July 9, 2014
Jamie Butterworth has worked with the Ellen MacArthur Foundation since the initial launch of the 5-year-old nonprofit, which aims to accelerate a transition toward the circular economy. In November, he plans to leave the foundation to set up a complementary venture tied to the circular economy. We spoke with Butterworth while researching our new trend report, which explores what the circular economy is and how brands are adopting its principles. He discussed why businesses are becoming more interested in this alternative economic model, some companies that are role models in this realm and what’s next for the circular economy.
How would you describe the circular economy in layman’s terms?
I would start by looking at the linear economy. In today’s economy, we tend to take something out of the ground, make that into something, take that something into a market, and at the end of its life, we throw that something away. We use a large quantity of resources to make that happen. We’re beginning to see increasing constraint on energy costs, and the circular economy is effectively a way by which businesses can begin to decouple future economic growth from resource constraints.
What are the social drivers and business incentives for the shift to the circular economy?
We see a number of elements that are causing the shift. The first one is economics. Between 1900 and 2002, we saw a century’s worth of price declines as we got better at extracting and processing materials in the economy and energy. In the decade between 2002 and 2012, however, we saw that century’s worth of savings effectively erased, so we’re beginning to see much more volatile commodity and energy prices.
Secondly, we’re seeing a different type of consumer, who is interested in different ownership and business models. We’ve seen many of these spring up in the last few years, like Airbnb or Zipcar. Others have been around for quite some time, but these are all successful models by which we begin to shift from ownership towards access or performance of products.
The third is, we’re beginning to see some increased legislation around topics such as toxicity levels in different materials or landfill taxes, recycling targets.