Understanding Circular Economy

Thinking of the economy as circular instead of linear is key to implementing sustainability into your business practices. In a circular economy, we keep resources in use for as long as possible, getting the maximum value from them whilst in use, then recover and regenerate products and materials at the end of its life. Meanwhile in a traditional linear economy, the mindset centers around “make, use, dispose” when it comes to these resources.

“Sustainability is all about circular economy,” said Jeff Hohlfeldt of Northern Industrial Manufacturing. “So when we talk sustainability it’s all about looking at ways of taking waste streams and getting those as not only inputs into our business but taking our outputs and allow that to be another company’s input.”

The linear model promotes short-term consumption and is leading the economy and environment to an unsustainable situation. Unlike the traditional model, in a circular economy social and environmental aspects prevail, allowing us to create a more sustainable situation for our businesses, the planet, and the population. All of this ultimately relates to the Triple Bottom Line framework where we come at our businesses with the “People, Planet, Profit” mindset.

John Elkington, a famed British management consultant and sustainability guru, worked to measure sustainability in 1994 by creating this framework to measure performance in corporate America. This framework is what we refer to as the Triple Bottom Line. While profit can be measured in dollars, the people and planet options can prove to be difficult. This concept emphasizes consciousness and challenges those who use it to be aware of the decisions they’re making and how they affect the three p’s, which goes hand-in-hand with the idea of a circular economy.

Businesses that use this model and the others will find that reusing resources can be more cost effective than disposing of them each time and starting from nothing. When production prices reduce, so do the sale prices, which ultimately benefits the consumer in an economical, social, and environmental way.

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