• Lev Mikulitski

Circular Economy: Mind shift towards a sustainable value chain.

Nowadays our development system is based on the so-called Linear Economy, which exploits natural resources (mostly fossils) to generate goods and services, closing its production process with the elimination of waste, destinated to accumulate more and more. On the other hand, Circular Economy aims to reduce most of the waste, converting it into an available resource which can be reused as a secondary raw material into the production process. Every product or output, from the moment it is manufactured to the moment of its actual use, is optimized until the end of its life cycle. In this way it is possible to recover and reuse all (or almost) the waste material as a starting point in another production chain. Circular Economy in fact aims to eliminate waste through a better structure and a more efficient design of materials, products, systems and even business models, adding value and quality to the production process.


Circular Economy can’t be only considered as an approach to environmental sustainability and as a form of respect for the ecosystem, the flora and the fauna, but also and above all as a method for exponentially increase the quality of life of individuals and the whole society, generating economic sustainability and therefore a more concrete and efficient monetary profit than the current one. Obtaining a high social sustainability through a more transparent and collaborative coexistence within the community. This is not a model that just supports the current linear economy, but that replaces it entirely at every stage of the production process, regenerating and positively modifying its structure.


Circular Economy represents an excellent solution to global waste, pollution and financial crisis. A fair investment in the circular waste management sector, from both companies and governments, could generate a profit, both in monetary and social terms. Favoring the practice of separate collection in fact, creates the possibility of classifying waste according to the different recycling properties, thus promoting their transformation into secondary raw materials. The latter in fact represent a new and cheaper source of supply for those companies that often cannot bear the price of raw materials whose purchase and disposal costs are undergoing an exponential increase in many cases.


Circular Economy is not limited to public authorities, associations, small and large companies, but is an approach that includes above all the citizens themselves, the whole society. In fact the "circle" of this model begins when everyday practices are implemented by the citizens. A trivial example is its separate collection: the better it will be performed inside domestic homes, the better it will be possible to start a circular production process without hitches and additional costs. The gestures of daily life significantly determine the environmental impact generated by each individual (in the USA a citizen produces about 25.9 tons of carbon dioxide in a year).


That’s why an improvement of daily sustainable activities by individual citizens can significantly increase civic education and awareness of environmental respect, just think of the approximately 11,500 tons of chewing gum per Nation thrown on the ground every year or of the consumption between 9 and 10 billion annual plastic bags.


Among the Circular Economy’s plans there is the so-called urban forestation, defined as the cultivation and management of trees in relation to their actual and potential contribution to the physiological, sociological and economic well-being of urban society. By nature, plants are able to absorb CO2 and purify the surrounding air from various polluting substances. They are tools that nature offers us to mitigate the microclimate and the impact of climate-changing emissions, which are excessively high in the city.


Chlorophyll photosynthesis allows plants to absorb carbon dioxide and introduce new oxygen into the air, the leaves of the plants absorb and degrade the polluting molecules (such as carbon monoxide and ozone) and act as a filter for fine dust. In addition, the preparation of green areas helps to combat the "heat island" effect, another problem typical of large urban centers that raises the temperature. Green is also a natural barrier to noise and guarantees a correct outflow of rainwater onto the ground. In addition, it helps in the climatic regulation of buildings, reducing the surrounding temperature in the summer months and protecting them from cold winds during the winter. Last, but certainly not least, all the perceivable benefits in terms of people's quality of life, with the creation of spaces for socializing, leisure, physical activity and relaxation.


All of these benefits could, or better must, represent an opportunity for all the different actors among the global economy.

First of all governments, which have the duty to preserve the economy, the society and the environment, can take lots of advantages by Circular Economy. This sector is able to generate new jobs while reducing the air pollution, thus improving citizens’ well-being. Companies are the most important actors in the market and this “sustainable opportunity” is able to let them be more resilient, finding tons of new economic opportunities to create new incomes. A striking example is the green marketing, which has been improving by a lot in the last two years and is becoming one of the biggest sectors to advertise companies and to rapidly increase the number of customers, who are always more and more “loyal” to brands who are following sustainable practices.


Now more than ever, CEOs are the driving elements in this occasion. They are the single individuals who can bring companies and societies through new sustainable opportunities, following the circular economy practices and advancing through the new available technologies, bringing businesses through new opportunities.


In conclusion, It’s important for CEOs to open the eyes on these new possibilities, that’s why the World Business Council for Sustainable Development (WBCSD) has published “CEO Guide to the Circular Economy“, which aims to provide CEOs and corporate executives with the tools they need to implement the principles of the circular economy. The Guide outlines five business models and three disruptive technologies that companies can explore and implement in order to seize the $ 4.5 trillion dollar opportunity that the circular economy represents. The circular Economy sector, is definitively the future of economy. We don’t have to shift towards a more sustainable economy, we must to.




#vc #impactinvesting #sdg #innovation #businesssuccess

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