Putting the Circular Economy into Motion

The circular economy imagines a world without waste in which resources circulate indefinitely, maximising resource efficiency and minimising environmental impact by promoting continuous use, reuse and recycling of materials and products. While the circular economy has the potential to drive sustainability at scale and contribute significantly to turning the tide on the triple planetary crisis1 that humanity is facing today, the transition to circular business models has been slow and not at the expected scale. Currently, the world is estimated to be only 7.2% circular – a decrease from 9.1% over the past five years, due primarily to increasing virgin material extraction.2 Yet there is growing interest in the circular economy among businesses across all sectors that recognise the social, economic and financial benefits of a circular approach. For companies manufacturing consumer-related goods, there is the added pressure of consumer expectations for “green” products. These companies see the tremendous opportunities of the circular economy but also a fundamental challenge: the growth of a circular economy for consumer-related goods depends on the creation of a market shift and demand for secondary sourced materials. Today, this shift is being impeded by many barriers, ranging from regulatory challenges to consumer behaviour. This report looks at the policy and regulatory, technological, infrastructure, financial, organisational and social barriers that companies manufacturing consumer-related goods face when adopting or scaling circular economy approaches and presents actionable avenues for policymakers and businesses to overcome them. Given the key role of international trade in enabling a circular economy, this report concludes with recommendations for actions that can be taken at the World Trade Organization.