Circle Economy Foundationnews
Published on: 
February 9, 2024

Beyond the circular economy: Fostering socially and environmentally responsible businesses - New report

As business leaders strive for sustainability, systemic problems such as poor working conditions, unfair distribution of profits and wasteful consumption patterns will undermine Europe’s quest for a fair and truly circular economy.

An increasing number of businesses market themselves and their products as being sustainable and circular. Yet, whether new business models actually deliver resource savings and sufficiently consider other aspects such as social equity remains an open question.

A new report by Circle Economy, the European Environmental Bureau and the Fair-Trade Advocacy Office launches a debate on what constitutes truly sustainable business models. The report identifies blind spots in the European textile and electronics sectors, helping policymakers and business leaders understand how they can address the manifold challenges of the post COVID-19 economy.

Jean-Pierre Schweitzer, Policy Officer for the Circular Economy at the European Environmental Bureau (EEB), said:

There is no doubt we need more circular businesses like repairing, reusing and product as a service. Yet in a world where inequality is soaring, we cannot neglect other key aspects of sustainability like human rights and social justice. Policy makers and entrepreneurs urgently need to connect the dots on these topics to reduce the exploitation of natural resources as well as individuals and communities.

Sergi Corbalán, Executive Director of the Fair Trade Advocacy Office, said:

“Free trade approaches to the circular economy have many blind spots. Rather than turning a blind eye on them, let us work together to promote business models and supply chains that are both circular and fair”.

Natalia Papu, Research Analyst at Circle Economy, said:

"In their plans to build back better after the COVID-19 pandemic, governments and businesses need to address many challenges, ranging from growing inequalities to the climate breakdown. Once its blindspots are addressed, the circular economy offers an opportunity for decision makers to strengthen justice and fairness for all."

Recommendations include:

  • Ensure that circular business models replace existing linear ones, rather than just creating new forms of consumption, by using macro level resource targets and indicators to demonstrate performance
  • Prioritise wellbeing and fairness rather than growth as the primary objective in new and existing business offerings
  • Increase supply chain transparency on both environmental performance and supply chain ethics – e.g. through the introduction of product passports
  • Integrate due diligence into Europe’s circular economy agenda – including the Sustainable Products and Empowering the Consumer for the Green Transition initiatives
  • Guarantee design for repair and reuse – regulating obsolescence and strengthening the market for reuse and repair services.
  • Ensure equal access to circular products and services – using economic incentives and pricing mechanism to avoid circular products being labelled as luxuries
  • Enable circular and socially responsible procurement – public and corporate procurers should simultaneously pursue environmental and social impact criteria in purchasing contracts
  • Optimise reverse logistics and value retention processes – boost innovation in key areas such as repair and reuse as well as increasing support for existing actors in these sectors.

The report was launched at an online event hosted by FTAO and the EEB, as well as Young Enterprise Europe, The Club of Rome, and the European Circular Economy Stakeholder Platform. This event is part of the European Circular Economy Stakeholder Platform’s series of #CircularTalks.

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