Report

The Circular Economy: From Concept to Business Reality

In an ideal world, everything manufactured by people would automatically be either repurposed or reduced to its component parts and recycled for other uses, thus presenting a sustainable, closed loop that wasted no resources. But it’s not a perfect world, and the usual destination for our unwanted goods — especially in the U.S. — is the landfill. Can we turn that situation around?

After more than a century of linear thinking about the path products take from cradle to grave, excitement is growing among environmentalists and business leaders about the revolutionary potential of the circular economy — which fights waste by aiming to extract the maximum value from commercial goods. The recent Wharton conference on the subject, co-sponsored by Dow and Wharton’s Initiative for Global Environmental Leadership (IGEL), brought together pioneers from industry, academia, and non-profit organizations. This report extends the discussion begun at the conference by looking more in depth at the issue.

Turning Waste Streams into Value Streams

Recycling waste salvages just a tiny fraction of a product’s original value. Far more productive uses can be found through remanufacturing, cascading materials through several lifecycles, and developing new business models that move us away from the concept of ownership all together.

Designing for the Circular Economy

Innovative companies are exploring strategies that address end-of-life issues upfront — when a product is being designed. Some are looking to extend the life of products through old-fashioned durable construction, modern modular design, and futuristic repair-before-failure. Others are developing new materials and new types of products tailored to the circular economy.

The Producer Pays

Germany enacted the first countrywide extended producer responsibility (EPR) law in 1991, and much of Europe (and Asia) followed, but there is no national EPR law in the United States. EPR’s profile is rising,  though, even in this country. The concept has gained a foothold at the state and local levels, and some companies are taking voluntary steps in the direction of EPR.

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