The circular economy – turning a constraint into a competitive advantage

Kristyna Gregorova

European student at Sciences Po university

According to figures published by the European Economic and Social Committee, global raw material extraction has more than tripled over the past 40 years. The world’s population is growing, consumption per capita is increasing and these two factors combined are depleting natural resources at exponential rates. Transitioning towards an alternative model is absolutely essential for environmental reasons. But it also makes sense from a purely economic perspective because raw material prices have been rising by about 6% a year since 2000.

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For businesses, embarking on this transition will take nothing short of a paradigm shift – towards reducing, collecting, reusing and recycling. Moving away from a linear economy and towards a circular one naturally requires substantial investment. But it also opens up many opportunities. For example, reusing or recycling raw materials, which can account for up to 50% of a company’s production costs. Using resources more efficiently doesn’t just shrink production costs and environmental footprints: it creates value chains that will help address climate change. Blending circular-economy principles into every process and department, in other words, inevitably spurs innovation and value creation for the company and its stakeholders.