Circular economy companies and startups are making great strides to mitigate climate change by adopting new ways of resource management and manufacturing, and preserving the environment along the way.
Moving towards a circular economy is crucial for extending the longevity of our natural resources in a sustainable way that can also enhance the quality of life for consumers.
Overcoming this hurdle includes acknowledging the benefits of sustaining already processed resources by circulating them within the economy for reuse.
Thankfully, many large corporations and startups are already embracing the concept of a circular economy.
To see how, let’s delve into the business model of some circular economy companies!
What is a Circular Economy?
A circular economy is best described as a resource-preservation economy that cuts waste and reduces carbon emissions by circulating materials and products for as long as possible.
The aim is to encourage the responsible utilization of natural resources by modifying the design of materials, products, and services to reduce their dependence on resources and making use of waste as a valuable resource to create new materials and products.
At the end of a product’s life, the materials used to make that product are kept in the economy and reused wherever possible.
A Circular Economy vs A Linear Economy
Recycling in a circular economy typically refers to refurbishing, repurposing, and extracting materials for further use.
The concept of a circular economy essentially involves minimizing waste. This means that when a product has served its purpose, its constituent materials are reused within the system to the greatest extent possible.
Thanks to recycling, these materials can be productively used repeatedly.
On the other hand, in a traditional linear economy, resources are acquired to make products, which are consumed and discarded as waste.
A linear economy requires a continuous flow of raw materials and, in the process, produces vast quantities of waste that pollute the environment.
A linear economy relies on large quantities of cheap, easily accessible materials and energy.
Circular Economy Transformations
Currently, only 7.2% of used materials are cycled back into the economy. This significantly burdens the environment, perpetuating climate, biodiversity, and pollution issues.
During the last 20 years, the amount of material consumed has increased by more than 65% worldwide, and in 2019 it reached 95.1 billion metric tons. Additionally, it is estimated that 13% of the food that was intended for human consumption was lost after harvesting, and another 17% was wasted by retailers and end-users in the same year.
The United States Environmental Protection Agency (EPA) has outlined a visionary plan to tackle waste management and establish a range of measures aimed at promoting a circular economy.
This vision reflects the urgency of the climate crisis.
The Save Our Seas 2.0 Act is a circular economy initiative that involves restorative or regenerative industrial processes and economic activities.
This enables products from resources to maintain their highest value for as long as possible and targets the elimination of waste through superior designs of materials, products, and systems.
It is a change to the linear economy in which resources are mined, made into products, and become waste.
Carbon-neutral companies are on the rise. These are businesses with net zero greenhouse gas emissions.
Investing in green energy and zero-waste technologies is a sure way to convert to a circular economy, and the reward is being recognized as an environmentally friendly business worthy of association.
How Does a Circular Economy Impact the Environment?
Slowing down the impact of climate change requires us to move towards a circular economy.
According to the International Resource Panel of the United Nations, nearly 50% of worldwide greenhouse gas emissions are caused by natural resource extraction and processing.
Embracing the concept of a circular economy can potentially ensure environmental protection, economic improvement, and social justice.
However, to make a circular economy sustainable, it is essential to ensure a certain level of social equity.
Check out this video by the Ellen MacArthur Foundation:
Ethical company policies and behavior involve sustainable sourcing and use of materials, reducing production waste, ensuring energy efficiency, and advocating fair labor policies.
How we extract, process, and dispose of resources can affect vulnerable communities negatively. This is evident in the environmental and health impacts caused by a non-circular economy.
Many landfills, as well as manufacturing and processing facilities, are located close to low-income communities, usually plagued by unemployment and a lack of education and opportunities.
The change to a circular economy can empower existing sectors to stimulate local employment and introduce training facilities to provide new circular economy skill sets.
This can be achieved through the repair and reuse sectors within new circular business entities.
In the past ten years, the prices of natural resources have either gone up or become more unpredictable. Opting for recycling of raw materials can mitigate the risks linked with supply, such as price fluctuations, availability, and dependence on imports.
It is essential to emphasize the significance of critical raw materials that are needed to manufacture technologies that have a pivotal role in achieving the objectives of mitigating climate change. For instance, batteries used in electric vehicles and energy storage systems are prime examples of such technologies.
The environment is taking a hard hit as worldwide material consumption increased eight times in the 20th century, and by 2050, global resource use is expected to triple.
As a result, the world the growing challenge that many resources are slowly depleting and will probably become scarce.
What are the Benefits of a Circular Economy?
A circular economy has the potential to:
- Reduce our dependency on non-renewable resources
- Lower carbon emissions
- Reduces waste
- Provide benefits to end-users in terms of savings
- Creates new opportunities for companies
Among the benefits to companies is new job creation. The circular economy may also decrease the cost of materials, allowing companies to run more efficiently.
Achieving a circular economy can be a daunting task and will require a global effort of individuals, businesses, and governments to achieve.
The benefits alone should be inspirational enough to transition to a circular economy.
4 Circular Economy Startups
The circular economy startups listed below are destined for great heights. Their vision and approach to sustainability are on a whole new innovative level.
LICO
LICO Materials Private Limited is a startup circular economy company with a focus on recycling end-of-life lithium-ion batteries.
They are geared to provide a cleaner, more ethical method of producing critical finite battery materials than the mining industry.
LICO has created a sustainable circular economy solution in the lithium-ion battery supply chain for the recovery of critical materials.
Lithium recovery, cobalt recovery, manganese, and nickel are recovered and resupplied to battery manufacturers, giving critical materials a second life.
Their battery recycling plant uses scalable and standard equipment to separate plastics, copper, aluminum foils, and black mass.
The black mass-produced contains materials like lithium, cobalt, manganese, and nickel. Proprietary hydrometallurgy technology is used to recover critical metals from the black mass produced during shredding.
Coffee Resurrect
Coffee Resurrect is a startup that specializes in upcycling coffee waste collected from coffee bars.
The initial range of products utilizing coffee essential oil derived from used coffee grounds has been introduced by the company.
Coffee Resurrect is a startup that transforms used coffee grounds collected from restaurants and cafes into natural ingredients that are used in nutraceutical, functional food, and personal care products.
The byproducts, which include coffee oil, fiber, and flour, serve as a base for a variety of personal care items and toiletries.
The company uses biotechnology and coffee waste as a platform to create all-natural ingredients for personal care, nutraceuticals, and functional foods.
Using a unique technology that involves supercritical carbon dioxide, it is able to extract vital components from waste, such as lipids, proteins, sugars, polyphenols, tocopherols, and antioxidants.
Gremix Energy
Gremix Energy is a new startup that decarbonizes concrete by recycling ash from landfills to replace cement.
Gremix is developing a cost-effective and scalable solution to reduce cement emissions.
The key area of interest for the organization was to obtain fly ash, a residual product of coal burning, from waste disposal sites to use as a substitute for cement in the manufacturing of concrete, up to a maximum of 40%.
Gremix has come up with a solution to tackle the scarcity of fly ash that is usually obtained from coal-powered power plants, which are being closed down.
They recycle ash from utility landfills to address the issue. The production of cement is responsible for up to 8% of global CO2 emissions.
However, by employing advanced technologies to process ash from landfills, it is possible to reduce CO2 emissions. Moreover, the cement produced as a result of this process is of high quality and has better bonding properties than conventional cement, which is made from limestone.
The black mass-produced contains materials like lithium, cobalt, manganese, and nickel. Proprietary hydrometallurgy technology is used to recover critical metals from the black mass produced during shredding.
Made of Air
Made of Air is a company that aims to address the issue of emissions caused by the growing use of concrete, steel, and wood in urban areas.
They have developed carbon-negative materials that have already been adopted by major corporations like H&M, BMW, and Audi.
Made of Air is a company that utilizes biochar waste obtained from plant materials like tree clippings or crop residue to produce thermoplastics that are high in value and carbon-negative.
The company saves non-food biowaste from being incinerated and turns it into elemental carbon, locking in its CO2 content forever.
Made of Air uses its patented technology to create a filler that can be used to decarbonize incumbent materials radically.
Their unique smart coating technology helps to replace global plastics with biochar, which can remove an average of 3 gigatons of CO2 from the atmosphere per year.
8 Companies that Embrace a Circular Economy
Below is a list of circular economy companies that are leaders in the transition to a circular economy:
Patagonia
Patagonia first made its commitment to transition to a circular economy in 1986.
They create durable and comfortable everyday clothing using eco-friendly materials like organic cotton, hemp, and other sustainable fibers. These materials not only support farmers striving towards organic certification but also help reduce the environmental impact of the brand’s products, promoting a circular economy.
The company has set a goal of promoting sustainable materials and practices to minimize the environmental impact of its products.
Additionally, the Worn Wear program by Patagonia encourages its customers to recycle, reuse, and repair their garments, thus reducing the company’s environmental footprint.
A repair service is offered for any damages to the clothing, and a trade-in option is provided where customers are provided with store credits for used Patagonia clothing.
Through these initiatives, Patagonia prolongs the lifespan of its products while also minimizing waste.
IKEA
IKEA is a Swedish home-retail conglomerate founded in 1943 as a mail-order sales business but began to sell furniture five years later.
IKEA is currently working towards creating sustainable livelihoods for underprivileged families. The company is exploring possibilities in regenerative agriculture, green enterprise, and the effective utilization of renewable energy.
IKEA’s circular economy is implementing three main initiatives, namely, The take-back program, circular services, and investment in sustainable materials.
IKEA offers a Take-Back program that facilitates the return of furniture for repurposing or recycling.
In addition, customers can opt to rent items or buy refurbished furniture, promoting the reuse of products and encouraging sustainable shopping habits.
To reduce the company’s impact on climate change, many IKEA products are made from FSC-certified wood and recycled plastic.
Interface
Interface, Inc. is a global commercial flooring solutions company, specializing in modular carpet tiles, luxury vinyl tiles (LVT), and rubber flooring. Founded in 1973 by Ray Anderson, the company has become renowned for its innovative approach to sustainability and circular economy practices.
By implementing these practices, Interface has not only reduced its environmental impact but also demonstrated that sustainability and profitability can go hand in hand. The company’s stock price has increased by 84% overall, with revenues reaching $1.3 billion in 2023, challenging the notion that eco-friendly practices compromise financial performance
Interface has made significant strides in implementing circular economy principles throughout its operations:
ReEntry Program
Launched in 1995, the ReEntry program is Interface’s take-back initiative for used carpet tiles. Since 2016, the company has collected over 31,750 tonnes of post-consumer carpet tile through this program
Recycling Capabilities
Interface has expanded its recycling facilities, particularly in Scherpenzeel, Netherlands. The plant now uses an innovative process to recycle post-consumer carpet tiles that cannot be reused, allowing the materials to be immediately returned to the production cycle
Circular Materials
The company incorporates recycled and bio-based materials in its products. As of now, 51% of the materials used in Interface products come from recycled or bio-based sources
Carbon Neutral Products
Interface manufactures flooring products that are carbon neutral across their full lifecycle, making them the first global flooring manufacturer to achieve this milestone
Innovative Initiatives
Net-Works Program
In collaboration with the Zoological Society of London and Aquafil, Interface launched the Net-Works program. This initiative collects discarded fishing nets from coastal communities, which are then transformed into ECONYL, a 100% recycled yarn used in carpet manufacturing
CQuestBio Backing
Interface has developed a carpet tile backing called CQuestBio, which incorporates recycled and bio-based materials
Recognition and Impact
Interface’s circular approach to carpet tile production has been recognized as one of three “Circularity Lighthouses in the Built Environment” by the World Economic Forum and McKinsey & Company.
Unilever
Unilever is a multinational consumer goods corporation established over 100 years ago and is one of the world’s largest consumer goods companies.
They are known for their variety of popular brands available in over 190 countries where an estimated 3,4 billion people use Unilever products daily.
Unilever has launched several projects to support its circular economy goals:
CIRCLE Alliance
In partnership with EY and USAID, Unilever has launched the CIRCLE Alliance, a $21 million public-private collaboration aimed at scaling solutions to reduce plastic use and tackle plastic waste. This initiative supports entrepreneurs and small businesses across the plastics value chain, with a focus on empowering women in the informal waste collection sector.
Waste Collection Programs
“Exchange trash for gifts“: This program, initiated in Hanoi in 2020, promotes waste classification at the source among households and schools.
Public-Private Partnership
Unilever participates in a collaborative effort involving various stakeholders to build a circular economy in plastic waste management. This initiative has successfully collected and recycled 25,000 tons of plastic waste.
Recycling with Reclaimers
In South Africa, Unilever has partnered with African Reclaimers Organisation (ARO) to implement a pilot project in Johannesburg. This initiative aims to increase collection rates of recyclable materials from households and offices while improving the livelihoods of reclaimers.
Innovative Packaging Solutions
Unilever is exploring various approaches to reduce plastic use and promote circularity:
Refill and Reuse Models
The company has introduced refillable and reusable packaging options for several products, such as Cif ecorefill and refillery stores in Indonesia.
Light-weighting
Unilever has reduced packaging volume by 20% through design advances.
Alternative Materials
The company is exploring the use of materials like aluminium, glass, and paper as alternatives to plastic where feasible.
Achievements and Outcomes
- More than 100,000 tons of post-consumer recycled plastic used in packaging in 2024
- 54% of Unilever’s plastic packaging is recyclable, reusable, or compostable as of 2024
- The use of virgin plastic has been reduced by 12% since 2018
By implementing these services and initiatives, Unilever is working towards building a more sustainable and circular economy, addressing the challenges of plastic waste, and promoting responsible consumption and production practices.
TerraCycle
TerraCycle is an innovative company dedicated to eliminating waste through recycling and repurposing traditionally non-recyclable items. Founded in 2001, it operates in over 20 countries. The company partners with major consumer product companies, retailers, and facilities to divert waste from landfills and incinerators.
TerraCycle’s services span multiple areas of waste management and recycling.
Recycling Programs
Operates hundreds of free recycling programs for traditionally non-recyclable items. These programs cover a wide range of products, from wetsuits and instrument strings to disposable razors. By partnering with retailers and encouraging community drop-off points, TerraCycle increases accessibility and convenience for consumers. Noteworthy big brand partners include:
- Colgate-Palmolive: Recycling oral care products
- Gillette: Recycling razors and packaging
- L’Oréal: Recycling beauty product packaging
Zero Waste Box
The Zero Waste Box system is a comprehensive recycling solution for items not accepted by typical curbside services. This all-in-one approach allows for the recycling of various waste streams, including coffee capsules, art supplies, and plastic packaging. TerraCycle processes these materials into pellets or powders, which are then used to create new products.
Industry-Specific Solutions
Recognizing unique waste challenges across different sectors, TerraCycle has developed tailored recycling solutions:
- SalonCycle
- ScienceCycle
- VetCycle
- OfficeCycle
These industry-specific programs address the particular waste management needs of various businesses.
Loop Platform
TerraCycle’s Loop initiative is a groundbreaking reuse platform that aims to reduce single-use packaging. Operating in the United States, Japan, and France, Loop partners with major brands and retailers to offer products in durable, reusable packaging. Consumers pay a deposit for the packaging, which is refunded upon return.
Regulated Waste Management
Through TerraCycle Regulated Waste, the company handles the compliant management of regulated, universal, and hazardous waste. This includes items such as fluorescent lamps, solar panels, batteries, and electronic waste.
Global Foundation
The TerraCycle Global Foundation focuses on capturing plastic waste from polluted waterways before it reaches the ocean. This holistic approach combines education, community outreach, and partnerships with local entities to address plastic pollution at its source.
Innovation in Waste Management
The TerraCycle Discovery initiative explores new ways to derive value from waste, such as extracting baby wellness insights from used diapers. By offering these diverse circular economy services, TerraCycle aims to reduce landfill waste and promote a more sustainable approach to consumption and waste management.
Adidas
Adidas, which is the second largest sportswear manufacturer in the world and the largest in Europe, holds an 8.33% share in Bayern München (football club).
Adidas has shown that even large corporations can take accountability for their contribution to the plastic crisis and commit to using their power to make a beneficial difference.
Adidas has introduced the Three Loop Strategy, which comprises three closely connected measures.
The first one aims to recycle plastic waste, the second one focuses on creating shoes that can be remade, and the third one emphasizes regeneration.
Adidas aims to use biodegradable materials that will disintegrate naturally into their surroundings.
HP
HP has been incorporating circular practices into its operations for nearly two decades by collecting used ink cartridges.
The company launched the world’s first monitor and an entire PC made from ocean-bound plastics as part of its entrenched recycling regiment.
The company’s goal is to become net-zero by 2040, with 100% renewable energy.
Adidas has introduced the Three Loop Strategy, which comprises three closely connected measures.
The first one aims to recycle plastic waste, the second one focuses on creating shoes that can be remade, and the third one emphasizes regeneration.
Adidas aims to use biodegradable materials that will disintegrate naturally into their surroundings.
TrusTrace
TrusTrace is a Technology company that provides a leading platform for traceability and compliance data management.
They focus on high-volume footwear and textile value chains, particularly high-risk commodities and production facilities in high-risk regions.
The company’s mission is to introduce transparency to both producers and consumers in the fashion industry. These industries account for 10% of humanity’s carbon emissions.
With its cutting-edge digital platform, TrusTrace aims to raise awareness about individual responsibilities and promote ethical practices.
The company’s exceptional dedication to sustainability and becoming one of the best circular economy companies has earned it the prestigious Solar Impulse label.
Conclusion
Companies across the world are embracing the concept of a circular economy. It’s a way of promoting sustainable development and reducing the impact of human activity on the environment.
This movement has been spurred on by our recognition of the current climate crisis and volatile political landscape.
Without transitioning to a circular economy, our natural resources will not be able to sustain the world’s growing population indefinitely.
Adopting a circular economy gives a new lease of life to already mined and harvested resources.
In addition, it provides new employment opportunities to disadvantaged communities.
The use of advanced technology and recycling initiatives reflect what is possible under a circular economy. The last phase is to fully adopt a circular economy mindset.
Frequently Asked Questions
Are recovered materials used to manufacture the same products?
Not specifically, but in cases like battery materials, some recovered materials are used to manufacture new batteries. Recovering materials to manufacture the same or similar products is part of a circular economy. However, the objective is to ensure recovered materials remain circulating in the economy irrespective of their designated purpose.
How does a circular economy mitigate climate change?
Mining causes enormous damage to the environment such as deforestation, water pollution, and releasing greenhouse gasses. By recovering already mined elements, we are conserving the environment and materials that are becoming scarce.
Recovered materials are being used in conjunction with renewable energy to move away from fossil fuels, a leading cause of the climate crisis.
How does the Circular economy differ from the linear economy?
A linear economy is characterized as a one-way flow of materials, energy, and information from extraction to disposal. On the other hand, a circular economy is characterized as a loop or ecological system. Materials are extracted, used, and recovered to produce new products. The flow in a circular loop regenerates and renews resources while conserving energy and the environment.
References
World Economic Forum: What Is the Circular Economy, and Why Does it Matter that It is Shrinking?
UNDP: What is Circular Economy and How it Fights Climate Change
EPA: What is a Circular Economy?
Apolitical: Achieving Social Benefits in the Circular Economy