Davos, The Guardian, McKinsey, the circular economy ...

Posted in: Comment, News and Updates

... and the Ellen MacArthur Foundation. [Note 1] Although this looks like a variation on the old IQ test training game of putting disparate phrases into one sentence, if you go to the Guardian Sustainable Business hub, you'll find an article, reporting that the circular economy is an idea being taken seriously by significant businesses.  [Note 2] As the article notes:

At Davos this year, the Ellen MacArthur Foundation published its second report which highlights the fact that the goods an OECD citizen buys for consumption annually – 800 kg of food and beverages, 120kg of packaging, and 20kg of new clothing and shoes – are, for the most part, not returned for any further economic use.

In the current "take-make-dispose" system, around 80% of these materials will end up in incinerators, landfill or wastewater. They come to a dead end.  The report says that even in the short term, without a dramatic application of bio-based products and the full redesign of supply chains, the value that can be recovered could be increased to 50%.

But if something more dramatic does happen to make, through design, the economy less of a make 'n' dispose affair, then much more can be achieved.  As the Foundation says:

Analysis shows that the adoption of the circular economy could be worth as much as $700 bn in consumer goods material savings alone, and also highlights added benefits in terms of land productivity and potential job creation.

The report features specific examples in product categories that represent 80% of the total consumer goods market by value, namely food, beverages, textiles, and packaging. Of the many tangible examples across these sectors, highlights include:

  • Household food waste: An income stream of $2.4 bn could be generated annually in the UK alone for municipalities and investors by collecting household food waste and processing it to generate biogas and return nutrients to agricultural soils
  • Textiles: Revenue of $1,975 per tonne of clothing could be generated in the UK if [collected, remade, and] sold at current prices, comfortably outweighing the cost of $680 required to collect and sort each tonne
  • Packaging: A cost reduction of 20 per cent per hectolitre of beer sold to consumers would be possible across all markets by shifting from disposable to reusable glass bottles, which would lower the cost of packaging, processing, and distribution

These are all very positive numbers.   Here are some more:

Towards the Circular Economy Vol.2: opportunities for the consumer goods sector, a new report, featuring analysis from McKinsey, which builds on last year’s report and makes the case for a faster adoption, quantifies the economic benefits of circular business models, and lays out pathways for action.  The report focuses on fast-moving consumer goods, which currently account for about 60% of total consumer spending, 35% of material inputs into the economy, and 75% of municipal waste. Importantly, the consumer goods sector absorbs more than 90% of our agricultural output – possibly our most embattled resource in the future.

It has become rather fashionable in some circles to decry the Foundation's work; to say, for example, that because it does not wear a social justice heart on its circular economy sleeve, it cannot be somehow doing anything useful in sustainability terms.  The evidence would seem to be pointing to the Foundation's effectiveness despite this.

Others remain puzzled about why they don't focus on ESD, but if you have to ask that question, you'll likely not understand the answer.


1. I should point out that I do pocket the Foundation's occasional shilling, helping them evaluate, and make sense of what they are doing in their work within education.  This is a hugely enjoyable and professionally satisfying venture.

2. They didn't make The Economist's Davos Digest though.

Posted in: Comment, News and Updates


  • (we won't publish this)

Write a response