Preparing for the coming circular economy

As we approach the deadline of 2030, decarbonisation efforts across the board will accelerate. As the reality of the imposed and envisaged targets dawns, every strategy and device available will be employed to achieve the necessary. 

The concept of the circular economy will fast move from being a notion to everyday practice. 

What is it? 

The circular economy is a model of production and consumption that emphases and facilitates the sharing, re-use, repurposing, re-engineering, and recycling of products and materials to eliminate waste and reduce the reliance on raw materials. 

The circular economy is seen as a key strategy in tackling climate change and allowing industry to remain productive and profitable, while meeting emissions and waste targets. It is cited in the European Green Deal as a central policy to begin moving away from linear consumption and disposal models that produce waste and rely on raw material extraction. 

However, the circular economy is poorly understood in business circles. There is a significant job of work to educate Irish businesses and organisations as to the benefits of this unfamiliar model.  A survey from Ibec in 2019 found that just half (51%) of Irish businesses understand what is meant by the circular economy, with only 39% aware of EU initiatives to drive sustainable change. 

The technology sector in particular is unprepared for what the circular economy will mean for equipment upgrade cycles, which have heretofore been based on financial principles around depreciation and operational capacity. 

The Ellen MacArthur Foundation has found in research that businesses are simply not prepared for the implications of the circular economy, from financial reporting and accounting to logistics and procurement. 

However, there are other areas that must also be considered in this shift. The adoption of circularity looks at a product over its entire lifetime, and the application of circular principles begins at design time. The vast majority (80%) of all product-related environmental impacts are determined during the design phase of a product, according to the European Science Hub.

There are already instances of businesses replacing older IT infrastructure before its predicted end of life because replacements are vastly more efficient and offer significant progress towards net zero goals, particularly among telcos and data centre operators. 

The circular economy emphasises keeping technical materials in circulation, reducing landfill in particular for the likes of metals and chemicals, where they can pollute and upset the ecological balance. This can mean replacing equipment earlier, to facilitate its re-engineering or repurposing, extending its lifetime value. However, when equipment can no longer be used in any productive way, its design time considerations for circularity mean it can be recycled more extensively, reducing reliance on raw materials and energy consumed in manufacture. 

Digital technologies will be a key enabler of circular economies, where they have the power to connect, aggregate, and facilitate analysis of data to support the complex and sophisticated coordination of the disparate resources involved. A key recommendation of the Circularity Gap Report 2020 is to foster global collaboration to collect and share data, which will “enable identification of key data needed to measure and track circular performance, plus provide the necessary infrastructure and alliances to collect, retrieve and share data,” says the report. As the race towards net zero becomes harder, every strategy will be valuable to achieve the necessary reductions. Maintaining the reductions and preventing them in the future will require a change in the way many industries and sectors operate. The circular economy is set to become a key enabler of that fundamental change, as adopted by the European Union, World Economic Forum and the United Nations

1. https://www.europarl.europa.eu/news/en/headlines/economy/20151201STO05603/circular-economy-definition-importance-and-benefits 
2. https://www.europarl.europa.eu/news/en/headlines/society/20200618STO81513/green-deal-key-to-a-climate-neutral-and-sustainable-eu
3. https://www.europarl.europa.eu/news/en/headlines/society/20200618STO81513/green-deal-key-to-a-climate-neutral-and-sustainable-eu
4. https://www.ibec.ie/connect-and-learn/media/2019/08/14/new-ibec-survey-shows-just-half-of-businesses-understand-the-circular-economy
5. https://ellenmacarthurfoundation.org/towards-the-circular-economy-vol-1-an-economic-and-business-rationale-for-an
6.  https://ec.europa.eu/jrc/en/research-topic/sustainable-product-policy
7.  https://www.hpe.com/ie/en/collaterals/collateral.a00117985.HPE-Circular-Economy-Report.html
8.  https://chasingcircular.com/learn/the-ultimate-guide-to-circular-economy/
9. https://www2.deloitte.com/content/dam/Deloitte/fi/Documents/risk/Circular%20goes%20digital.pdf
10.  https://euagenda.eu/publications/the-circularity-gap-report-2020
11.  https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en
12.  https://www.weforum.org/projects/circular-economy
13.  https://sdgs.un.org/partnerships