Yes, you read the title right! It’s time to say goodbye to the traditional, linear “take-make-waste” economy and welcome the dawn of the new and improved circular economy. Much as digital start-ups disrupted the pre-internet generation, circular businesses and those who embrace the opportunities it offers are coming of age and disrupting the status quo. Whilst not a new concept in itself, the circular economy is seeing a new push following Labour’s election manifesto commitment to reducing waste by moving to a circular economy. But what is it and why is it important?

What is the Circular Economy?

Historically, the traditional, linear “take-make-waste” approach has created vast quantities of products and packaging are disposed of after short usage with UK households sending approximately 25.7 million tonnes of waste into landfill every year. This has represented  a significant contributor to greenhouse gas emissions. The circular economy is emphasising and empowering the reusing, recycling, repairing and sharing of products and resources to minimise waste ending up in landfill. This, in turn, reduces carbon emissions and loss of biodiversity by extracting the maximum value possible before converting the goods to waste. 

Why embrace it?

Other than the obvious net zero advantages, the circular economy offers many potential economic benefits too. Whilst there are undoubtedly barriers to producers adopting circular economy practices, including potentially higher upfront investment, reimagining supply chains, being at the forefront of this movement can offer substantial first mover advantage.

For example, a more circular economy allows producers to benefit from cost savings associated with increased efficiency and reduced procurement costs relating to purchasing raw materials. They may also see improved relationships with their consumer base, from both shared sustainable values and from increased touchpoints with customers through repairs, returns and recycling. Organisations can access new income sources and  business models using from items which were previously seen as waste or by-products. 

Role of the Government

The UK Government’s broad policy objective of Extended Producer Responsibility (EPR) is a good example of the push to shake up the resource and waste management sector. 

EPR aims to reduce the burden of waste management and disposal on the consumer and local authorities by incentivising the producer to  develop products that can be reused or recycled. While this can create logistics and costs challenges for producers,  it also offers opportunities to extract additional value from used materials. 

However, there is still much to do politically to ensure the right incentive mechanisms and cultural changes are in place to maximise the potential of the circular economy. Whilst the Labour government has committed to reducing waste by moving to a circular economy, they have not provided concrete policies either in their manifesto or as part of the recent budget on what this will involve. 

How can Burges Salmon help?

The ongoing policy shift towards a circular economy will impose additional obligations on retailers and producers and provide exciting opportunities to find new revenue sources. At Burges Salmon, we are at the forefront of supporting clients with the circular economy transition and have impressive specialist expertise in the investment, construction, commercial and regulatory aspects of Waste and Resource Management and we  recently supported Danu Robotics on an investment from Sustainable Ventures to support its innovation in recycling waste management. 

If you would like any further information, or advice related to any of the information in this article, please contact Nick Churchward, Greg Fearn or your usual Burges Salmon contact.