What is the Circular Economy?

The circular economy supports sustainability by enabling economic growth without greater resource use.

Companies sold 1.52 billion smartphones worldwide in 2019. Meanwhile, almost half of American smartphone users reported upgrading their phones before the phones stopped working. And almost all discarded phones go to landfills.

This is a common pattern in our current “linear economy,” where we take materials to make something and then get rid of it when we’re done using it. The linear economy is a system that assumes that our supply of resources is infinite and that the Earth can absorb all our waste.

This approach has real costs, for businesses and the planet. Those landfilled phones, for example, are full of valuable materials. A tonne of iPhones delivers 300 times more gold than a tonne of gold ore. The linear economy doesn’t capture that value. Instead, the old phones become waste and companies manufacture new phones in a resource- and energy-intensive process.

A circular economy changes this model.

This is part of the Network for Business Sustainability series "The Basics," which provides essential knowledge about core business sustainability topics.

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Video credits
Animation by Lexi Wright
Voiceover by Abby Litchfield
Script by Lexi Wright and Abby Litchfield