Analysis of Circular Economy: Theories, London, and Recommendations

This report delves into the concept of the circular economy, examining its core theories and principles, with a particular focus on its practical application in London. The report outlines the benefits of circular economy models, which aim to reduce waste, promote resource efficiency, and foster sustai...Read More

Circular Economy

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK1 Circular economies and its theories..........................................................................3
Task2 City in developing commonwealth country.................................................................5
Task 3 ways in which business and government support circular economy:.........................8
Task 4 recommendations for impoving circular economy....................................................9
CONCLUSION..................................................................................................................................11
REFERENCES...................................................................................................................................12

INTRODUCTION
In the given report, there is a growing awareness and the companies are trying to incorporate
circular business models into the present business models. A circular economy helps the
companies to reduce waste and pollution. The report will cover the theories that helps in
emerging circular economy and how London is developing circular economy in their city and
analysis of barriers as well as the factors and opportunities that are responsible for growth. Also
the report will discuss in order to support circular economy what are the measures that are taken
by companies and government.
MAIN BODY
TASK1 Circular economies and its theories.
Circular Economy: A circular economy can be defined as a systematic approach which is
designed in order to benefit business, environment and society with the help of economic
development. This system helps in reducing waste and continual use of resources. This not only
reduce the cost but also helps in reusing, repair, refurbishment and recycling in order to minimise
creation of waste, carbon waste and pollution. In circular economy they use equipment and
infrastructure for a longer duration of time and improves the productivity of the resources. The

circular model aims at building a sustainable society with the help of circular development model
(Breure and et. al., 2018.). The aim of this approach is to make economies and societies able to
become more autonomous and sustainable which can help in the issue of environmental
resources. It aims at promoting green economy by not only reducing waste and ecological
impact but also helps in producing goods and services with the help of sustainable management
of energy resources and raw material. Circular economy helps the society to understand the need
of producing, consuming and designing in a sustainable way. The seven principles of circular
economy are eco-design which helps in improvement of productivity of product, sustainable
procurement, the economy of functionality, extension of lifespan, management of waste and
recycling, responsible consumption, territorial and industrial ecology. In context to London, they
are closely working with London Waste Recycling Board in order to develop a route map for the
transition of London in to circular economy. Some of the theoretical and practical approaches of
circular economy are:
Principles of Input: This approach is basically aims to maintain the flow of renewable
energy resources and makes sure that the stocks are continuously circulating and are not
accumulating with the help of technological processes. They also ensures that there is a
continuous availability of renewable and non-renewable resources of raw material so that the
process and workings of the organisation does not get interrupted. Monitor and regain waste is
expensive as compared to actually waste resources. This approach aims at increasing the
efficiency and effectiveness of the business by reducing waste and reusing products that are
recyclable (Ferronato and et. al., 2019.). It not only increases the productivity of the product as
well as business but also helps in sustainable development of the society. It not only helps the
business but also society and these small steps of businesses will help the future generation to
live a healthy life. Sustainable waste management helps a business to build trust and reputation
among the customers and society which helps the business to grow and make more profit which
is also good for business. The approach makes it easier for businesses to manage their activities
along with waste management and also guide them to make changes according to the policies so
that investment is low and incomes are high. London is trying hard to make it possible for the
companies to develop a strategy so that the companies can effectively and efficiently make it a
habit of waste management.

The principle of sustainable cycle: This approach aims at the production to
continuously function and make sure that all the resources are available in the business. In linear
system, if the essential resources necessary for production are not available then the economy
will be enable to grow or develop and this also restricts the companies to grow and develop. But
in circular economy the system makes sure that all the resources are available at the highest
possible level and the production function will not be disrupted in any case and the solutions
offered by circular economy gives the directions to the company for further development. This
makes sure that all the resources are available in the organisation and the company is not
suffering from the deficiency of resources which makes the future tasks of the companies
difficult. This approach requires the company to incorporate circular design in early stages of the
production function so that the energy function throughout the product life cycle is reduced.
Waste free designs principles include reuse, recycle, re-manufacturing and refurbishment if
applied at this level. The essence of sustainable cycle lies in the design of services or products.
The principle of output: The increase in efficiency system can be achieved through
proper planning and by doing effective analysis of the process, by developing a circular plan and
leaving a space for further changes in that plan can enables the company to avoid any loopholes
in the design and will help them to find the perfect mix of design specially perfect for the
organisation. This can include water and noise pollution reduction, maintaining good health,
planned use of land and avoiding improper business practices. In the recent years the principles
of circular design have develop mostly in the direction of sustainability (Gherghel and et. al.,
2019.). With the help of development of organisational innovation and technological system the
business innovation cannot solve the problem of economic problems and environmental
problems but by using efficient allocation of existing resources in the production function the
company can solve the problem of economic and environment. New equipment and devices are
developed for the production function which enables the company to reduce the pollution
occurred through the production function. With the connection of these devices and equipment
the company can reduce the pollution at system level. If the production function of an
organisation reduces the emission of pollution than the production cycle will be termed as
sustainable.

Task2 City in developing commonwealth country.
Examples of how circular economy is developing in London: In context to circular
development the country states that the circular economy will hugely affect the positive
environmental impact and will have the potential to prevent more than 60% of waste of London.
The government of London states that their economy is based on take, make and dispose model
but the growing knowledge and realisation of people and businesses toward sustainability create
an urgent need of development of new ways so that the materials can be use for longer duration
of time and to minimise the negative impact of pollution and production on environment
(Niinimäki, K., 2017.). A major part of the consumers believe that society should be more
efficient in terms of resources. The UK's market has grew by more than 40 billion euros between
2008 to 2018 in terms of ethical and socially responsible products and services.
Barriers to circular economy.
Creation of waste because of government regulations: Sometimes the rules and laws
unintentionally increase the waste and mostly these problems are faced by food and beverages
companies as they need to follow the most guidelines of government. It is often required by the
law to label the expiration date on any food material in a store but actually those food materials
when stored in refrigerators can last longer than their expiration date which means that the food
items that are getting wasted in the stores because of the expiration date are actually edible and
can be used.
Lack of proper infrastructure: About one-third of the waste is not collected and will
not reach the waste management system and ends up in rivers, oceans and lands. It is estimated
that by 2050 there will be more plastic in ocean than fishes which will not only harmful for water
species but also will be very problematic for humans (Sanchez, B. and Haas, C., 2018.). This is
generally a major problem in developing cities because they lack a proper waste management
system. It is proven that mostly half of the plastic came from China, Indonesia, Philippines,
Vietnam or Thailand. These countries need to develop their waste management infrastructure as
soon as possible.
Lack of updated recycling technologies: Only 2 % of the waste is converted into actual
product of the same or similar quality in which it was created before. Most of the recycled plastic
are shredded and reproduced in a lower value products. This is largely due to the limitations of
the technologies. There is a need of technology that can maintain the quality and purity of the

recycled plastic so that the manufacturers can use that recycled plastic for their new products and
the plastic can match the standards of the quality products. Once an upgraded technology is
created then the economic value of plastics can be recaptured and their recovery and recycling
can be increased.
Wrong business model in use: Thanks to the rapid growth of industrialisation a lot more
people are getting strong purchasing power and the lower income class people are continuously
moving towards the middle income class group. Because of the developing economies like
China, India and Brazil the rate of potential customers are continuously increasing. But the
companies need to think about the business model that suits the continuously increasing markets
and also make sure that they are recycling and managing their waste in order to minimise the
negative impact of waste produced by them on environment.
Progress of circular economy in London
Apart from the small progress such as remanufactured furniture, circular and reclaimed flooring
solutions, innovative circular products along with refurbished IT are some of the examples of
circular economy in offices but London is on way of making big changes in order to promote
circular economy. Some of the projects that help to accelerate the circular economy of London
are:
Olympic park of Queen Elizabeth: The London Legacy Development Corporation
which is primarily responsible for the implementation of circular economy is the organisation
behind the idea and making of this Queen Elizabeth Olympic Park, which is free for the visitors
every day of the week (Škrinjarić, T., 2020.). Its home for London Stadium, the London
Aquatics centre, the copper box arena, The Lee valley velopark, Lee valley hockey and tennis
centre, etc. The London Legacy Development Corporation continues to share knowledge and
lessons that is learned by the London 2012 construction project in order to raise the bar with in
the construction sector so that the sustainability in the social and environmental benefit of future
project.
Mercato Metropolitano: This is the first city of London to incorporate sustainable
community market that is completely focussed on improving neighbourhood and protecting the
environment. The market has incubated over 50 business related to food and beverages which are
sustainably sourcing products from local artisans and farmers which are also helping the locals in
improving their incomes and are enhancing the concept of circular economy. Some of the

famous circular economy concepts are vertical garden in double decker bus, mushroom garden
from spent coffee ground, Bavarian micro-brewery and hydroponics farm. Mercato
Metropolitano attracts more than 60000 people every week and is launched in 2016. The main
aim of this project is to spread awareness about the benefits of circular economy as they are
supporting their local and rural communities and also focussing on what they eat and how they
eat along with protecting their environment.
Sustainable workplaces: It provides sustainable workspaces bankside and is a co-
working facility which was established by sustainable ventures back in 2018. The aim of this
project is to provide a collaborative and flexible community which is also affordable for the
entrepreneurs to partners with government, investors, NGO’s that are fully focussed on
sustainable development. It is comprises of more than 30 people and more than 50 sustainable
start-ups and businesses (Wang and et. al., 2018). It is the largest collective of sustainable
enterprises in London. This not only promotes sustainability but also a big step towards circular
economy. By looking at the benefits of this economy more and more people will join in order to
take benefit of it.
Task 3 ways in which business and government support circular economy:
Government has a significance role in promoting circular economy by performing actions
that can help the people and businesses to understand the benefit of circular economy and make
them include this economy so that the society can have benefit of sustainability. Some of the
ways in which the government can support circular economy are given below:
Ambitious public policy: When government set a commitment towards the public policy
which can make the positive impact on the society as well as environment and shift the stage
towards the collective thinking about waste, resources and sustainability and government helps
the businesses to invent or innovate new techniques so that the solutions can be achieved in order
to make circular economy.
Long term contracts for processing: The government is contracting with municipal
corporations for the purpose of processing recyclables collected from the household, agencies
and institutions of London city (Hanumante and et. al., 2019.)
. While this tactic is not feasible for every situation but the motive behind this policy is that the
government wanted to make sure that the municipalities can bring vitality by recycling and

recovering waste which not only brings financial stability in the market but also will stabilize the
fluctuations in commodities prices as well as market volatility.
Businesses also has a significance role in maintaining circular economy and providing
sustainability to the society as well as environment. A big part of plastics came from the
businesses and also a big part of recycled material can be used by businesses. So in order to
support circular economy, the businesses plays a major role. Some of the ways in which the
businesses can promote circular economy are given below:
By practising more closed-loop recycling: There are mainly two types of recycling,
first is closed loop and second is open loop. Closed loop involves recycling of material whose
quality will not be affected even after recycling and those materials can be recycled numerous of
time without any issue.some of the examples of materials that are recyclable in closed loops are
aluminium, glass, steel, etc. These materials can be recycled continuously (Hidalgo and et. al.,
2019.). The second type of recycling are open loop which involves that with every cycle of
recycling the quality of the material recycled will downgrade or materials that can only be
recycled once or twice and will be of no use after that. The major example of this material is
paper which can only be recycled once and after that the quality of the material will be
downgraded. The business must try to practise closed loop holes so that more and more material
can be recycled and lesser waste will be produced in the environment.
Rent instead of selling: No matter how good the recycling is but is not enough.
Ultimately the businesses needs to depend on the end user to get their product back so that the
businesses can recycle it (Munaro and et. al., 2020.). It depends on the end user that they wants
their unwanted goods to be recycled. In this case the businesses can rent their goods to the
customer so that they can get their products back and recycle them.
Task 4 recommendations for impoving circular economy.
The importance of raw material is growing with the growing population of the world
(Parchomenko and et. al., 2019.). The more people are engaging in the activities of business and
more and more people are having the purchasing power which in turns increasing the demand of
the goods and services which is a major factor that influences the people to engage in circular
economy. It is not new for anyone that the supply of raw material is limited and their is need to
use material effectively and efficiently otherwise their will be no material for businesses to use
(Simon, B., 2019.). Their is major need for people to use circular economy so that more and

more resources can get recycled and people can reuse them which not only will save resources
but also helps the companies to save cost of production because of recycled products.
Recommendation
Design to reuse: The companies and governments must make sure that packaging and
products they are making is reusable and is not of one time use. When the companies makes
goods and products that are reusable then the general people purchasing the product can use the
product without any hassle.
Use of bio-plastic instead of plastic: The use of fossil fuel based plastic is much more
harmful for the environment then bio-plastic which means that if people and businesses use bio-
plastic then they can avoid the harm that the plastic is making in the environment and it will also
reduce the carbon footprint.

CONCLUSION
In the given report is is concluded that what are the measures that are in the ways to establish a
circular economy in the city of London which will make the city more sustainable and create
positive impact on the environment as well as society. The report has analyzed the barriers that
can come in front of businesses in order to maintain circular economy as well as opportunities
that can be helpful for the businesses to develop and implement circular economy. Circular
economy is beneficial for both government and business and this report it is analyzed that in
what ways government and businesses can support the implementation of circular economy.

REFERENCES
Books and journal
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Centobelli and et. al., 2020. Designing business models in circular economy: A systematic
literature review and research agenda. Business Strategy and the Environment, 29(4),
pp.1734-1749.
de Sousa Jabbour and et. al., 2019. Circular economy business models and operations
management. Journal of cleaner production, 235, pp.1525-1539.
Ferronato and et. al., 2019. Introduction of the circular economy within developing regions: A
comparative analysis of advantages and opportunities for waste valorization. Journal of
environmental management, 230, pp.366-378.
Gherghel and et. al., 2019. A review on wastewater sludge valorisation and its challenges in the
context of circular economy. Journal of cleaner production, 228, pp.244-263.
Niinimäki, K., 2017. Fashion in a circular economy. In Sustainability in fashion (pp. 151-169). Palgrave Macmil
Sanchez, B. and Haas, C., 2018. Capital project planning for a circular economy. Construction
Management and Economics, 36(6), pp.303-312.
Škrinjarić, T., 2020. Empirical assessment of the circular economy of selected European
countries. Journal of Cleaner Production, 255, p.120246.
Wang and et. al., 2018. Evaluation of Urban circular economy development: An empirical
research of 40 cities in China. Journal of Cleaner Production, 180, pp.876-887.
Hanumante and et. al., 2019. Assessment of circular economy for global sustainability using an
integrated model. Resources, conservation and recycling, 151, p.104460.
Hidalgo and et. al., 2019. A multi-waste management concept as a basis towards a circular
economy model. Renewable and Sustainable Energy Reviews, 111, pp.481-489.
Munaro and et. al., 2020. Towards circular and more sustainable buildings: A systematic
literature review on the circular economy in the built environment. Journal of Cleaner
Production, 260, p.121134.
Parchomenko and et. al., 2019. Measuring the circular economy-A Multiple Correspondence
Analysis of 63 metrics. Journal of cleaner production, 210, pp.200-216.
Simon, B., 2019. What are the most significant aspects of supporting the circular economy in the
plastic industry?. resources, Conservation and Recycling, 141, pp.299-300.