Building Blocks of a Circular Economy

Through its work with organisations that are making the transition towards a circular economy and an analysis of case studies, the Foundation has identified the following four essential building blocks of a circular economy. Read about each of the building blocks and relevant case studies below.

Circular economy design


Companies need to build core competencies in circular design to facilitate product reuse, recycling and cascading. Circular product (and process) design requires advanced skills, information sets, and working methods. Areas important for economically successful circular design include: material selection, standardised components, designed-to-last products, design for easy end-of-life sorting, separation or reuse of products and materials, and design-for-manufacturing criteria that take into account possible useful applications of by-products and wastes.

New business models


The shift to a circular economy requires innovative business models that either replace existing ones or seize new opportunities. Companies with significant market share and capabilities along several vertical steps of the linear value chain could play a major role in circular economy innovation and driving circularity into the mainstream by leveraging their scale and vertical integration. While many new models, materials, and products will come from entrepreneurs, these brand and volume leaders can also play a critical role. Profitable business models and initiatives will inspire other players and will be copied and expanded geographically.

Reverse cycles


New and additional skills are needed for cascades and the final return of materials to the soil or back into the industrial production system. This includes delivery chain logistics, sorting, warehousing, risk management, power generation, and even molecular biology and polymer chemistry. With cost-efficient, better-quality collection and treatment systems, and effective segmentation of end-of-life products, the leakage of materials out of the system will decrease, supporting the economics of circular design.

Enablers and favourable system conditions


For widespread reuse of materials and higher resource productivity to become commonplace, market mechanisms will have to play a dominant role, but they will benefit from the support of policy makers, educational institutions and popular opinion leaders. Examples of these enablers include:

  • Collaboration
  • Rethinking incentives
  • Providing a suitable set of international environmental rules
  • Leading by example and driving up scale fast
  • Access to financing