Circular economy is a new production and consumption model that ensures sustainable growth over time. With the circular economy, we can drive the optimization of resources, reduce the consumption of raw materials, and recover waste by recycling or giving it a second life as a new product.

The aim of the circular economy is therefore to make the most of the material resources available to us by applying three basic principles: reduce, reuse and recycle. In this way, the life cycle of products is extended, waste is used and a more efficient and sustainable production model is established over time.

Circularity can be centered on three overarching principles (priorities renewable inputs, maximize product use, recover by-products and waste), which define ten corresponding strategies. The diagram illustrates the continual flow of resources in both the production/distribution phase and the consumption phase.

From resource drain to resource gain

Across the board, companies in the energy, utilities and resources sectors are examining their use of resources with a fresh eye and striving to de-risk business models. Circularity provides a useful lens to consider strategic options, ensuring that resources are used with more care and, wherever possible, treated as assets that have cradle-to-cradle value.

Circularity goes to the heart of many of the challenges brought on by the global pandemic—the needs to rationalist operations, to construct more localized supply chains and to build resilience. Addressing them with circularity as a guiding principle yields the benefit of new business models that can add value and provide a competitive advantage.