Date: 2024-12-19 Page is: DBtxt001.php L0500-Ellen-MacArthur-Foundation
UK Based International NGO Ellen MacArthur Foundation
Ellen MacArthur Foundation
Advocating powerfully for the Circular Economy
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Money Makes the World Go Round
A Paper from the Ellen MacArthur Foundation in 2016
The fast-changing global context is our starting point. In a world increasingly dominated by new technologies
and shifts in demographics and the global economy, new challenges arise. One is how to cope with the legacy
of a linear economy, in which products are consumed and largely get turned into waste, diminishing the stock
of non-renewable natural resources. A more circular economy that creates economic value is also an answer to
the resource challenge, both because it is a more effective system that the linear economy and mitigates its risks
whilst creating positive capital-building opportunities.
PART I In the first part of the report we describe the context, provide a systematic framework in which money is one of
the enablers of the transition to a circular economy, and lay out our ambition as a financial sector in contributing
to this transition.
PART II In the second part of the report we focus on three important components of the financial perspective of the
transition to a more circular economy:
- First are the changes we see in business models that accompany circular ways of working. The
report analyses various case studies of circular economy businesses to determine the concrete
financial impacts of going circular.
- Second is a deep dive into the financial considerations of circular economy businesses, covering risks
and opportunities and the detailed consequences for revenue and cost structures, cash flows, balance
sheets and financing requirements.
- Third are the macroeconomic consequences of circular economy business models being more widely
adopted. This extends the assessment of the circular economy approach beyond the commercial
considerations of individual businesses. Macroeconomic analysis is an important consideration for
potential investors deciding where to invest.
PART III In the third [second] part of the report we focus on three important components of the financial perspective of Finally,
we look beyond this report. This first step, to understand the financial implications of circular economy business
models, is only the first the working group will take. The next phase, to assess the impact and consequences for
financial institutions themselves, is crucial: actions speak louder than words.
Money Makes the World Go Round
'http://truevaluemetrics.org/DBpdfs/Circular-Economy/Ellen-MacArthur-Foundation-FinanCE-2016.pdf'
Towards the Circular Economy
A 98 page report from the Ellen-MacArthur-Foundation in 2016
In the face of sharp volatility increases across the global economy and proliferating signs of resource depletion, the call for a new economic model is getting louder. In the quest for a substantial improvement in resource performance across the economy, businesses have started to explore ways to reuse products or their components and restore more of their precious material, energy and labour inputs. The time is right, many argue, to take this concept of a ‘circular economy’ one step further, to analyse its promise for businesses and economies, and to prepare the ground for its adoption.
Towards the Circular Economy
'http://truevaluemetrics.org/DBpdfs/Circular-Economy/Ellen-MacArthur-Foundation-Towards-the-Circular-Economy-vol1.pdf'
TOWARDS A CIRCULAR ECONOMY: BUSINESS RATIONALE FOR AN ACCELERATED TRANSITION
by the Ellen-MacArthur-Foundation
From the introduction:
'A circular economy is one that is restorative and regenerative by design and aims
to keep products, components, and materials at their highest utility and value at all
times, distinguishing between technical and biological cycles. This new economic
model seeks to ultimately decouple global economic development from finite
resource consumption. A circular economy addresses mounting resource-related
challenges for business and economies, and could generate growth, create jobs,
and reduce environmental impacts, including carbon emissions. As the call for a
new economic model based on systems-thinking grows louder, an unprecedented
favourable alignment of technological and social factors today can enable the
transition to a circular economy.
The document is an executive summary of the analysis that the Ellen MacArthur
Foundation has conducted to date.
TOWARDS A CIRCULAR ECONOMY: BUSINESS RATIONALE FOR AN ACCELERATED TRANSITION
'http://truevaluemetrics.org/DBpdfs/Orgs/EllenMacArthurFoundation/Ellen-MacArthur-Foundation-The-Circular-Economy-9-Dec-2015.pdf'
Heading to come
Principle 1: Preserve and enhance natural capital by controlling finite stocks
and balancing renewable resource flows. This starts by dematerialising utility
– delivering utility virtually, whenever optimal. When resources are needed, the
circular system selects them wisely and chooses technologies and processes that
use renewable or better-performing resources, where possible. A circular economy
also enhances natural capital by encouraging flows of nutrients within the system
and creating the conditions for the regeneration of, for example, soil.
Principle 2: Optimise resource yields by circulating products, components, and
materials at the highest utility at all times in both technical and biological cycles.
This means designing for remanufacturing, refurbishing, and recycling to keep
technical components and materials circulating in and contributing to the economy.
Circular systems use tighter, inner loops (e.g. maintenance, rather than recycling)
whenever possible, thereby preserving more embedded energy and other value.
These systems also maximise the number of consecutive cycles and/or the time
spent in each cycle, by extending product life and optimising reuse. Sharing in turn
increases product utilisation. Circular systems also encourage biological nutrients
to re-enter the biosphere safely for decomposition to become valuable feedstock
for a new cycle. In the biological cycle, products are designed by intention to be
consumed or metabolised by the economy and regenerate new resource value. For
biological materials, the essence of value creation lies in the opportunity to extract
additional value from products and materials by cascading them through other
applications. As in any linear system, pursuing yield gains across all these levers is
useful and requires continued system improvements. But unlike a linear system, a
circular one would not compromise effectiveness
Principle 3: Foster system effectiveness by revealing and designing out negative
externalities. This includes reducing damage to systems and areas such as food,
mobility, shelter, education, health, and entertainment, and managing externalities,
such as land use, air, water and noise pollution, and the release of toxic substances.
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