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  • Writer's pictureGillian Parker

Circular Economy Rhetoric Needs a Reality Check

Gillian Parker shares her top takeaways from Economist Impact’s 2023 Sustainability Week Asia - and why there is no such thing as perfect in our transition to a sustainable future.


  • The global economy is still wasteful, linear and overly reliant on fossil fuels

  • Creating a circular economy will require complex systems and co-ordination along the entire value chain

  • Plastics recycling is not keeping pace with consumption, but this is only one element in our transition

  • Regulatory pressure is increasing - are defined standards on the horizon?

Faced with the devastating impacts of climate change and environmental degradation, governments and businesses are searching for sustainable solutions that will both save the planet and allow for unfettered economic growth. Enter the circular economy. The theory goes that in a circular economy we can eliminate waste and promote economic growth using the least amount of natural resources possible. Given that this requires a radical rethink of consumerism and a reshaping of global supply chains, building a circular economy is proving fiendishly difficult.

Earlier this month, during Economist Impact’s Sustainability Week Asia in Singapore, panellists discussed the complexity of pivoting from a linear to a circular system. What was clear is that it is going to take a monumental combined effort to replace our wasteful “take, make, dispose” economic model with systems that design out waste and make products more durable, reusable, repairable and recyclable.

Here are a few key takeaways from the week’s discussions:

The global economy is still wasteful, linear and overly reliant on fossil fuels

Only 8.6% of the world economy is circular, according to the Circularity Gap Report. More than 90% of the resources extracted and consumed do not return to the production cycles but become waste. This isn’t just fuelling a pollution crisis, it’s turbocharging climate change.

Cradle-to-grave (scope 1, 2 and 3) greenhouse-gas (GHG) emissions from single-use plastics in 2021 were equivalent to all GHG emissions generated by the UK that year—-about 450m tonnes, according to the Minderoo Foundation, a non-profit which launched its “Plastic Waste Makers Index 2023” report at the beginning of Sustainability Week. “Most emissions are produced by the oil and gas and petrochemical industries in the ‘upstream’ part of the life cycle,” the report said. Despite rising consumer worry about the environment, regulation and corporate attention, there is more single-use plastic than ever before.

A huge amount of raw material is being wasted. For instance, around 40% of tyres end up in landfills or unidentified sites. Greater efficiencies in supply chains will achieve meaningful reductions in carbon emissions. “We have to redesign supply chains,” said Sreepadaraj Karanam, vice-president of sustainability and CSR at Bridgestone Asia Pacific. Supply-chain emissions represent the bulk of scope 3 upstream emissions, and for most businesses they outweigh emissions from direct operations.

“Don’t let the perfect be the enemy of good”

This adage was regularly cited during panel discussions in relation to the difficulty of achieving a truly circular economy. Firms are finding it much harder than they thought to enact circularity to reduce waste in their production lines. The problem is that current economic and regulatory frameworks incentivise linear models of production and consumption, making it challenging to adopt circular approaches. Furthermore, the circular economy requires a significant shift in the way products are designed, produced, consumed and disposed of. It involves complex systems thinking and co-ordination among stakeholders along the entire value chain. This might mean working with industry associations, policymakers and even competitors to tackle the issue, some noted during discussions. Consumer behaviour is also key to ensuring the success of circular economies, but consumers need to be willing to change their habits and support sustainable practices.

Complexity is a challenge to achieving circular economies, but it is not necessarily a reason for it to fail, argued Nanette Medved, founder and executive chairperson of HOPE and Plastic Credit Exchange. “We have no choice,” she added. “We are burdening people and the planet to an extent that we cannot sustain anymore.”

Recycling is failing to scale at a rate that can cope with the growth in consumption

The inability of plastics recycling to scale is a market failure, according to Marcus Gover, who leads Minderoo’s No Plastic Waste Initiative. The costs associated with the collection and sorting of waste, the contamination of materials that affect quality and yield, and inconsistent design are just some barriers to recycling. Meanwhile, virgin plastic remains inexpensive, disincentivising costly and labour-intensive recycling efforts.

Russell Mahoney, vice-president of public affairs, communications and sustainability for South-East Asia, Australia, New Zealand and the South Pacific at Coca-Cola, said that the brand is struggling to source recycled plastic at a reasonable price in Asia. Together with some of the world’s biggest consumer-goods companies, Coca-Cola is almost certain to miss a target to make plastic packaging more sustainable by 2025, according to a study by the Ellen MacArthur Foundation and the UN Environment Programme.

Recycling plastic is certainly related to the circular economy, but it is only one aspect of a larger system of sustainable production and consumption. Nevertheless, the ability—or, more often, inability—to recycle products and materials was a recurring theme during the week, and one that was intrinsically linked to creating a circular economy.

A failure to close the loop on the production and use of materials and products will hit bottom lines

A circular economy means that a production cycle is fully self-sufficient and aims to keep materials and products in use for as long as possible, by reducing waste and reusing, repairing and refurbishing materials and products. A failure to retrieve valuable raw materials at the end of a product’s life will hit a company’s resilience in the face of regulatory headwinds, as well as crises such as volatile energy prices, said Mr Karanam. “Suddenly the regulatory pressure is increasing. Europe is always setting the standards, and there are definite circular-economy standards coming.”


Sustainability Week Asia took place on February 7th to 9th 2023. Register free to watch on-demand and catch up on the discussion.

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