Towards the circular economy: A commentary on corporate approaches and challenges

• DOI: http://doi.org/10.1002/pa.1680
• Published date: 01 November 2017
• Date: 01 November 2017

COMMENTARY

Towards the circular economy: A commentary on corporate

approaches and challenges

Peter Jones |Daphne Comfort

The Business School, University of

Gloucestershire, The Park, Cheltenham, UK,

GL50 2RH

Correspondence

Peter Jones, The Business School, University of

Gloucestershire, The Park, Cheltenham, UK

GL50 2RH.

Email: pjones@glos.ac.uk

Abstract

The concept of the circular economy is gaining momentum within the business world, and it is

seen as an important element in the transition to a more sustainable future. Circular econo-

mies are built around a range of activities that look to reduce the demand for raw material

inputs and natural resources and to recover, recycle, and reuse those inputs and resources

as an integral part of the production process. As such, the concept of the circular economy

restorative and regenerative and is contrasted, by its proponents, with the traditional “linear

economy”that turns raw materials into waste in the production process and that is seen to

lead to environmental pollution and the removal of natural capital from the environment. This

commentary paper outlines the characteristic features of the concept of the circular economy,

outlines how a number of companies are adopting circular economy approaches, and offers

some general reflections on the application of the concept.

1|INTRODUCTION

A growing number of organisations and companies claim to be

promoting the concept of the circular economy as an important

element in the transition to a more sustainable future. The European

Commission (2015), for example, argued that “the transition to a

more circular economy, where the value of products, materials and

resources is maintained in the economy for as long as possible, and

the generation of waste is minimised, is an essential contribution

to the European Union's efforts to develop a sustainable, low carbon,

resource efficient and competitive economy.”In launching A Circular

Economic Strategy for Scotland, Richard Lockhead, the then Cabinet

Secretary for Rural Affairs, Food and Environment, emphasised

that “the circular economy offers a new and exciting perspective”

that is “about the environment, the economy, and people”and that

“above all it is about the moral imperative to reduce our demand

on the planet's resources”(Natural Scotland 2016). From a commer-

cial perspective, Coca Cola (2017), the multinational beverage corpo-

ration, reported, “our long term vision is to leverage our significant

scale and resources to contribute meaningfully to the circular econ-

omy where materials are recycled and reused for as long as possible

to ensure maximum value is gained from them.”UPM‐Kymmene

(2017), one of the largest companies within the European forest,

paper, and packaging industry, claimed that “the circular economy

is seen as the way to secure a sustainable future and to enable

businesses and societies to succeed.”More generally, the World

Business Council for Sustainable Development (2017) claimed that

“by moving towards the circular economy, countries and companies

can capture increased growth; innovation and competitive advantage

while enjoying cost savings; reductions in energy use and CO2

emissions, as well as better supply chain and resource security.”

The corporate enthusiasm for a circular business model seems to

be clearly rooted in the belief that sustainable development will

increasingly become a mainstream priority for many markets. Under

the headline “Rising to the Challenge,”PricewaterhouseCoopers

(2017a) claimed, “the circular economy is here to stay”and the

company also argued that the circular economy “opens up opportuni-

ties for companies to build competitive advantage, create new profit

pools, develop resilience and provide solutions to some of the most

important issues facing business today”(PricewaterhouseCoopers

2017b). However, the transition towards a circular economy, and the

opportunities it may bring, presents a major challenge for businesses,

consumers, and governments. Accenture Strategy (2015), for example,

suggested “transitioning to the circular economy may be the biggest

revolution and opportunity for how we organize production and

consumption in our global economy”and that “at its essence, the

circular economy represents a new way of looking at the relationships

between markets, customers and natural resources.”In a similar vein,

Bjorn Delbeecke (2016), writing under the European Public Affairs

banner, described the transition to a circular economy as a “paradigm

shift”and that such a shift requires “not only the revaluation of

business models and industrial policies, but of established consumer

DOI: 10.1002/pa.1680

J Public Affairs. 2017;17:e1680.

https://doi.org/10.1002/pa.1680

Copyright © 2017 John Wiley & Sons, Ltd.wileyonlinelibrary.com/journal/pa 1of5