What is a Circular Economy?

To understand what defines a circular economy, we must first unpack the current, traditional economy method, referred to as the ‘linear’ economy.

What is a Linear Economy?

In a linear economy we mine raw materials that are then processed into a product that is thrown away after use. This is often referred to as the ‘take-make-dispose’ plan.


Ecological disadvantages: the ecological disadvantage of the linear economy is that the production of goods is at the expense of the productivity of our ecosystems. Each step of this model has negative repercussions on the environment. The collection of raw materials results in high energy and water consumption, emissions of toxic substances and disruption to the natural landscape. Furthermore, product formation also uses large volumes of energy and water as well as releasing toxic gases into the atmosphere. At the end of this products lifecycle, it is then disposed of in landfill, often releasing toxic emissions as it slowly biodegrades.

Economic disadvantages: 

  • Fluctuating raw material prices- the volatility of resource prices means that there is a greater risk to the economic markets. People are less likely to invest in these products because of their high prices but because of this limited interest there is again an inflation of price.
  • Critical material use – another major issues lies in the use of limited materials. By using these non-renewable materials for consumer products there is only a finite resource which is steadily depleting.
  • Interdependence – in the linear economy chain there is a large amount of interdependence. Across the globe different industries rely on each other to keep the economy surviving. For example, countries with limited water instead trade with oil to receive grain to eat. This is not a sustainable plan as eventual oil will deplete and this co-dependence will have a ripple effect across the whole chain.

What is a Circular Economy?

Ellen Macarthur Foundation defines the circular economy as being based on the principles of designing out waste and pollution, keeping products and materials in use and regenerating natural systems.

The following three principles are being used as the basis of the circular economy model:

Product design

A large majority of the waste and pollution comes from the way we design products. It is posited that waste and pollution are not accidents but are direct consequence of decisions made at the developmental design stage. It is at this stage that around 80% of environmental impacts in products are determined. Through changing mindsets to understand that a large majority of waste issues can be reduced in the initial stages of production and harnessing new technologies and materials, we can ensure that waste and pollution are not created in the first place.

Reusable products

The second principle in the circular economy model is making products that are reusable. This also ties into having products repaired and remanufactured. One of the main focuses in the circular economy system is that we reduce the impact we have on our surroundings and the environment. By reducing product waste and opting for reusable materials we can work towards more sustainable methods.

Regenerating the environment

The final principle works from the agenda of not only protecting but actively improving the environment. It is founded from the idea that in nature there is no such thing as waste, everything is has a symbiotic relationship. For example, when a tree drops its leaves this feeds nutrients into the soil which helps to nurture more tree growth and it can also act as a food source for animals. In packaging this can be developed through partnerships with environmental organisations and developing bio-packaging from sustainable sources.

If you want to find out more about the range of sustainable products that Southgate has to offer click here or contact a member of our team today on enquiries@southgateglobal.com

Scroll to Top