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ESG fund insights

29 May 2024

Circular Economy, Reuse, & Recycling: A Sustainable Path Forward

By ESGCheck

Circular Economy, Reuse, & Recycling: A Sustainable Path Forward

 

In an era where environmental concerns are at the forefront of global discussions, the concept of a circular economy has emerged as a transformative model. Unlike the traditional linear economy, which follows a 'take-make-dispose' pattern, the circular economy aims to close the loop by promoting reuse, recycling, and sustainable resource management. This article explores the principles of the circular economy, the significance of reuse and recycling, and the benefits they offer to society and the environment.

Understanding the Circular Economy

The circular economy is an economic system designed to minimise waste and make the most of resources. It is grounded in three key principles: designing out waste and pollution, keeping products and materials in use, and regenerating natural systems (ARUP). By shifting towards a circular model, we can reduce our reliance on finite resources, cut down on waste, and create a more sustainable and resilient economy.

One of the fundamental aspects of the circular economy is the emphasis on extending the lifecycle of products. This can be achieved through various strategies, including designing for durability, reparability, and upgradability, as well as promoting business models that support product-as-a-service (PaaS) and sharing economies.

The Role of Reuse

Reuse involves finding new ways to use items that might otherwise be discarded. This can be as simple as repurposing household items or as complex as industrial symbiosis, where the waste of one industry becomes the raw material for another. Reuse not only conserves resources but also reduces the environmental impact associated with the production of new goods.

For example, companies like Patagonia have embraced reuse by offering repair services and second-hand options for their products. By encouraging customers to repair and reuse their items, Patagonia reduces waste and fosters a culture of sustainability.

The Importance of Recycling

Recycling is another critical component of the circular economy. It involves processing used materials into new products, thereby reducing the need for virgin resources and the environmental footprint of production. Effective recycling systems can significantly diminish the volume of waste sent to landfills and reduce greenhouse gas emissions.

The success of recycling depends on various factors, including efficient collection systems, consumer participation, and technological advancements. Countries like Germany and Sweden have set high standards for recycling, with robust systems that ensure a large proportion of waste is recycled rather than incinerated or landfilled.

Benefits of the Circular Economy

Adopting a circular economy offers numerous benefits, including:

  1. Environmental Protection: By reducing waste, lowering emissions, and conserving natural resources, a circular economy helps mitigate environmental degradation and combat climate change.
  2. Economic Growth: Circular economy practices can drive innovation, create new business opportunities, and generate jobs in sectors such as recycling, repair, and remanufacturing.
  3. Resource Efficiency: Efficient use of resources ensures that materials remain in circulation for as long as possible, reducing the pressure on ecosystems and biodiversity.
  4. Social Well-being: Sustainable practices contribute to healthier environments and communities by reducing pollution and promoting responsible consumption.

Challenges and Future Outlook

Despite its many advantages, transitioning to a circular economy poses challenges. These include the need for regulatory support, investment in infrastructure, consumer behaviour change, and overcoming technological barriers. However, with concerted efforts from governments, businesses, and individuals, these obstacles can be addressed.

Innovations in digital technology, such as the Internet of Things (IoT) and blockchain, offer promising solutions for tracking materials, enhancing transparency, and optimising resource use. Moreover, policy frameworks like the European Green Deal are paving the way for a circular future by setting ambitious targets for waste reduction and resource efficiency.

Conclusion

The circular economy, with its focus on reuse and recycling, represents a sustainable path forward. By rethinking how we produce, consume, and dispose of goods, we can create a system that benefits the environment, economy, and society. Embracing circular principles is not just an option but a necessity for a sustainable future. By understanding and adopting the principles of the circular economy, we can ensure that our planet remains vibrant and sustainable for future generations.

 

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Magellan Sustainable Fund

Exclusions Inclusions

Investment Exclusions

TobaccoAlcoholWeaponsFossil fuel exploration, mining and productionGamblingAdult entertainment/pornography

Investment Inclusions

Strategy Equity Long Geography Global
Inception Dec 2020 Investors Retail

Emit Capital Climate Finance Equity Fund

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Investment Exclusions

TobaccoAlcoholWeaponsFossil fuel exploration, mining and productionHuman rights abusesLabour rights violationsEnvironmental damageCompanies that engage in tax avoidance strategiesGamblingAdult entertainment/pornography

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Renewable energy & energy efficiencyClimate action & towards net zeroSustainable water managementCircular economy, reuse & recyclingGreen propertyBiodiversity preservation & conservationHealthy rivers & ocean ecosystemsDiversity & women's empowermentIndigenous business or cultural protectionSocial & community infrastructureSustainable transport
Strategy Equity Long Geography Global
Inception Aug 2022 Investors Wholesale

Magellan Core ESG Fund

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Investment Exclusions

TobaccoAlcoholWeaponsFossil fuel exploration, mining and productionGamblingAdult entertainment/pornography

Investment Inclusions

Strategy Equity Long Geography Global
Inception Dec 2020 Investors Retail

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