Circularity and the just transition

‍Our key takeaway: The linear approach that we’ve adopted to producing goods to meet our needs - which revolves around increased material consumption, pollution, and waste - is not working for people and planet. We have not met the needs of people around the world, who are typically in low-income and less developed countries. We have also transgressed 6 out of 9 planetary boundaries, which are necessary to ensure stable and resilient Earth systems within which humanity can survive. A transition to a circular economy is a solution to meeting our needs within safe levels of planetary boundaries. However, the circular economy transition must be just and people-centric for it to deliver decent work, improve wellbeing, and reduce inequality. As the report states: “People are central to this story: we envision a transition in which no one is left behind, that is safe and just for workers, citizens and consumers.” What can companies do? Companies can: 1) Assess their circular economy practices through a just transition lens to ensure that they do not harm people; 2) Implement holistic strategies that integrate circularity targets with their human rights, environmental and climate targets; and 3) Foster collaboration with other stakeholders to build support for a just transition to a circular economy.

Circle Economy Foundation published The Circularity Gap Report 2024 (February 2024):

• Global circularity is still in decline: While discussions around circularity is increasing and entering the mainstream, circular solutions are rarely implemented in practice: “[T]he vast majority of extracted materials entering the economy are virgin, with the share of secondary materials declining steadily.” In addition, global material consumption is increasing: “[T]he total amount of materials consumed by the global economy continues to rise: in just the past six years alone we have consumed over half a trillion tonnes of materials—nearly as much as the entirety of the 20th century.” This is despite the fact that a circular economy can meet people’s needs and protect the planet: “[T]hrough circular economy solutions, we can meet people’s needs with one-third fewer materials than we use today, reversing the overshoot of five planetary boundaries.”

• A transition to a circular economy must be just and people-centred: The report highlights the link between decent work and wellbeing: “Jobs act as a robust proxy for human wellbeing as it speaks to many dimensions of the human experience: jobs fulfil concrete needs like financial security while also providing a sense of meaning and fulfilment, community and social mobility.” The transition to a circular economy is crucial to providing decent work and improving wellbeing, as well as reducing inequality: “Done right, the circular economy can do more than create jobs and deliver on people’s basic needs—it can elevate job quality and safety and reduce inequalities across entire workforces and, with this, populations.” Moreover, the report highlights the importance of considering the human rights impacts of circular economy solutions: “Ambitious circular strategies, while well-intentioned, may be prone to certain negative effects—implementing plastics bans without integrating measures to protect informal recycling workers can generate unforeseen negative impacts on livelihoods and workers’ ability to provide for their families, for example.”

• What can companies do?: The report recommends that business leaders, in collaboration with other stakeholders: 1) “Place materials at the centre of the story of achieving wellbeing within boundaries.” This can be done by developing and applying holistic indicators that “measure the things that matter to people: from environmental health to social equity, decent work and human wellbeing.” It can also be done by setting mission-oriented targets, such as “[adding] to existing targets for greenhouse gas (GHG) emissions reduction by setting caps on total material use and waste generation that progressively and rapidly decline until sustainable levels are reached”; and 2) “Forge global collaboration for a just transition.” This can be achieved by taking measures to i) “Ensure the circular economy is people-centric”; ii) “Build substantial support and leadership among governments around the world for this social transition to take place”; iii) “Harness policymakers’ creativity to achieve results within a tight timeframe”; iv) “Ensure education addresses the inevitable shift in jobs and skills”; and v) “Ensure that circular, green employment means better employment.”