Closing the circularity gap: A route to net-zero and long-term economic prosperity

Every year the global economy consumes resources faster than the Earth can replenish them, and growth in material extraction has more than tripled globally since 1970 to 100 billion tonnes a year. Only 7.2% of resources make their way back into the economy through reuse or recycling, leaving a global circularity gap of 92.8%. This means that the vast majority of materials are either wasted, lost or remain unavailable for reuse.

This is placing unsustainable pressure on the earth’s ecosystems – and material use and carbon emissions are inextricably linked. The extraction and processing of materials alone account for approximately half of global GHG emissions.

At the same time, waste generation is increasing rapidly. Global waste is estimated to generate between 2.5 and 3.3 billion tonnes by 2050. At current rates, this will produce approximately 33 to 34 billion tonnes of carbon dioxide warming equivalent emissions between 2020 and 2050. Closing the circularity gap and reducing material consumption are therefore critical to tackling the climate, biodiversity and pollution crises.

Despite the circularity gap remaining so substantial, the shift towards greater circularity is becoming inexorable. Businesses will continue to face increasing pressure from consumers and investors to become more sustainable. Regulation is the other major driving force behind the push towards more circularity and businesses are having to prepare for a wave of upcoming regulation.

At Reconomy, we exist to make it simpler for businesses to adopt circular economy practices, make better use of their materials, minimise waste, close circularity gaps and decouple growth from resource use. We believe that by doing more with less, companies can become more profitable, reduce exposure to rising material costs, lower their environmental impact and comply with regulatory requirements.

Data is becoming an increasingly powerful tool for businesses to demonstrate progress towards their sustainability goals and meet evolving regulatory requirements. Data can also show businesses that by making small tweaks to the content of their products they can reduce costs under the Extended Producer Responsibility scheme and also lower their carbon emissions.

While the transition won’t be without its challenges, closing the circularity gap offers a path to long-term growth and economic prosperity and an opportunity to push back the Earth Overshoot Day – the point at which global resource consumption exceeds Earth’s ability to regenerate those resources.