By forgetting the social dimension, is the Circular Economy missing an opportunity?

With sustainability firmly on the agenda of boards and governments, circular economy stands out as one of the most promising pathways towards sustainable development. Circular economy seeks to replace the linear, ‘take-make-waste’ model of current production and consumption, with one focused on reducing, reusing, recycling and recovering materials. It can provide a range of business benefits, from reduced costs, a better reputation, and new opportunities for collaboration and innovation, or even new revenue models. Despite recent progress however, circular economy initiatives often miss or exclude the social dimension of sustainability, which threatens its effectiveness and unintended social impacts.

Taking stock

The early promise of the circular economy has borne fruit. Leading countries such as the Netherlands boast circularity rates of nearly 25% (1), although globally, the rate stands at 8%. Start-ups are getting in on the act as well, with recent multi-million-dollar financing successes. Examples include Paris-based Back Market ($510 million) that sells refurbished consumer electronics (2), or Twig, which provides instant cash for individuals looking to sell used fashion or electronics ($35 million) (3).

The circular economy is on a strong footing. Yet, it is argued that wider social implications have been missed or ignored, and too much emphasis has so far been placed on environmental aims. This lack of focus on social factors is problematic, as circular economy initiatives often have social impacts, while social factors can also affect the success of the circular economy. In this sense, we see a two-way relationship.

The forgotten social dimension?

The social dimension in circular economy is important not just for society and communities, but also for the success of the circular economy.

Circular economy initiatives can have both positive and negative social impacts. Think for example, of cleaner community spaces achieved through more recycled, or better air quality from the reductions in industrial pollution. On the other hand, circularity initiatives can increase the prices, limiting access for low-income communities, or disrupt traditional industries, leading to job losses in sectors that are less compatible with circular principles.

Social factors, such as values, beliefs and behaviours can, conversely, influence the success of circular economy initiatives. Think of the behaviour changes needed to increase recycling rates, or to take a product to a repair centre, rather than simply disposing of it. Behaviour is also critical to avoid rebound effects, where any environmental savings gained are lost as individuals increase consumption in response to the perceived savings or energy gains. Influencing consumer behaviours can be challenging. People often resist taking on new habits, potentially slowing the transition to circular economy, or blunting its intended positive effects.

Without consideration of the interaction between circular economy initiatives and social dimensions, there can be unintended and negative social implications, and the impact and success of circular economy initiatives themselves can suffer.

How can we address this situation?

Incorporating social dimensions into circular economy initiatives is crucial for creating a sustainable and inclusive model. First and foremost, societal stakeholders, including communities, should be engaged and included. Recent research exploring the inclusion of community actors in a circular economy initiative in the Netherlands has demonstrated both the potential and challenges of this approach (4).

The first challenge is ensuring equity. Societal actors are not experts in the circular economy, and often have less power, compared for instance with a construction company or the local government. Equity can be managed not just by including particular actors, but by carefully managing meeting agendas, and limiting the use of jargon and technical terminology.

The second challenge concerns how to best manage disagreements. With different perspectives included, it is inevitable that a variety of sometimes contradictory ideas and opinions emerge; even the question of which stakeholders to include in a circularity initiative often creates friction. Disagreement can have positive effects however, as the research found that it helped drive ideation and innovation through the desire to find agreement. Where efforts to reach agreement fail, initiatives can be advanced by ‘agreeing to disagree’ or ‘disagreeing agreeably’.

Lastly, there is the issue of uncertainty, over potential outcomes or who is responsible for what. This can impact trust and lead to stakeholder refusing to participate. Including exploration phases into initiatives can increase familiarity between stakeholders, make the connection between circular economy and societal actors more tangible, and enhance enthusiasm and trust.

More widely, education and awareness raising efforts should be pursued by ministries, local authorities, NGOs, or even consultancies where the business case is strongest. They should target both societal stakeholders and the actors responsible for the design and implementation of circular economy initiatives. These include groups such as managers, engineers, or policymakers etc. Training programs are already evident, such as Circular Friesland (5) in the Netherlands, or BioEco (6) here in France.

The wider benefits of circular economy initiatives should be emphasised, such as the potential for job creation. The transition to a circular economy will create diverse new roles. Workers will be needed in resource management and the recycling of waste, as well as the remanufacturing and refurbishing of used products. New designers and engineers specializing in creating products that are easily recyclable, repairable, and reusable will also among the new roles emerging.

The circular economy, beyond the one trick pony

The future of the circular economy looks bright. Any successful approach has to meet the needs of the society and communities that it serves. This must go beyond the responsible management of natural resources and the natural world, to include social factors, and allowing communities and individuals to play a bigger role than merely being consumers. By emphasizing the importance of inclusivity, fair practices, and community engagement, the circular economy has the potential to reshape societal values, boosting the environmental potential of circularity initiatives and wider sustainability efforts.

References

(1) Kirchherr, J., Bauwens, T., & Ramos, T. (2022). Circular disruption: Concepts, enablers and ways ahead. Business Strategy and the Environment. https://doi.org/10.1002/bse.3096

(2) Jan. 2022, Big Cash For Old Tech: Back Market Raises $510 Million For Reselling Old Electronics, Forbes

(3) Jan. 2022, Twig takes $35M to turn stuff you own into a way to pay, TechCrunch

(4) Eikelenboom, M., Long, T.B. Breaking the Cycle of Marginalization: How to Involve Local Communities in Multi-stakeholder Initiatives? Journal of Business Ethics 186, 31–62 (2023). https://doi.org/10.1007/s10551-022-05252-5

(5) Vereniging Circulair Friesland (NL) - https://circulairfriesland.frl/en/

(6) BioEco Toulouse (FR) - https://bioeco.univ-toulouse.fr/about/

Photo de Chevanon Photography (pexels.com)