The circular economy puts sustainability and closed loop thinking at the heart of business models and industrial organisation. It is a movement that requires business to think, plan and act in a systems approach, ensuring that the implications of the whole system are understood rather than solely the primary role that a business performs.
At the heart of this movement is the Ellen MacArthur Foundation who along with their consulting partners, McKinsey have produced numerous fascinating reports explaining the ways in which this closed loop thinking can be applied. For more information see https://www.ellenmacarthurfoundation.org/circular-economy/overview/concept.
Although the circular economy considers technical and biological cycles, the cycling of biological nutrients creates the potential to restore materials back into the biosphere via non-toxic loops. This allows the nature of agricultural production to be restorative rather than exploitative. A diagram showing this cycle is shown in Figure 1.
Figure 1: The Biological Nutrient cycle of the Circular Economy: Food and Beverage – retail, household and production material flows (Ellen MacArthur Foundation, 2013, p. 41)
Although the principles of the biological cycle are widely understood, in reality they are not well implemented. Food waste lost in the home and retail represents an estimated annual value to UK retailers of $970m USD (Ellen MacArthur Foundation, 2013). Despite numerous initiatives to reduce waste generated, the majority of this waste is sent to landfill rather than being cycled back to provide nutrients for restorative agriculture.
Such wasteful behaviour is unsustainable especially in light of the speech in 2009 by Professor Sir John Beddington (UK Government Chief Scientific Officer) which described an impending perfect storm – by 2030 the global population is expected to reach 8 billion, creating increased pressure on the earth’s resources in order to provide basic ecosystem services. He predicted a 50% increase in requirement for food, 50% increase in requirement for energy and 30% increase in requirement for fresh water (Beddington, 2009). As the UK only produces less than 60% of the food that it eats, the need to consider longer term food security becomes increasingly relevant.
However in order to make real change the Circular Economy needs to address the dominance of the different players within the biological cycle. Better understanding of the relative power of each stakeholder in the supply chain creates the opportunity exists to better engage the key players who may either drive change or may otherwise create obstacles that block progress and therefore limit the adoption of this new thinking.