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What is circular economy

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6 August, 2019
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The circular economy is an economic and ecological concept which is based on the idea of transforming waste into resources. That is to say, reusing waste. This particular concept has emerged as a result of the growing awareness amongst the population with regards to the environment, climate change and the unsustainability of traditional production practices. This alternative not only looks to make production and development compatible with environmentalism, but it also aims to boost profits and promote competitivity. This is possible thanks to its saving and reusing mentality.

What are circular economy principles

This model is governed by a series of principles, which, depending on the level of implementation, may or may not be applicable:

  • Ecological responsibility. In a circular economy, the environment is one of the principal concerns. For this reason, all activities, products and services must be analysed, and their potential environmental impact must be taken into consideration in any decision-making processes.
  • Recycling in the broadest sense of the word. In this case, we are talking about transforming waste so that it can be reused as useful resources. Nonetheless, this concept goes further than this, including reusing products, or parts of products that are no longer able to serve the purpose for which they were invented, by reintroducing these products back into the economic circuit.
  • The energetic revaluation or reuse of any waste which is not suitable for recycling.
  • The optimisation of resources by using internal production loops which make it possible for materials, machinery and energy to be reused.
  • The use of renewable energy sources. This is one of the main areas of interest in the circular economy. By using renewable energy sources we will be able to remove fossil fuels and other finite resources from the equation, thereby reducing environmental damage and helping to alleviate the greenhouse effect.
  • The functionality economy. This principle consists of replacing the sale of certain products with a rental system. In this way we will be able to maximise the profitability of said products whilst also reducing the levels of production.
  • An eco-friendly relationship with the industrial and business ecosystem. Promoting environmentally friendly agreements and setting trends in the current panorama.

Re-use icon in a bag - What is circular economy

 

Striking the balance between the social and economic benefits

Unlike the models used in traditional industries in which the economic benefit is the absolute criteria that must be taken into account in all decision-making processes, the circular economy offers an alternative in which the social and environmental benefits are also considered. It is often the case that profits and responsibility are considered as conflicting concepts, however the circular economy model has demonstrated that there is no reason why this should be the case. Companies can consider both of these criteria amongst their main priorities, and in fact, each of these aspects can contribute to attaining the other.

Another reason why this model is being endorsed is due to the fact that the market tends to adapt to the social context in which it is being developed. This circular economy has emerged as a response to the growing concern for environmental issues amongst the new generations. Due to the irrefutable effects of climate change and its forecast for the short and medium term, there is a growing awareness amongst citizens, companies and associations alike. Therefore companies could potentially reap great rewards by investing in this type of economy.

Here at C-VOUCHER we are fully aware of the value of the circular economy, and we provide support to companies who are looking to take this decisive step. Our acceleration program helps to fund important and promising ideas, helping to create circular business models and prototypes when there is no market test. The participating companies receive a complete pack that includes all of our services. Our goal is to take the companies to the next level by helping them to implement the circular economy solutions that they develop during the program as this in turn will enable them to improve their operations and boost their competitivity.

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