Towards a circular economy by esharelife

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Towards a circular economy

London 15 September 2020

_________________________________________________________________________________ Esharelife Foundation, Charity no. 1183101 Baird House, 15-17 St. Cross Street, London, EC1N 8UW Tel: 0203 4093097 I Website: http://www.esharelife.org I Email: info@esharelife.org

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Contents What is a circular economy? ............................................................................................. 3 Why do we need a circular economy? ......................................................................... 6 Elements of circular economy ........................................................................................ 10 Cost and benefits of circular economy ...................................................................... 12 How can a business become circular? ....................................................................... 17 Financing the circular economy .................................................................................... 20 Conclusions ................................................................................................................................ 24

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What is a circular economy? The concept of circular economy is not new. Nowadays, there are more than 100 different definitions of circular economy, being heavily used in scientific literature and by a wide range of cross fields professionals. The reason that there are so many different definitions in use of circular economy lies behind its concept, which is applied by a diverse group of researchers and professionals according to their field of interest. For example, a scientist emphasizes an aspect of the circular economy which relates to a certain field of science, whereas a financial analyst tries to focus on the financial models. The diversity of definitions also makes it more difficult to make circularity of a given economy measurable. Definitions often focus on the use of raw materials or on system change. Definitions that focus on resource use often follow the 3-R approach: • • •

Reduce – lean production, minimum use of raw materials Reuse – prolonged use, maximum reuse of products and its components Recycle – recover &regenerate materials, increase the use of highly recycled materials, high quality reuse of raw materials.

Definitions that focus on system change often emphasize the three elements below: • • •

Closed cycles Renewable energy Systems thinking1

Jouni Korhonen et al, Circular economy as an essentially contested concept, Journal of Cleaner Production, Volume 175, 20 February 2018, Pages 544-552, available at https://doi.org/10.1016/j.jclepro.2017.12.111

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Circular economy is at the core of the work of Ellen MacArthur Foundation, which describe it as an alternative to a traditional linear economy (make, use, dispose) in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life. A circular economy is one that is restorative by its design2.

The UK Government describes a circular economy as moving away from our current linear economy towards one where our products, and the materials they contain, are valued differently; creating a more robust economy in the process3. The European Union emphasises the need for resources to be managed more efficiently throughout their life cycle. The circular economy is a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible. In this way, the life cycle of products is extended. In practice, it implies reducing waste to a minimum. When a product reaches the end of its life, its materials are kept within the economy wherever possible.

https://www.ellenmacarthurfoundation.org/circular-economy/what-is-the-circular-economy https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/265022/ pb14091-waste-prevention-20131211.pdf 3

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These can be productively used again and again, thereby creating further value4. While the definitions of circular economy differ, the common denominator is that in contrary to the linear economy, which operates on a â&#x20AC;&#x2DC;take-make-disposeâ&#x20AC;&#x2122; model, a circular one is focused on the optimal use and reuse of resources in the various links along production chains, from the extraction of raw resources all the way to consumption5.

https://www.europarl.europa.eu/news/en/headlines/economy/20151201STO05603/circular-economydefinition-importance-and-benefits 5 https://themasites.pbl.nl/o/circular-economy/ _________________________________________________________________________________ Esharelife Foundation, Charity no. 1183101 Baird House, 15-17 St. Cross Street, London, EC1N 8UW Tel: 0203 4093097 I Website: http://www.esharelife.org I Email: info@esharelife.org

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Why do we need a circular economy? Our traditional economy, which is based and favouring the linear model of production and consumption, is not coping with the pressure of several powerful disruptive events. The interest on circular economy is quite old, but the debate over its need has reignited recently due to the Covid-19 pandemic, which has caused the biggest and broadest disruption in the supply chains all over the world. The actual pandemic represents the biggest shock in our collective memory. However, it is only the latest in a series of events with disruptive effect in global economy and society. The world has witnessed several earthquakes, tsunamis, hurricanes, flooding, wild fires, etc, creating shortages of products for a range of industries. Climate change related events are increasing their frequency and magnitude of shocks into the society. Forty weather disasters in 2019 caused damages exceeding $1 billion each—and in recent years, the economic toll caused by the most extreme events has been escalating6. One obvious reason that a more circular economy is needed is because current rates of resource consumption are not sustainable. In a fastdeveloping world, increasing levels of consumption have put significant pressure on resources. This generation is consuming the resources of unborn generations. At current growth of global population, the UN projects that the global population increases from a population of 7.7 billion in 2019 to 11.2 billion by the end of the century. However, the UN predicts that Two centuries of 6

Eye of the Storm, “Earth’s 40 billion-dollar weather disasters of 2019,” Scientific American blog entry by Jeff Masters, January 22, 2020; and Matteo Coronese et al., “Evidence for sharp increase in the economic damages of extreme natural disasters,” Proceedings of the National Academy of Sciences, October 2019, Volume 116, Number 43.

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rapid global population growth will come to an end. The charter below shows that by 2100 the annual growth rate of the world population will be just 0.1%, with its peak 2.1% in 1960 7.

McKinsey Global Institute estimates that, by 2030, 3 billion people who are currently living in poverty will join the middle-class level of consumption. If you take into account that, all in all, that would mean that we would need something like three times more resources than we use today in 2050â&#x20AC;&#x201D; 70% more of food, feed and fibre in 2050â&#x20AC;&#x201D;we would likely be around 40% short of drinking water in 2030. If we take into account that already today, we are using approximately 60% of our ecosystems in pretty much

https://ourworldindata.org/future-population-growth#global-population-growth

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unsustainable ways that makes a pretty simple conclusion: how we produce, consume and live will have to be changed8. Due to the global risks, the supply chains are becoming more and more fragile and resources are at risk of becoming scarce due to a growing global population and rising prosperity levels. This tells us the importance of using the available resources more efficiently. Aspects of the circular economy, such as recycling of household waste, ewaste and waste water, provide a ‘toolbox’ to comply with the SDGs. In particular, there is a strong relationship with the following SDGs: • • • • •

SDG SDG SDG SDG SDG

6 - clean water 7 - affordable and clean energy 8 - work and economic growth 12 - responsible consumption and production 15 - life on land9.

The transition towards a circular economy offers economic opportunities for all the countries in the world, it can make countries less dependent on imported, scarce raw materials and other resources, and it will contribute to a cleaner environment. The current Covid-19 pandemic has raised awareness on the urgency of reforming our economy to achieve a global recovery. This endeavour will require the implementation of a variety of strategies aiming for a system reset with a visible consensus on the potential of a circular model. Some leading businesses have embraced the circular economic model and have invested in transforming their businesses to a more circular ones, while research institutions and governments are cooperating to identify the best practices and introduce new legislation to enable the transition toward a circular economy. The European Union and in China are in the lead, while 8

MGI report “Urban World: Cities and the rise of the consuming class”, available at https://www.mckinsey.com/~/media/McKinsey/Featured%20Insights/Urbanization/Urban%20world%20Cities %20and%20the%20rise%20of%20the%20consuming%20class/MGI_Urban_world_Rise_of_the_consuming_cla ss_Full_report.pdf 9 https://www.un.org/sustainabledevelopment/sustainable-development-goals/ _________________________________________________________________________________ Esharelife Foundation, Charity no. 1183101 Baird House, 15-17 St. Cross Street, London, EC1N 8UW Tel: 0203 4093097 I Website: http://www.esharelife.org I Email: info@esharelife.org

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many other countries and regions as well, are accelerating their efforts at national and municipal levels with the same ambition. In the UK, WARP (Waste and Resources Action Programme)10 has reported that by 2010 the UK economy has been 22% circular comparing to the 2000 and between 2000 and 2010, there was: • • • • •

30Mt 30Mt 70Mt 70Mt 55Mt

less direct material input going into the economy less being consumed by the economy less waste generated more materials recycling and going back into the economy less going to landfill and Energy from Waste

The same source indicates that: Between the years 2000 and 2010 UK GDP expanded by 20% and the population grew by 6%. This increase in the size of the economy occurred despite the recession triggered by the financial crisis towards the end of the decade. By contrast direct material inputs to the UK economy, our consumption of materials and waste generated declined between 2000 and 2010 suggesting that there is no longer a strong link between GDP and materials use and waste. The quantity of material being recycled has more than doubled in the decade. The recycling sector has grown strongly - there has been a 3-fold increase in sales turnover since 1998 and over this period the sector’s growth has outstripped growth in the overall economy. Today the recycling sector generates more than £10 billion in sales, employs over 30,000 people, and contributes around £3 billion in gross value added to the UK economy.

https://www.wrap.org.uk/about-us/about/material-flows-uk

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Elements of circular economy First and foremost, experts cannot stress enough that a circular economy is more than recycling. It is about using less material in the first place. While circular economy is well intended, it still focuses far too much on recycling. It is like recycling on steroids. We really should be thinking about turning off the tap11.

In a circular economy, material cycles are closed following the example of an ecosystem. There is no such thing as waste, because every residual stream can be used to make a new product. Toxic substances are eliminated and residual flows are separated into a biological and a technical cycle.

Producers take back their products after use and repair them for a new useful life. In this system, it is therefore not only important that materials are recycled properly, but also that products, components and raw materials remain of high quality in these cycles.

Jim Puckett, Oral evidence: Electronic Waste and the Circular Economy, HC 220, available at https://committees.parliament.uk/oralevidence/586/html/

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Just like raw materials and products, energy also lasts as long as possible in a circular economy. The circular economic system is fed by renewable energy sources. Ellen MacArthur Foundation emphasize that it is not possible to recycle energy, so there is no mention of energy cycles or energy cycles, but of cascade type energy flows. An example of this is the co-production of heat and power12. According to Ellen MacArthur Foundation, the circular economy does not only require closed material cycles and renewable energy, but also systems thinking. Every actor in the economy (company, person, organism) is connected to other actors. Together, this forms a network in which the actions of one player influence other players. To take this into account, the short- and long-term consequences must be taken into account in choices, as well as the impact of the entire value chain.

Towards a circular economy: Business rationale for an accelerated transition, available at https://www.ellenmacarthurfoundation.org/assets/downloads/TCE_Ellen-MacArthur-Foundation_9-Dec2015.pdf _________________________________________________________________________________ Esharelife Foundation, Charity no. 1183101 Baird House, 15-17 St. Cross Street, London, EC1N 8UW Tel: 0203 4093097 I Website: http://www.esharelife.org I Email: info@esharelife.org

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Cost and benefits of circular economy The transition from a linear economy to a circular one requires facilitating policies, significant investments and system changes. Making this transition will require action from everyone in the supply chain, from those extracting raw materials to the designers, manufacturers, distributors, retailers, consumers, as well as those managing the collection and processing of waste. Critical to delivering this will be a change in mindset and corresponding change in behaviour – each actor has an important role to play13. It might be difficult to achieve it, since the changes associated with it are of great risks of failures in managing the complexities involved. Nevertheless, the circular economy has the potential of offering considerable economic benefits, that’s why so many countries are eager to embark on the journey towards making their economies more circular and have started to roll out their national circular strategies. Recognising the complexities involved the UK government speaks about moving towards a more circular economy, rather than achieving or delivering it, while expects that businesses need to drive change14. Governments have the ability to strengthen business efforts and upscale small niche activities, including incentives to encourage all companies to apply circular business models. They can and are expected to: • introduce or tighten laws & regulations; • take financial measures (like offering subsidies and taking fiscal measures);

Prevention is better than cure: The role of waste prevention in moving to a more resource efficient economy, available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/265022/ pb14091-waste-prevention-20131211.pdf 14 Growing a circular economy: Ending the throwaway society, written evidence by government, available at https://publications.parliament.uk/pa/cm201415/cmselect/cmenvaud/214/21411.htm _________________________________________________________________________________ Esharelife Foundation, Charity no. 1183101 Baird House, 15-17 St. Cross Street, London, EC1N 8UW Tel: 0203 4093097 I Website: http://www.esharelife.org I Email: info@esharelife.org

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• utilise procurement power; • develop symbiotic partnerships, etc. The governments all over the world have realised the great potential of circular economy in strengthening their economies by: • • •

saving on valuable resources boosting innovation creating opportunities for millions of new jobs.

Four key ways of realising these benefits are: •

lean production (i.e. requirement);

making

goods

with

lower

material

•

reducing waste in manufacture and commerce;

•

reducing the number of working products thrown away, and;

•

goods to services (i.e. increasing the proportion of some products which are leased).

Businesses will benefit from transitioning in this direction as the current linear economic model has put a high pressure on natural resources and unsustainable consumption patterns have put under question mark the availability of vital natural resources in the foreseen future. Transitioning to a more circular economy will help business models to reduce dependencies on fossil fuels and finite natural resources. They would benefit significantly by shifting their operations in line with the principles of the circular economy. These benefits include the creation of new profit opportunities, reduced costs due to lower virgin-material requirements, and stronger relationships with customers. Some good expected outcomes include, but are not limited to:

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• • •

Lower cost in production and new profit scheme, instead of selling the product, leasing them. Reduced volatility and greater security of supply chains Improved customer loyalty and interaction

Mobility can serve as a good example here on applying the 3R concepts of circular economy. In Netherlands, companies such as MyWheels and WeGo, allows their clients to share the cars. The new business model of sharing cars, is purely based on the concepts of circular economy and it means: •

Fewer people have to buy their own cars. This reduces the demand for new cars production and ultimately use of raw materials (reduce).

•

If a car is broken, it can be repaired or the chassis and interior of the car can be used to make or refurbish another car (reuse).

•

When the car or its parts can no longer be reused, the metal, textile and plastic of the parts can be melted down so that a new car can be made of them (recycling) 15.

Even before business as usual was challenged by Covid-19 pandemic, private vehicles in Europe were sat idle 92% of the time and it’s therefore obvious to think that designing cities for alternative urban transport solutions and better use of urban public space will become key priorities in post Covid-19 economic recovery16. Rolls Royce, a market-leader in high performance power systems invested £1.3 billion on research and development. In May 2017 this company signed a landmark agreement with Nor Lines, which handed responsibility for service planning and performance back to the equipment’s supplier, Rolls-Royce. Nor Lines pays a fixed charge per hour of operation, per ship. 15

https://kenniskaarten.hetgroenebrein.nl/en/knowledge-map-circular-economy/what-is-the-definition-acircular-economy/ 16 Growth within: A circular economy Vision for a competitive Europe, available at https://www.ellenmacarthurfoundation.org/assets/downloads/publications/EllenMacArthurFoundation_Grow th-Within_July15.pdf _________________________________________________________________________________ Esharelife Foundation, Charity no. 1183101 Baird House, 15-17 St. Cross Street, London, EC1N 8UW Tel: 0203 4093097 I Website: http://www.esharelife.org I Email: info@esharelife.org

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Rolls-Royce will monitor the equipment aboard each vessel from on shore through the use of onboard sensors. This allowed Rolls Royce to switch to a service-based model, offering 'power by the hour' which covers "full inuse monitoring, servicing, repair, remanufacture and replacement" of its engines17. In the UK, a 'take-back' model for TVs and clothing, where products are returned for recycling or re-use, could increase UK GDP by over £1.75 billion by 2020. WRAP is working on a 'REBus' project "to demonstrate profitable, resource-efficient and resilient alternative business models" in the electrical products, textiles, furniture and construction products sectors18. DEFRA calculates that UK businesses could benefit by up to £23 billion per year through low cost or no cost improvements in the efficient use of resources, whilst McKinsey institute estimates that the global value of resource efficiency could eventually reach $3.7 trillion per year19. The Chartered Institution of Wastes Management (CIWM) drew on analysis from the EU that estimated that full implementation of the 8 existing EU main waste-related directives could save €72 billion a year (€9 billion in UK). The value of the 'waste industry' in Europe could increase by €42 billion (€5 billion in UK), with 400,000 new jobs (50,000 in UK). EEF, the manufacturer's association, highlighted research by the Next Manufacturing Revolution, which suggests that in just three UK manufacturing sub-sectors re-manufacturing has the potential to create £5.6bn to £8bn a year and support over 310,000 jobs20. There is a lot of employment potential in the industries that deliver for nature and climate. To give you a sense of the scale, low-carbon electricity and heating, energy efficiency in buildings and electric vehicles could 17

https://www.rolls-royce.com/media/press-releases/2017/24-05-2017-nor-lines-and-rr-sign-landmarkpower-by-the-hour-service-agreement.aspx 18 Growing a circular economy: Ending the throwaway society, written evidence by WRAP, available at https://publications.parliament.uk/pa/cm201415/cmselect/cmenvaud/214/21411.htm 19 WRAP's vision for the UK circular economy to 2020, available at https://www.wrap.org.uk/content/wraps-vision-ukcircular-economy-2020 20 Growing a circular economy: Ending the throwaway society, available at https://publications.parliament.uk/pa/cm201415/cmselect/cmenvaud/214/21404.htm _________________________________________________________________________________ Esharelife Foundation, Charity no. 1183101 Baird House, 15-17 St. Cross Street, London, EC1N 8UW Tel: 0203 4093097 I Website: http://www.esharelife.org I Email: info@esharelife.org

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support nearly 700,000 jobs across England by 2030. Promoting a circular economy could also support over 100,000 net new jobs by 203021. The circular economy will not only benefit businesses, the environment, and the economy at large, but also the individuals. It is expected that those benefits will have a wide range, starting from increased disposable income, to improved living conditions and associated health impacts.

Greening the post-Covid Recovery, Oral evidence by Caterina Brandmayr, Senior Policy Analyst at Green Alliance, available at https://committees.parliament.uk/oralevidence/764/html/

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How can a business become circular? A growing number of businesses across the world have realised the costs and benefits associated with transitioning to a more circular model of economy. More and more businesses are planning or implementing the required changes. While the methodology to achieving the circular economy need to be locally customised, AdvanceLondon, an advisory support to small and medium businesses in London, recommends the following steps:

1-Circular Design Start by designing products that last for as long as possible, can be easily repaired, upgraded or remanufactured and, when theyâ&#x20AC;&#x2122;re finally worn-out, are easy to dismantle so materials can be recovered and used again.

2- Resource Efficiency Always aim to use the least amount of energy, water, space and materials as possible, and make the best use of available resources.

3- Clean resources Make sure all the inputs needed to create your products or services are from renewable and non-toxic sources. That might mean sourcing renewable energy, using zero-emissions transport or choosing materials

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that are biodegradable and locally grown so they have a net-positive environmental impact.

4- Resource recovery Capture resources that are no longer needed and use them to make new and better products, over and over again.

5- Circular revenue model Unlock ways to generate revenue by keeping resources in use for as long as possible and at their highest value. This means leasing, renting and sharing, anything from products and materials to equipment and space22. It is of great significance that the above guide starts with circular design. This highlights an important fact and the main concern of environmental experts that true circularity is not just about recycling more material. It is about using less material in the first place, so thatâ&#x20AC;&#x2122;s why a better design should be the first priority task. The Great Recovery project, funded by the Technology Strategy Board and run by the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA), has led research into the role of design in the transition to a circular economy. They calculated that over 80% of the environmental impact of a product is determined at its design stage, making it a crucial leverage point in shifting towards more circular systems and identified four 'design models' for circularity: a) Design for longevity; b) Design for leasing /service; c) Design for re-use in manufacture; and

https://advancelondon.org/our-circular-vision/

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d) Design for material recovery23. Another warning coming from experts here. Designing is not just about making things, but understanding materials and building links between organisations. In this critical process, RSA highlights the need for more system designers, system thinkers24. A business journey towards a circular economy starts with designing their model of business in conformity with the circular economy concepts and ends with creation of new revenue models. The latter also play an important role in the transition towards a circular economy. According to the circular economy revenue models, consumers and companies would be required to pay for the use of a product or machine more often. If products would remain the property of their producers, this would provide the producers with an incentive to ensure a longer product lifespan, or to reuse the raw materials more efficiently. In addition, producers would also remain responsible for repair and maintenance. The producers will have the full ownership over their products, their components or parts, including their final disposal when longer reuse will not be possibile, so creating a stronger and durable relationship and loyalty between producers and their clients.

Growing a circular economy: Ending the throwaway society, available at https://publications.parliament.uk/pa/cm201415/cmselect/cmenvaud/214/21404.htm 24 Ibid _________________________________________________________________________________ Esharelife Foundation, Charity no. 1183101 Baird House, 15-17 St. Cross Street, London, EC1N 8UW Tel: 0203 4093097 I Website: http://www.esharelife.org I Email: info@esharelife.org

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Financing the circular economy During the period 2016-2020, aiming to promote innovation, send a signal to the market, and support the industrial sector’s transition to a circular economy, the EU has allocated 10 billion euros of public funding25. Circular economy innovation funding came from several EU programmes, including: • • • • •

Horizon 2020 Cohesion Policy, European Fund for Strategic Investments, Innovfin, and LIFE.

For instance, 1.8 billion euros of Cohesion Policy funding was provided to SMEs for the uptake of eco-innovative technologies, and at least 100 million euros went to more than 80 circular economy projects through LIFE funding26. In the UK, government has supported a number of initiatives, including setting up the business-led Circular Economy Task Force, and working through WRAP to establish voluntary initiatives in different sectors, such as the Sustainable Clothing Action Plan (SCAP) and Sustainable Electricals Action Plan (SEAP). It also supports the Product Sustainability Forum, which brings together retailers and suppliers, NGOs, academics and Government representatives, with a focus on grocery products. It is also support funding research on new business models. The Technology Strategy Board is doing a great job to support circular economy innovation. It has supported around 60 projects, investing over £13 million, including developing recycled

https://www.switchtogreen.eu/ LIFE and the Circular Economy, available at https://www.ecsite.eu/sites/default/files/life_and_circular_economy_0.pdf 26

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aluminium alloys for Jaguar Land Rover car bodies and redesigning a Morphy Richards steam iron for longer life and lower energy use.27 The UK Government is playing a significant role in supporting UK businesses, including supporting access to international markets through UK Trade and Investment (UKTI). Also, it has made some funding available to the businesses wanting to shift towards a circular economy. A selected list of available funding to apply is below: Innovate UK Smart Grants: August 2020 Opportunity for UK registered organisations to apply for a share of up to £25 million from Innovate UK to deliver disruptive R&D innovations that can significantly impact the UK economy. To lead a project your organisation must: • • • •

be a UK registered business of any size or a research and technology organisation (RTO) be, or collaborate with, at least one micro, small or mediumsized enterprise (SME) carry out your research and development (R&D) project activity in the UK intend to commercially exploit the project results from the UK

Opens: 28 August 2020 Closes: 25 November 2020

ISCF Transforming foundation industries: Building a resilient recovery

Growing a circular economy: Ending the throwaway society - Environmental Audit Committee, available at https://publications.parliament.uk/pa/cm201415/cmselect/cmenvaud/214/21404.htm

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UK registered businesses can apply for a share of £8 million in grant funding for projects supporting recovery and growth of the UK’s foundation industries. This competition is open to both single applicants and cross-sector collaborations. To lead a project your UK registered organisation must: • • •

be a business of any size or a research and technology organisation (RTO) carry out its project work in the UK intend to exploit the results from or in the UK

Opened:3 August 2020 Closes: 4 November 2020

IETF industrial energy efficiency and decarbonisation studies Organisations can apply for a share of up to £30 million for grants to carry out feasibility and engineering studies into energy efficiency and decarbonisation. This competition is open to single applicants and collaborations. To lead a project or work alone you must: • •

be a business of any size registered in England, Wales or Northern Ireland operate at the manufacturing site (SIC codes 10 to 33) or data centre (SIC code 63110) in England, Wales or Northern Ireland for which the study is carried out

Opened: 20 July 2020

Closes: 28 October 2020

IETF deployment of energy efficiency technologies in industry

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Organisations can apply for a share of up to £30 million for grants for energy efficiency projects that reduce fuel bills and carbon emissions. This competition is open to single applicants and collaborations. To lead a project or work alone you must: • •

be a business of any size registered in England, Wales or Northern Ireland operate at the manufacturing site (SIC codes 10-33) or data centre (SIC code 63110) in England, Wales or Northern Ireland where the project is located

Opened: 20 July 2020 Closes: 28 October 2020

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Conclusions The circular economy has its advantages over the linear economy and promotes more sustainable production and consumption systems. The transition towards a circular economy offers economic opportunities for all the countries in the world, it can make countries less dependent on imported, scarce raw materials and other resources, and it will contribute to a cleaner environment. It helps to improve resilience through stock availability and competitiveness while contributing to achieving the 17 UN Sustainable Development Goals (SDGs). The current Covid-19 pandemic has raised awareness on the urgency of reforming our economy to achieve a global recovery. The recent global supply-chain shocks have not only exposed the operational vulnerabilities, but they also have unleashed the great potential of circular economy and its transformative opportunities. The combination of all the above is finally building momentum towards making the circular economy a tangible reality. As the world has grown more interconnected, businesses and governments all over the world must join their efforts to build more robust and resilient supply chains. This complex task would require from all the stakeholders to make long-term commitments towards designing new and improving the existing production technologies, increasing human resources capacities and work skills, investing in research and development and building digital and physical infrastructure. While 80% of burden of shifting towards a circular economy lies among businesses, governments have a key role to play in introducing enabling

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regulations and setting up a regulatory framework that promotes lean production and ensures the reuse of resources as much and as long as possibile. As the researchers of Oxford university recently concluded that every pound of spending and borrowing spent during a severe downturn, can raise output by ÂŁ2 or ÂŁ3 and, indeed, there is some evidence that that could be higher28, the time to act is now.

Oral evidence: Greening the post-Covid Recovery, HC 347, available at https://committees.parliament.uk/oralevidence/764/html/

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