Equating circularity with narrowing and slowing lets virtually all businesses join the bandwagon.
The correct definition of phenomena is essential not only for the development of knowledge but also for the impact and utility of concepts in the real world. Indeed, such precision may be one of the premises of our ability to tackle the climate crisis.
Take the ‘circular’ in circular economy. Implementing change based on an incoherent and imprecise conceptualisation of circularity could bring inertia, through diluting yet another sustainability concept. There are huge risks if it becomes impossible to assess whether businesses’ societal and environmental ambitions really bring about fair, equitable and sustainable transformations.
‘Circular washing’
The obvious risk is of ‘circular washing’, the self-proclaimed labelling of businesses as circular, or committed to circularity, without fulfilling basic transformational criteria. Circular washing allows linear business models to relabel themselves as circular at virtually no cost for them, but at a continued cost to the environment.
For example, the nuclear-waste industry declares itself part of the circular economy, which is a stretch. Fast-fashion corporations such as H&M claim commitment to circularity while most of their revenue is still generated through linear material flows, including practices devastating for the environment. And beverage companies such as Coca Cola use packaging with some recycled as well as virgin polyethylene terephthalate (PET) but remain essentially linear producers whose products are among the most polluting in the world.
Circular washing blunts the critical edge of circularity and replaces it with non-demanding options. Particularly problematic is that researchers and industry representatives alike often define circularity by referring to three different ways of creating circular value: slowing, closing and narrowing.
Logical error
Building definitions of circularity on slowing and narrowing is a logical error: narrowing has been the rule of material efficacy since the industrial revolution. Producing thinner planks, steel plates, fibres or plastic bags—to have cheaper furniture, clothes, planes and cars, while using less material—is a basic principle of linearity. Narrowing is in no way specific to circularity: if one thins a broad line, it nevertheless remains a line.
Similarly, slowing is about speed, not trajectory. And circularity is a trajectory.
Narrowing or slowing circular loops can probably be a good idea, to make already closed loops more sustainable. They could therefore function as important add-ons to circularity, along with others such as virtuality and switching to bio-based alternatives. But whether they contribute to reducing environmental footprints and increasing fairness has to be determined case-by-case—they do not in themselves entail a closed loop.
Indeed, with narrowing and slowing, virtually everyone can join the circular bandwagon:
- narrowing lets most of the linear economy be redefined as circular provided that it aims at resource efficiency—packaging, for instance, become circular if only it uses less material resources than earlier generations of packaging;
- slowing lets all of the ‘slow’ alternatives—slow food, slow tourism and so on—also join the circular economy, but spending a month somewhere as a tourist instead of a week will not make the stay circular.
Closed material loops
Circularity should be clearly defined as meaning closed material loops: there must first be a circle before something is classified as circular. A vague definition risks confusing customers, employees and others interested in meaningful change or allowing them to think they are contributing to environmentally friendly action when they are not.
Permitting corporations to deliver circular credits to themselves would accord legitimacy to the view that they are fully equipped to handle sustainability on their own, without the ‘interference’ of regulators or environmental movements. Such a diluted understanding of the circular economy would delay essential changes in production, distribution, consumption and waste management.
To maintain its transformational potential, the circular economy needs to be associated with an actual closing of material loops, recognising that this entails a new balance of power among corporations, customers and those who work with material recovery—not least waste pickers in the global south. The environmental footprint of production and consumption must be reduced, through decreased extraction of virgin materials, lower production of new units and efficient recycling and reuse practices.
Will to regulate
Actions on the European Union and national levels—in terms of regulation and its implementation, follow-up and punitive sanctions for non-compliance—can address directly this latest form of ‘greenwashing’. In January, the EU Corporate Sustainability Reporting Directive entered into force, with new European Sustainability Reporting Standards requiring companies to report comparable qualitative information on how they affect people, the environment and the climate. The standards will be applicable starting from 2025, reporting on year 2024, and successively, depending on the size and type of company.
In March, the Europen Commission presented a proposal for a directive on the substantiation and communication of explicit environmental claims. This aims to protect consumers and empower them to contribute actively to the green transition. The proposed directive would provide the framework necessary to hold companies to account for deceptive or false environmental claims. How national governments embrace such a directive, if agreed, would however be critical.
There needs to be a willingness to regulate for the circular economy if we are to see any meaningful change. If industry were to remain free to define its own terms, the concept would be greatly devalued.
Maira Babri is senior lecturer in business administration at Örebro University in Sweden, with an interest in research and collaboration for an inclusive, equitable and fair circular economy.
Hervé Corvellec is a professor in business administration at Lund University, with a research interest in waste and the circular economy.
Herman Stål is an associate professor / senior lecturer in business administration at the School of Business, Economics and Statistics of Umeå University in Sweden. He teaches and does research on innovation and organisation relating to the circular economy and climate change.