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What is a Circular Economy and How Does It Contribute to Sustainability?

tree canopy for sustainability

As human beings, we tend to think of waste as an inevitable by-product of doing business and living our lives on planet Earth. Not so in a circular economy…

What is the circular economy?

A circular economy is an economy in which there is no waste.

Traditional economies are linear, with materials taken from the Earth, made into products, and those products eventually thrown away.

In a circular economy, the concept of waste is cut out of the picture, where materials can be re-used again and again in a continuous cycle.

In this way, circular economies place less strain on people and planet, making them more sustainable than their linear equivalents.

Understanding the Circular Economy Definition and its Importance:

Faced with climate crisis and widespread loss of biodiversity, it is becoming apparent that waste is not a necessary evil but comes about as the result of choices we make, in our personal lives and within our business.

It is our aim to encourage society to move towards more sustainable options within their lifestyle choices for the sake of our environment, and businesses have a huge influence on people’s behaviour.

We can design it out of the system. But we just need to learn how.

That’s where the circular economy comes in.

A circular economy is based on three principles that are woven throughout the design of products. These are:

  • Eliminating waste and pollution;
  • Circulating products and materials at their highest value; and
  • Regenerating nature.

Eliminating waste and pollution

Even in 2022, many of the products on the market have no onward path to prevent them from being sent to a landfill or for incineration after use. They cannot be reused, recycled, or composted, and are effectively designed to be disposable.

By treating waste as a design flaw, the circular economy requires materials to re-enter the economy at the end of their use, either by being maintained, shared, reused, repaired, refurbished, remanufactured or – as a last resort – being recycled. Organic material can be turned into valuable nutrients through biological processes like composting and anaerobic digestion and used to help regenerate the land to grow more food or renewable materials like cotton and wood.

Circulating products and materials at their highest value

Keeping materials in use – either as a product or, when that can no longer be used, as components or raw materials – ensures finite materials are kept in the economy and out of the environment, as well as retaining the value of products and the materials they are made from.

The most effective way of retaining the value of products is to keep them whole. This might involve granting users access to a product rather than them owning it, reuse through resale, or cycles of maintenance, repair, and refurbishment.

When a product itself can no longer be used, its components can be remanufactured or broken down into their constituent materials and recycled.

Circular products are designed with these processes in mind and made from materials that are easy to separate. For example, wooden furniture that is easy to maintain and repair, easy to take apart, made from modular components that can be replaced, and uses biodegradable glues and paints.

Find out more about circular design.

Regenerating nature

A circular economy goes beyond simply focusing on doing less harm to the environment, but instead takes action to actively improve it.

Shifting the focus from extraction of raw materials to reuse and regeneration supports the Earth’s natural processes and leaves more room for nature to thrive.

Returning biological materials to the earth rebuilds healthy soils that absorb rather than release carbon and are better able to absorb and hold water, reducing the risk of flooding and the impact of droughts. Crops can grow without the use of pesticides and synthetic fertilisers and using less water and fossil fuels.

Fewer synthetic inputs significantly reduces greenhouse gas emissions and allows pollinators and microbes in the soil to thrive which, along with regenerative food production practices such as agroforestry (growing trees around or among crops or pasture), agroecology (restoring control of food chains to local producer communities) and conservation agriculture helps to restore natural ecosystems and increases biodiversity.

What’s more, by keeping products and materials in use, less land is required for the sourcing and growing of virgin raw materials, meaning more can be returned to nature through rewilding.

“There is no waste in nature. When a leaf falls from a tree it feeds the forest. For billions of years, natural systems have regenerated themselves. Waste is a human invention.”

Why is a circular economy important?

Circular economies are good for business, people, and the environment. They are resilient, thanks to their focus on transitioning to renewable energy and materials rather than relying on the consumption of finite resources. They also support local producer communities, helping to address social inequalities and build a better global society.

“The circular economy gives us the tools to tackle climate change and biodiversity loss together, while addressing important social needs. It gives us the power to grow prosperity, jobs, and resilience while cutting greenhouse gas emissions, waste and pollution.”

How can businesses support a circular economy?

In a circular economy, everyone works together to benefit each other and the planet. Designing out our current take-make-waste system requires the input of businesses, governments, regulators, charities, innovators, thought leaders and individual citizens to address the key questions: ‘How do we manage resources?’ ‘How do we make and use products?’ and ‘What do we do with the materials afterwards?’

As the proverb goes: the longest journey starts with a single step. In this case, that is the desire to change.

If we all want change to happen, and are willing to work together to achieve it, we can make the planet a better place to live, where everyone can thrive.

Discover how to join the circular economy: Free resources from the Ellen MacArthur Foundation.

PALLITE®’s sustainable packaging materials, pallets, layer pads, shipping crates, custom protective inserts, void fill, and our warehouse storage solutions including the PIX® and PIX® SLOTS shelving and storage bins are made from recycled paper and biodegradable PVA glue. Sustainable choices for businesses working towards a circular economy. To find out more about how our packaging solutions and any of our products, give us a call.



1. What is the concept of a circular economy and how does it relate to warehouse storage solutions? A circular economy is an economic system designed to minimise waste, maximise resource use, and promote sustainability by maintaining products, components, and materials in a continuous cycle of use, recycling, and repurposing.
2. What are the key principles and goals of a circular economy? Key principles include designing out waste and pollution, keeping products and materials in use, and regenerating natural systems. Goals are to reduce resource consumption, minimise environmental impact, and create economic value from waste.
3. How can businesses integrate circular economy principles into their warehouse storage practices? Businesses can integrate circular economy principles by adopting reusable packaging, implementing recycling programs, promoting product lifecycle extension through repair and refurbishment, and utilising remanufactured or recycled materials in storage solutions.
4. What are the benefits and advantages of adopting a circular economy approach in warehouse storage? Benefits include reduced waste generation, lower material costs, improved resource efficiency, enhanced environmental performance, increased resilience to supply chain disruptions, and potential new revenue streams from recycling and repurposing.
5. Can you provide examples of businesses that have embraced circular economy principles in their warehouse storage operations and the positive outcomes they have experienced? Examples include companies like H&M and Philips, which have implemented circular economy strategies in their supply chains, resulting in reduced waste, increased resource efficiency, and enhanced sustainability performance.

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