Just as living beyond one’s economic means can be risky, living beyond the means of the planet threatens how safely it can function. The circular economy is an approach for living within the means of the planet while still providing for the global population. It does this by putting forward strategies that can be used to fulfill society’s needs with fewer materials and emissions.

The current dominant economy is linear in its processes: it takes resources, makes goods, and quickly wastes them. This is polluting, wasteful and causing greenhouse gas emissions to spiral upwards. Of the 100 billion tonnes of resources used by the global economy each year, only 8.6% are cycled back, reports the Circularity Gap Report 2022. Transforming the way we use and produce goods will allow us to mitigate some of the worst impacts of climate breakdown by limiting warming well below 1.5-degrees.

The circular economy is an alternative framework that puts forward a way of producing and consuming more sustainably. If managed well, it offers solutions to drastically reduce material-related emissions, as well as to address other systemic flaws such as biodiversity loss, pollution and social inequality.

The concept of circularity closely mimics nature, where there is no waste: all materials have value and are used to sustain life in a myriad of ways. If we effectively deploy these strategies, we will ultimately require fewer materials to provide for similar societal needs.

The circular economy is based on four key principles:

If we narrow flows—use less—the amount of materials used or greenhouse gases emitted in the making of a product or in delivering a service decreases. This can be achieved through circular design (material efficiency or lightweighting, for example), circular business models (sharing and rental models, for example) or using materials and products more often, thereby reducing the need for new ones (multifunctional buildings, for example). Of course, the ultimate way to narrow flows is to stop using unnecessary goods or services, such as excess travel or fast fashion clothing.

If we slow flows—use longer—resource use is optimised, as the length for which we can use a product expands. Durable design and materials, and service loops that extend product lifetimes such as repair, all contribute to slowing rates of extraction and use. Ultimately, we need to make the most of what we have, be it clothing, electronics or buildings, by applying strategies such as repair, refurbishing, renovation or remodelling.

If we regenerate flows—use cleaner resources—fossil fuels, pollutants and toxic materials are replaced with regenerative and natural sources. This helps us maintain natural ecosystems. The clean energy transition is, therefore, also a circular activity, as is regenerative agriculture. Using regenerative materials like wood over toxic or emissions-intensive plastic or cement also serves this goal.

If we cycle flows—use again—we make the most of materials and products at their end-of-life stage by creating a circular flow of resources. This is enhanced by improved collection and reprocessing of materials, as well as getting the most out of the material by creating value in each stage of reuse—for example upcycling rather than downcycling. To achieve this, products should be designed for recyclability (both technical and biological) and for disassembly, which facilitates both reuse and recycling.

At Circle Economy, we have created the Key Elements Framework, which demonstrates the full breadth of strategies that can be used to transition to a more circular world. These include, and build on, the key flows: narrow, slow, regenerate and cycle.

The linear 'take-make-waste' economy is characterised by high levels of extraction, consumption and waste. We are currently operating under a linear economy: of the 100 billion tonnes of materials that enter our global economy, only 8.6% are cycled—the vast majority are wasted, either locked into stock like buildings or infrastructure, dissipated into our air or water, or sent to landfill.

On the flipside, the circular economy seeks to design out waste and pollution, use materials and products for as long as possible and regenerate natural systems.

A circular economy can remedy many of the risks we face if we continue on a linear trajectory. These include resource shortages, warming global temperatures and challenges for businesses that will threaten long-term profitability, such as market volatility.

The Sustainable Development Goals (SDGs) direct global sustainable development with a holistic approach that covers the economy, environment and human well-being. True sustainable development requires a transformation of consumption and production processes by pivoting away from our current linear economy.

This is how the circular economy supports sustainability and sustainable development. It directly or indirectly supports a range of the 12 goals, from SDG 6, Clean water and sanitation, and SDG 12, Sustainable consumption and production to SDG 15, Life on land and SDG 7, Affordable and clean energy.

The number of circular economy examples around the world grows day by day. See some according to our Key Elements Framework.

You can also access the largest online library of circular economy case studies on the Knowledge Hub to search for—and upload—case studies of circular action on-the-ground.

Dive into our Impact Report 2021 to see how a range of businesses, cities and nations are becoming more circular by the day.

The circular economy emerged in mainstream policy discourse about ten years ago.

The parameters of the circular economy now feature in multiple governmental and multilateral policies and goals: from the EU Green Deal and the EU Circular Economy Action Plan, to the Sustainable Development Goals (SDGs).

The new EU-wide Circular Economy Action Plan (CEAP), launched in 2020, paves a promising road towards circular value chains and the mainstreaming of renewable, regenerative and cyclable resources.

With a focus on design, production and waste management, the plan provides a solid foundation for resource efficiency and the transition to regenerative resources, and as such, is an important catalyst for action.

Circle Economy published an article on the topic in 2020.