouraged to replace our technology when new models are released. However, by embracing the circular economy we can take simple actions such as waiting until our phones no longer work before replacing them. When it comes to fashion, we can consider buying good quality items and taking them to the relevant craftsperson when they need repaired rather than replacing them. With good care and maintenance from a cobbler or a tailor, shoes and clothing can last many years. 

So why is it important to embrace the circular economy? By embracing the circular economy, we can reduce our dependence on raw materials which will in turn help the environment. By reusing materials, we can give the environment a chance to replenish itself and limit biodiversity loss.  



It is important to take professional advice before making any decision relating to your personal finances. Information within this article does not provide individual tailored investment advice and is for guidance only. We cannot assume legal liability for any errors or omissions it might contain. Ethical Futures llp is authorised and regulated by the Financial Conduct Authority.


Share this Post:

Related Posts: