Decent work in the circular economy (Circle Economy, ILO, and Solutions for Youth Employment)

Anna Triponel

May 19, 2023
Our key takeaway: We can meet people’s needs with only 70% of the resources we use today and keep global warming below 2°C according to Circle Economy. But what is the reality? Are we producing and consuming within planetary boundaries i.e., that does not threaten the safety and functioning of the planet? We are not: 70% more virgin materials were extracted between COP25 in 2015 and COP26 in 2021. Global warming has reached 1.1°C since the pre-industrial era. We have already exceeded multiple planetary boundaries. The circular economy presents a model that allows us to live within planetary boundaries in a way that does not drive or exacerbate environmental harms. However, the pursuit of transitioning from a linear to a circular economy should not come at the expense of people and their wellbeing. As the report highlights, “[w]e should be cautious not to conflate jobs that are ‘good for the environment’ with ‘good for workers.’” Rather, “circular economy interventions will not support social equity by default.” So what can the private sector do? 1) Think about integrating and prioritising social considerations in circular economy transition plans. 2) Channel resources into industry-wide research which looks at the gaps in existing research when it comes to looking at underrepresented groups such as migrant and informal workers in the circular economy. 3) Work with local stakeholders to develop and analyse circular economy policies and plans. 4) Collaborate with partners to collect and analyse data that considers key circular actors and activities currently omitted from databases. All this is to say that a circular economy can and should advance a just transition and vice versa. Workers are instrumental to the circular economy transition, and they must be brought along in a way that realises their human right to decent work.

Circle Economy, the International Labour Organization (ILO), and Solutions for Youth Employment published Decent work in the circular economy: An overview of the existing evidence base (May 2023):

  • Why the circular economy is crucial to advancing the just transition, including the decent work agenda: The report argues for “[t]he need of a socially just circular economy.” But what does this actually mean? The Ellen McArthur Foundation defines the circular economy as a “system solution framework that looks beyond the current economy and its linear process of taking materials from the Earth”, which is underpinned by the following principles: “Eliminate waste and pollution”; “Circulate products and materials”; and “Regenerate nature.” It is essentially living within our planetary means. In its current conception, design and implementation, however, the circular economy does not create decent work for all: “[M]any early-stage circular interventions like waste collection, sorting and recycling in the Global South are often described as low-quality and demanding”, and “these jobs are labour-intensive in nature, and some are conducted in conditions that can expose workers to hazardous working environments— exposure to toxic materials, little to no social protection, and a lack of stable or living wages.” The circular economy also does not create benefits for all, with the Global South generally having limited access to its products and services: “[M]any new circular business models and strategies rely on extensive technology and data infrastructure, thereby potentially limiting the equitable access and availability of circular products and services for people around the world.” On a more positive note, however, the circular economy can provide opportunities for decent work and support a just transition provided it is: “implemented within various socioeconomic frameworks and meet ambitious and wide-ranging development objectives, such as improved industrial competitiveness to promoting social inclusion and ensuring sustainable livelihoods.” In short, the circular economy can advance the just transition to a zero-carbon economy provided it puts people at the centre of its design and implementation, and ensure equal access to its services, products and benefits.
  • Key opportunities and challenges to create a “socially just circular economy”: The report sets out five key themes that represent these challenges and/or opportunities: 1) “Labour market and sectoral transformation.” The circular economy creates millions of jobs and employment opportunities in, for example, recycling and reprocessing; 2) “Informality and the circular economy.” Existing research and the Global North’s circular economy agenda do not consider the scope and type of informal work that is being carried out by low-income workers in the Global South. It should also be noted that informal employment in the circular economy is also present in the Global North: “Migrants with irregular employment status or socially disadvantaged workers often work in high-income countries’ waste management and recycling sectors”, which have been exacerbated by multiple crises such as economic recessions and the changing nature of work; 3) “Work reallocation and skills development.” The transition from a linear to a circular economy creates different types of work for new and existing workers provided trainings to develop new skills and to re-skill are available; 4) “Working conditions and social protection.” The World Health Organization (WHO) has highlighted the health and safety risks of managing waste and exposure to hazardous substances, which disproportionately affects vulnerable groups such as children and impoverished families, and may include “marginalisation, exploitation, abuse, child labour, and reduced community health due to picking from dumpsites and working without any personal protective equipment.”; 5) “Gender discrimination and social equity.” The circular economy increases female employment on a global scale, however, there is little data on how underrepresented actors, such as migrant workers, are contributing to the circular economy.
  • Calls to action to realise a just transition to a circular economy: The report highlights three key recommendations on how the private sector, governments and rights holders can realise a just transition to a circular economy (emphasis added): 1) “More in-depth and inclusive research on decent work and the circular economy”, which includes: “More research on the impact of the circular economy on key actors and marginalised groups and ensure their inclusion in the development and implementation of circular interventions”; “More localised, city-level, quantitative studies on the potential shortcomings and opportunities of circular economy interventions”; “Review and adjust the current circular economy modelling methods, including assumptions and policy scenarios”; “Create globally relevant indicators of employment and decent work in the circular economy.”; 2) “Global and social justice-led research and policy”, which includes: “Collection and dissemination of circular economy best practices across value chains in countries and regions in the Global South”; “Study existing and upcoming policy measures, making sure they include social requirements and the participation of affected workers in key policy dialogues such as trade and economic cooperation agreements, EPR schemes, European Corporate Sustainability Reporting Directive.”; and 3) “Joint advocacy and data partnerships”, which includes: “Develop partnerships with social and localised circular economy stakeholders to co-formulate and evaluate circular economy policies.”; and "Create partnerships for data collection and analysis, revise international and national industrial classifications and find solutions to the omission of key circular actors/activities in current databases.”

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