A Circular Economy is an economic system that is regenerative by design and aims at gradually decoupling growth from the consumption of finite resources. Circular systems employ activities such as reusing, sharing, and repairing to create a closed-loop system that minimizes the use of finite resources as well as the creation of waste and pollution.
As show in the model, a circular economy is built on three principles.
Together these principles aim to reduce costs that are a burden to both society and organisations, but at the same time increase economic growth that will lead to more jobs. A circular economy is therefore a more cost-efficient choice, but it does require for new innovative approaches that question the traditional consumption patterns.
Traditional consumption is a straight line and portrays how economies consume today.
Even if the move towards a circular economy has already begun through goals and initiatives have been set by governments and organisations, there are now opportunities allowing for quicker results.
The Covid-19 pandemic has resulted in people worldwide working remotely from home to decrease the spread of the virus. In turn there has been a decline in economic activity caused by the decrease in consumption. Consumption patterns have not only changed due to social distancing but also since employees are being put on furlough or being terminated in order for organisations to cut costs during this time when revenue streams are unreliable.
If we go back to the principles and aims of a circular economy, it encourages some the results of COVID-19. By reviewing the results, we can see how an action-plan starting now can change the outcome for the future.
Working from home has of course resulted in a change for most employees. The employee response towards this change differs. Some employees experience a better sense of work-life-balance and being able to use time more wisely, whilst other employees feel like there has been a change productivity and experience a loss of motivation. Even so, for all employees having to work from home it has meant a change to a complete digital working day, which is a key factor in how companies can become more cost-efficient and help towards eliminating waste and pollution. A plan moving forward that organisations need to start looking at is how working from home can be a solution to resolving efficiency challenges and how a more digital working approach is the answer to reducing travel related costs and as a result carbon emissions.
A decrease in consumption is a direct result of social distancing, citizens spending more time at home and an unreliable source of income. Of course, this decrease has a negative effect on the economy today, but it has led to organisations having to be more innovative in how to sell their offerings. From an environmental perspective the decrease in consumption over a longer period also encourages new consumer behaviour that is forecasted to last beyond the pandemic. Since a large amount of the population are having to reprioritize their consumption due to the lack of income security it allows for a change in consumer mindset. If the new mindset of consuming only what is necessary sticks it will, again, trigger a for new innovative solutions. For companies to stay ahead of the curve it is important to steer the company towards innovation and to set a strategy that is agile and can be adopted in an unsure future.
Steering societies and organisations into adopting a new way of managing is a crucial aspect in living through the pandemic. Taking this opportunity to truly adopting a circular economy can result in a more sustainable society in environmental, economic, and social terms.