What is a Circular Economy? A Definitive Guide

Struggling to wrap your head around the circular economy? Check out our guide to discover what a circular economy is, why it benefits the planet, and how it could wipe out waste once and for all.

Yes, you read that correctly. Once. And. For. All!

What is a circular economy?

According to the Oxford Dictionary, the definition of a circular economy is “an economic system based on the reuse and regeneration of materials or products, especially as a means of continuing production in a sustainable or environmentally friendly way.”

Now we know what you’re thinking: A regeneration to continue production? Sounds a lot like when they hire a new actor to play Doctor Who. And you’re not totally wrong. After all, return and reuse packaging was around in the 60s and has since enjoyed a modern-day reboot.

However, a less science-y, simple definition of the circular economy would be the reuse and repurposing of products and materials to exterminate waste, reduce emissions, and combat climate change.

What’s the aim of a circular economy?

The circular economy model aims to reduce our environmental impact and make full efficient use of resources. Changing the way we make, consume, and dispose of materials, the circular economy keeps products in (you guessed it) circulation(!) to avoid waste, increase sustainability, and reduce emissions.

The ultimate aim of a circular economy is to save materials, products, energy, resources, and ultimately the planet.

How does the circular economy work?

A circular economy works by keeping products and raw materials in an endless loop, ensuring they’re anything but wasted. In direct contrast to the take-make-waste economy we’ve grown accustomed to, this model of production and consumption preserves resources and keeps them in circulation via two different cycles:

1. The technical cycle: when products are reused, shared, repaired, recycled or remanufactured. A stellar example of this would be our lovely green milkround, which makes full use of returnable glass bottles, which we collect, sterilise and reuse from your doorstep.
2. The biological cycle: when biodegradable products are broken down into organic matter known as biomass. An example of this would be composting.

Many of our planet’s resources are finite but reusing, repairing and composting materials helps ensure future generations aren’t compromised and left without.

To help, here’s a diagram

The circular economy butterfly diagram showcases the beautiful, endless loop of this anti-waste system. If you think of the linear waste model as a flat, straight-lined, ugly caterpillar, this is the stunning creature waiting to burst out of the old cocoon and spread its wings.

If you’re on mobile, you may need to make full use of your pinching and zooming abilities – it’s a lot to pack in.

As the diagram suggests, the circular economy keeps a steady, healthy flow of resources in circulation.

We sit at the heart of the butterfly diagram, ensuring that our eco-friendly groceries and household products are delivered in sustainable packaging, and that this packaging is reused, recycled or composted.

Who defined the circular economy?

The concept of the circular economy existed long before the terminology. You could argue that the ancient Romans were the founding fathers of the circular economy, with “staging grounds for cycles of use and reuse” being found in the ruins of Pompeii. The same can be said of the Bronze Age, with a 3,000-year-old recycling centre recently discovered in Dubai. That’s right, they were making use of the circular economy before it was cool!

Thousands of years later, we’ve come back full circle and now look to the circular economy to help protect our planet.

Allan Kneese talked about the “circular economy” for the first time in his 1988 paper, The Economics of Natural Resources, which discussed the relationship between humans, the natural world, and our extraction and use of resources. Meanwhile, Swiss architect Walter R. Stahel defined the circular economy model in his 2016 journal as “a new relationship with our goods and materials [that will] save resources and energy and create local jobs”.

To build the infrastructure for this new looped model, you need to hang around in the right circles. And collaboration is key.

Our friends at the Ellen MacArthur Foundation sit at the forefront of the circular economy movement. The charity has led the way to an “economic system that delivers better outcomes for people and the environment” through a wealth of original research.

They support sustainable companies like ours by raising awareness and gathering evidence about the importance of fighting climate change and biodiversity loss. You’ll notice the good ol’ EMF sprinkled throughout this article!

The pillars and principles of a circular economy

The three core principles of a circular economy – also known as the main concepts and pillars of a circular economy – are 1) Eliminating waste and pollution, 2) Circular products and materials, and 3) Regenerating nature.

Eliminate waste and pollution

Sustainability is defined as “avoiding the depletion of natural resources”, preserving “ecological balance”, and the “ability to be maintained at a certain rate or level”. Waste goes against every one of those promises.

Whether it’s spilling into the ocean or sweeping our streets, waste is a design flaw that’s depleting our planet’s resources and putting a strain on ecosystems.

For years, products and packages have been designed to be disposable. But single-use is no use. Because these items ultimately end up in landfills and incinerators, leaching nasty chemicals into the earth and sea and pollutant greenhouse gas emissions into our atmosphere.

There’s a reason why animals don’t have wheelie bins. It’s because waste is an entirely human construct. But by changing the way things are designed (and disposed of), we can turn the linear take-make-waste economy into a circular economy that limits pollution and combats climate change. Closing the supply chain loop and turning off the tap of waste is the first principle of a circular economy.

Circular products and materials

Think circles are pointless? Think again. The circular economy’s second pillar focuses on the circulation of products to retain their value and refrain from waste. Think back to the two different cycles of the circular economy. Both the technical and the biological cycles keep finite resources in circulation and away from anywhere they can negatively impact the environment.

Cycles of maintenance, repair, refurbishment and reuse are “the most effective way of retaining the value of products”, according to the Ellen MacArthur Foundation. A reused iPhone, for instance, retains almost half of its original value. A recycled iPhone retains just 0.24% (Green Alliance).

The technical cycle is re-user-friendly because it allows materials to preserve their maximum possible worth and usage, staving off waste and keeping things in circulation. It’s much more environmentally friendly to stitch up a rip in your jeans or return and reuse a glass milk bottle than it is to chuck them on landfill, for instance.

Products and materials that can’t be circulated via reuse and maintenance still have a place in the circular economy, as long as they feed the planet, rather than landfill and incinerators. This is when home-compostable packaging really comes into its own, helping to cultivate crops, grow food, and source renewable materials.

The original value of products is lost in the recycling process. As is the original intended use. This makes recycling the last resort at the end of a product’s life. It’s no coincidence that we’re a milkround. We’re BIG fans of the circular economy model. Whether it’s our return and reuse glass-bottled milk, or our baked goods delivered in home-compostable paper, we circulate our sustainable packaging via both cycles.

Regenerate nature

The take-make-waste linear economy is a shady deal that extracts natural resources from the environment and thanks it with a big ol’ lump of pollution. The third pillar of the circular economy seeks to rectify this one-sided relationship, supporting ecosystems, biodiversity and natural processes.

Nature has been regenerating and rebuilding long before we came along. For millions of years, plants have dispersed their seeds to continue the spread of growth; leaves have fallen from trees and fed the trees above, and coral reefs have soared across sea beds to protect and feed coastal communities.

Rather than disrupting these natural processes and depleting and degrading the environment, the circular economy model looks to regenerate and rebuild nature, giving it the tools and space to continue doing what it does best.

Regenerating nature is not just about avoiding single-use, synthetic materials. It’s about nurturing the planet for a brighter, greener future for our natural world.

Wondering what else you can do to regenerate nature? Discover everything you need to know about rewilding before checking out our easy-peasy guide on designing a wildlife-friendly garden!

The R’s of the circular economy

A circular economy is built around common themes, all conveniently beginning with R. The number of R’s differs, depending on whom you speak to. It started as three (reduce, reuse, recycle) but, much like the Fast & Furious movies, this has evolved and escalated at a quicker pace than anyone can keep up with.

1. Rethink (e.g., reconsidering the way we make and consume products)
2. Reduce (e.g., cutting back our reliance on landfill sites and incinerators)
3. Reuse (e.g., making full use of a glass milk bottle rather than tossing out single-use plastic)
4. Repair (e.g., fixing your bicycle rather than binning it to buy a new one)
5. Reform (e.g., making changes to rules and regulations to improve sustainability)
6. Recycle (e.g., reprocessing and converting wasted packaging into new materials)
7. Repurpose (e.g., turning one of the hundreds of glass cheesecake pots in your cupboard into a candle holder)
8. Recover (e.g., taking a working engine out of a broken car and using it for another vehicle)
9. Renovate (e.g., upcycling an old door into a shelf)
10. Regenerate (e.g., turning food waste into biomass and using it to create energy)
11. Redesign (e.g., redesigning plastic straws and making them out of paper instead)

We reckon it’s only a matter of time before Reese Witherspoon, Rita Ora, and Rihanna gets added to this list.

What are the benefits of a circular economy?

The circular economy has many benefits, from tackling climate change, biodiversity loss and greenhouse gas emissions, right on through to improving financial growth, efficiency, health and well-being.

A circular economy makes us more resilient to global challenges, futureproofing our communities by preserving resources, boosting economies and protecting the planet. Quite the benefits package, right?

Here are ten advantages of the circular economy:

Reducing emissions

According to Wrap, 45% of greenhouse gas emissions can “only be tackled by changing the way we make and consume products and food.” The Circularity Gap Report predicts that doubling the circulation of resources could reduce global emissions by 39% by 2032.

A circular economy reduces emissions by:

• Cutting down the burning of fossil fuels in the manufacturing process
• Saving on the energy required to extract and process materials
• Reducing our reliance on landfills and incinerators, where huge piles of waste leak harmful gases into our atmosphere
• Wiping out food waste (the Ellen MacArthur Foundation claims regenerative farming can reduce emissions by 1.4 billion tonnes by 2050)

Plastic generates 3.4% of the world’s greenhouse gas emissions per year (1.8 billion tonnes). But our plastic free milkround swaps single-use packaging for returnable glass bottles that keep materials in the sustainable loop.

Preserving resources

Shifting to a circular economy could reduce primary material consumption by almost a third (Ellen MacArthur Foundation). This would cut down the need for mining, drilling and deforestation, with materials and products staying in circulation and away from landfills and incinerators.

Preserving products and materials protects our planet from excess emissions and the needless depletion of natural resources.

Saving money

A circular economy can save money in many ways, from the consumer level right up to the corporate world.

For instance, if the products you bought were designed to be longer-lasting and easier to repair, you wouldn’t need to spend as much on new items. A circular economy isn’t just limited to buying more durable products, though. It also involves saving money and resources by buying used and refurbished items, like shopping online for second-hand clothes.

And that’s not all. Avoiding plastic wrapper tax could save you almost £100 a year. Not to mention the extortionate expense of non-recyclable items, which cost the taxpayer up to £2 million a year!

The emergence of circular supply chains creates truckloads of opportunities for entrepreneurs to innovate and find new revenue streams. Reusing existing resources builds business resilience too, making it easier for companies to plan for the future, without having to accommodate and bend over backwards to fluctuating supply costs.

The linear economy isn’t just costly for the planet. Using a circular economy to cultivate crops and grow food could “generate benefits worth USD $2.7 trillion a year”, according to the Ellen MacArthur Foundation. It would also reduce the $13 billion a year spent on cleaning up ocean plastic pollution.

A circular economy can save money in many ways, from the consumer level right up to the corporate world.

Creating jobs

The circular economy could “unlock $4.5 trillion of economy growth” (Accenture) by creating more jobs and opportunities for innovation. Green Alliance looked at the UK’s employment data and discovered that over 450,000 jobs could be created by the circular economy as soon as 2035.

Protecting wildlife

Our broken linear system pushes waste into the natural world, whether it’s microplastics leaking into the soil, litter floating in the ocean, or greenhouse gas emissions choking our atmosphere.

The production and disposal of products harm wildlife, with ecosystems damaged, food sources depleted, and habitats destroyed by the constant need for manufacturing.

A circular economy for food, products and packaging promotes biodiversity and healthy ecosystems. Cutting out waste, purifying air and water, and creating a continuous supply of food and raw materials will limit the negative impact human activity has on wildlife.

Wiping out waste

Our bins are massively overworked right now, with waste finding its way from our kitchens and shops all the way down to the deepest, darkest depths of the ocean and beyond. But hope is far from lost.

A circular economy would reset our throwaway society, reducing the 9.52 million tonnes of food wasted per year in the UK, as well as the 400 million tonnes of plastic waste produced across the world.

Combating climate change

Reduced emissions. Cleaner air. Cleaner soil. Cleaner water. Cleaner energy. Healthier ecosystems. All of these factors combine to put a pretty big smile on our lovely planet’s face. But these aren’t the only consequences of a circular economy that combats climate change.

Trees play a vital role in removing particle pollution, improving air quality, and supplying food and shelter for wildlife. In the Woodland Trust’s words, “trees take carbon dioxide from the air, helping in the fight to limit further climate change.”

The constant need for new products causes deforestation all over the world, with linear supply chains tearing down trees to extract more materials. This would not happen on the circular economy’s watch. A sustainable loop would make sure things are a-round (pun intended) for a long time.

Better food

Balancing supply chains, supporting farmers, and reconnecting consumers with UK-sourced produce will increase food security, maximise freshness, and minimise waste.

Over a third of the world’s land is dedicated to food production. Yet the linear way this land is utilised puts unnecessary pressure on nutrient cycles and biodiversity.

A circular economy would reduce the number of pesticides in crop cultivation and microplastics in our food chains, too.

Supporting communities

Communities benefit when the economy is thriving alongside local, independent businesses. When the streets aren’t littered with plastic. When their air and waterways are clean, and food miles are low.

A circular economy supports local food producers and the planet, protecting them from the threats of mass industrialisation and waste.

Conserving our beautiful planet

A circular economy restores the balance between human consumption and our planet, protecting our world’s oceans, forests, soil and sky.

There is plenty of earth to go around, and we need to share and conserve our resources with all walks of life, rather than continuing to take, make and waste.

Linear vs. circular economies

The circular economy is a direct contrast to the linear waste system we’ve grown accustomed to.

The linear economy takes energy and resources from the environment, only to make something that’s used once and then immediately wasted. The circular economy is much more efficient and sustainable, as it requires that we make things to be consumed for a long time.

This increased longevity reduces the environmental impact of:

1. The extraction of raw materials
2. The manufacture of new products, and
3. The end-of-life linear waste system

The problems with our linear waste system

The way and frequency in which we produce and dispose of products in the linear economy come at the cost of the efficiency and health of our natural world.

Many of the resources we use to make and consume products are finite. This means, to avoid compromising future generations and our planet, we need to use them sustainably.

The disadvantages of our linear waste system are:

• It increases deforestation (due to the constant need for new materials and farmland)
• It depletes our natural resources
• It costs more to keep producing and disposing of products (especially given the volatility of price changes in supply chains)
• It massively increases waste

How is a circular economy sustainable?

A circular economy is sustainable because it retains ecological balance and ensures we have enough resources to thrive long into the future. This is a more environmentally friendly system of keeping communities, ecosystems and biodiversity healthy and protected, without compromising social and economic responsibility.

The sustainability credentials of a circular economy lie in its ability to reduce pollution and preserve natural resources. To paraphrase Elton John, this is the circle of sustainable life, and it moves us all closer to a brighter future.

What are the main problems with a circular economy?

The circular economy is a huge solution to a huge problem. But it’s not without its obstacles. The linear waste model has been in place for decades, and our world has been built around the take-make cycle. The main obstacle to keeping materials in the inner circle is that it requires a massive infrastructural change in some cases.

Redesigning and restructuring supply chains and waste systems requires collaboration on a mass scale. Nobody said it’d be easy, but the environmental benefits far outweigh the effort required. And if we can reboot a traditional 1960s milkround to work in the 21^st century, anything’s possible!

We have brought return and reuse glass bottles back to the mainstream (and your doorstep!), proving that a circular economy can deliver convenience with a conscience.

Circular economy: are we nearly there yet?

The circular economy is not like the flying cars and hoverbikes you see in futuristic sci-fi films. In some industries, it’s already here. And thanks to our eco-friendly milkround, it could be right on your doorstep!

Examples of the circular economy in action:

You may be adopting circular sustainability without even realising it. Here are already thriving out in the wild:

• The circular fashion economy, with an increasing number of people buying from sustainable clothing brands and using apps like Vinted and Depop
• Buying, repairing and remanufacturing used cars
Upcycling furniture
• Refillable washing up liquid, fabric conditioner, and hand soap
• Taking a reusable keep cup to your favourite coffee shops
• Deposit and return schemes for drinks in Europe (like Denmark’s Dansk Retursystem)
• Getting groceries in home-compostable packaging and drinks in return and reuse packaging

Companies adopting this model

Some companies have already joined Modern Milkman in closing the loop and adopting circular supply chains. These include IKEA, Patagonia, and Audi.

IKEA’s circular supply chain

IKEA are aiming to be circular and climate positive by 2030. The Swedish furniture company are using innovation to design products that can be reused, refurbished, remanufactured and recycled.

They’re also:

• Using more renewable and recycled materials
• Helping customers repair products they already own by offering spare assembly parts
• Making products easier to assemble and disassemble, so customers don’t damage them during house moves

This is a fantastic blueprint for companies looking to build a circular economy. And it’s much easier to follow than flatpack furniture instructions!

Patagonia’s circular supply chain

Patagonia are a B Corp (just like us!). And their mission is to create products that never end up in landfill (just like us!).

The circular fashion brand are big fans of the technical cycle, making clothes from recycled polyester fibres and actively encouraging customers to send their coats and jackets in for repair (rather than buying new ones).

It’s time to rally around the circular economy!

Many of life’s pleasures are round. Doughnuts; pizzas; halos; pies; bagels; cookies; onion rings; the one ring to rule them all; the wheel of fortune; Mike Wazowski; a pint of ice-cold beer from a bird’s eye view; heck, even our planet! So, long story short, our milkround’s in good company.

Want to help out waste, conserve natural resources, and protect our planet? Join our milkround to start your deliciously fresh doorstep deliveries!