Schools of Thought

The circular economy concept has deep-rooted origins and cannot be traced back to one single date or author. Its practical applications to modern economic systems and industrial processes, however, have gained momentum since the late 1970s, led by a small number of academics, thought-leaders and businesses.

The generic concept has been refined and developed by the following schools of thought:

Natural Capitalism

“Natural capital" refers to the world’s stocks of natural assets including soil, air, water and all living things. In their book “Natural Capitalism: Creating the Next Industrial Revolution”, Paul Hawken, Amory Lovins and L. Hunter Lovins describe a global economy in which business and environmental interests overlap, recognising the interdependencies that exist between the production and use of human-made capital and flows of natural capital. The following four principles underpin natural capitalism:

  • Radically increase the productivity of natural resources - Through radical changes to design, production and technology, natural resources can be made to last much longer than they currently do. The resulting savings in cost, capital investment and time will help to implement the other principles.
  • Shift to biologically inspired production models and materials - Natural capitalism seeks to eliminate the concept of waste by modelling closed-loop production systems on nature’s designs where every output is either returned harmlessly to the ecosystem as a nutrient, or becomes an input for another manufacturing process.
  • Move to a “service-and-flow” business model - Providing value as a continuous flow of services rather than the traditional sale-of-goods model aligns the interests of providers and customers in a way that rewards resource productivity.
  • Reinvest in natural capital - As human needs expand and pressures on natural capital mount, the need to restore and regenerate natural resources increases.

DIF 2015 Headline Act: Hunter Lovins "Natural Capitalism"