Preserve and Enhance Natural Capital: World Environment Day

June 2, 2017 Lucie Frideling

Preserve and Enhance Natural Capital: World Environment Day

World Environment Day is the biggest annual event for positive ecological action. The theme this year is “connect with nature,” imploring the global community to “get outdoors and into nature, to appreciate its beauty and its importance, and to take forward the call to protect the Earth that we share.”

Fittingly, that last appeal is directly in line with a growing trend in the sustainability field — developing a circular economy. That’s because the core principle of this new economic model is to “preserve and enhance natural capital.”

What Is a Circular Economy?

The transition from a linear to a circular economy is an essential part of sustainable development. A circular economy is centered on producing goods and services in a sustainable way, limiting the consumption and waste of resources (raw materials, water, energy), as well as the production of waste. It allows companies to use natural capital efficiently and reduce system risks by managing finite stocks and renewable flows.

In practical terms, circularity should help detach gross domestic product (GDP) growth from resource intensity. Reusing and recycling more, repairing and retrofitting, and developing closed loops in different areas of production increases financial security and competitiveness.

CE Graph

From the Ellen MacArthur Foundation

Why Do We Need a Circular Economy?

Environmental crisis: Long-term linear development has caused a lot of negative environmental impacts, such as depletion of natural resources, biodiversity loss, land degradation, ocean pollution and climate change.

Demand to reduce economic losses and waste: The linear model creates a lot of waste and inefficiencies. The cost of the materials used in the fast-moving consumer goods industry per year is USD $3.2 trillion. Eighty percent of these materials end up in a landfill or an incinerator. That’s USD $2.7 trillion of value wasted. The average European office, for instance, is used only 35-50 percent of the time, even during working hours.

Supply risks: Linear systems increase exposure of companies and countries to limited or disruptive supply, and volatility of supply prices.

Demand for alternative business models: Consumers are embracing models that enable them to access the services that products provide rather than owning them. (The success of BlaBlaCar and Airbnb are a great example.)

Regulatory and reputation risks: The European Union (EU) and other regions are coming up with various policies and laws that put obligations on implementing circular economy principles. That will put a price on waste and emissions, and urge recycling.

An Action Plan for a Circular Economy

The European Commission has adopted an ambitious Circular Economy Package to help European businesses and consumers make the transition to a sustainable development model. It includes variety of measures, including a common EU target for recycling municipal waste and packaging, a binding target on reducing landfill waste, policies to incentivize producers to put greener products on the market, as well as recovery support and recycling schemes.

Business towers and Green leavesThese principles have already been incorporated into national regulations in some countries. In France, for example, the concept of circular economy officially entered French law on Aug. 18, 2015. Green growth as a national strategy has led to ambitious targets, such as a 30 percent increase in the ratio between GDP and domestic materials consumption by 2030, and mandatory greenhouse gas reporting for certain companies, including Scope 3 emissions.

Leading companies across the world such as Apple, Coca Cola, Unilever, Novelis are also members of the Ellen Macarthur Foundation’s CE100 program — a platform to accelerate the transition to a circular economy. Schneider Electric is also a member of the CE100, contributing to the initiative via a variety of projects, including co-developed e-learning courses, collaborative projects and research such as “Scaling Recycled Plastics Across Industries”.

To bring it full circle, these actions are significant, but just a start. The proven limitations of a linear approach requires the wide-scale move to a circular economy to ensure there are many more World Environment Day(s) to come.

Connect with the Foundation for more circular economy information. And contact us to discuss how to implement this model to help reduce waste and improve business outcomes.

Contributed by Irina Gilfanova, Sustainability Consultant for Schneider Electric


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