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How can we design a circular economy?

An introduction to the role of circular design in creating a more responsible economy.

This newsletter was written by Saskia Tykkyläinen and Christine Nikander for a collaboration between Palsa & Pulk and The E-Waste Column. It has been published in both “The Just Transition Newsletter” and “The E-Waste Newsletter”.


What role does design play in a circular economy?

The circular economy is sometimes described as the economy of “Rs”. It is an economy built on the principles of refusing, rethinking, reducing, reusing, repairing, refurbishing or renovating, remanufacturing, repurposing, recycling, recovering, and regenerating.[i] In a circular economy, there is no waste. Everything is reused and nothing is lost — just like in nature. Notably, the circular economy is not just about recycling, because recycling alone is not enough. Waste can be recycled, but it is better still if it is never even created to begin with — or at least, that significantly less is created.


The design phase defines the characteristics of a product as well as the possibilities of its lifecycle. Waste generation, pollution, and destruction of wildlife for resource extraction do not happen by accident, they are the result of design decisions.[ii] Circular design incorporates considerations for making products that are in line with the principles of the circular economy.[iii] This is done by analyzing the full lifecycle and the end placement of the product already in the design phase, and by designing products to last. In the early design phase, it is crucial to consider the needs behind the designs created and the impacts the design will have during its life. A key question to reflect upon is whether the products and services are solving real problems and generating long-term value for the users, society, and ecosystems. We have already extracted more than a sustainable amount of our natural resources,[iv] and the use of all materials should be very carefully considered.


Circular design extends to considering business models to create customer paths that are not built around linear consumption. One example of a circular business model is offering products as services, or more broadly speaking shifting over to a service-based economy.[v] Many products are, by nature, such that they are only needed very rarely, in which case designing them for a community instead of merely for an individual use case may be more suitable anyway. By designing products, services, business models, and environments in line with circular economy principles, the economy and our surroundings can better support people, the planet, and even businesses.[vi]


Is there a responsibility for companies to design for circularity?

Circular design is a key tool companies can use to act more responsibly. Typically, responsibility on the market is thought to be a shared responsibility between consumers, companies, and governments. The problem however is that consumers and governments seldomly have access to the full information companies have on their production and manufacturing processes. Consumers and governments also do not always possess the specialist expertise needed to understand this information, even if it is made public or is disclosed. Therefore, it is also difficult for consumers and the government to hold companies accountable for the business decisions they make.


The shift to profit maximization and capitalism in design processes has unfortunately created a plurality of issues for both the environment and humans. Notably however, the EU has recently seen a push for bringing responsibility back to companies through a variety of new legislations on supply chains, corporate sustainability, the use of forced labour, circularity, and ecodesign. Without the active participation of companies that are willing to go beyond doing the bare minimum, these laws alone cannot however save the planet or our future.


Our economy needs to shift permanently away from single-use — and even from merely “recyclable” — products over to reusable and long-lasting products. We need companies to champion an economy where products will be used to the very end of their lifespans.[vii] These products could be rented, shared amongst several users simultaneously, or passed from one user to another. 


To show that this type of a new reality is not only possible but that it can also make “good economic sense”, we will be highlighting a few actors who are picking up the responsibility to make the world more circular. The examples we have selected are merely to be seen as illustrative case examples of how companies can innovate and come up with novel solutions to strengthen circularity in their own business operations — and thereby also strengthen the circular economy on the whole. The circular economy concerns all industries, and we have therefore attempted to bring up examples from different fields to highlight the variety amongst recent and new circular innovations.


Can circular solutions protect biodiversity?

Climate change and emissions have often been seen as the focal point for environmental damage. Nowadays, luckily, also the conservation of nature and the protection of biodiversity are seen as urgent and addressed more frequently. Biodiversity refers to the number of species in a community of organisms[viii] — meaning how varied an ecological environment is. Currently, the biodiversity of our living environments is decreasing due to human activities. This, in turn, is creating a risk for human well-being and for our economies. It is also putting environments and other species at risk.[ix]


Advancing circularity in the food and agriculture, construction, textiles, and forestry sectors can slow down or even reverse biodiversity loss. It is estimated that by 2035 circular solutions could allow global biodiversity to recover to levels equivalent to those of 2000.[x] A few examples of regenerating solutions include the Dutch company Corbion who is developing algae-based fish oil substitutes to decrease the need for animal products, the Finnish Parmaco Group who is leasing buildings to avoid land use and need for new building materials, as well as the UK-based Colorfix who is creating natural coloring processes to replace harmful and toxic textile dyes that may leave long-lasting effects in the environment.[xi]


Can circular design reduce material use?

The textile and clothing industry is one example of an industry that has increasingly grown in size and material use. In 2022, the global fiber production was at a record level of 116 million tonnes, having risen from 112 million tonnes in the previous year. Polyester makes up 54% of the global market, whereas natural fibers, cotton, and wool together made up 31% of the market in 2022.[xii]


Natural fibers are engineered by nature to be fully circular and compostable, often also having more durable and less toxic qualities than synthetic fibers. On the other hand, synthetic materials are often cheaper to produce and more stain and water repellent.[xiii] Creating circular loops is possible with synthetic materials too — and in 2022, the recycled textiles’ total market share was 7,9%. However, most of the recycled synthetic fibers were made of PET-bottles, and alarmingly the percentage of recycled textiles in the global fiber market was less than 1% in 2022.[xiv]


There are many players on the market working to advance circularity in textiles. For example, some companies, such as Spinnova and Pure Waste, are increasing the share of recycled textile fibers.[xv] Some companies, such as the Finnish startup Fluff Stuff, are replacing synthetic materials with natural ones.[xvi] Other companies, such as the Swedish Houdini Sportswear, are developing new design processes to replace virgin materials with circular ones and ensuring the recyclability of all materials used in their products after their lifetime.[xvii] Again other companies, such as the Dutch MUD Jeans, are leasing and recycling jeans.[xviii]


There are also a number of startups that use mushrooms as an alternative and biobased material source. A lot of different products can be created from mushrooms instead of plastics or other less sustainable materials.[xix] The startup Ecovative, for example, uses mushrooms to create “everything from an alternative to styrofoam to an alternative for leather and even bacon”.[xx] Similarly, the Dutch design studio StudioMOM has created a bicycle helmet from mycelium and hemp textile called “MyHelmet”.[xxi] Building materials and alternatives to styrofoam can also be created from mycelium.[xxii] As an example, Grown Bio makes diverse packaging and insulation panels from mycelium.[xxiii]


Can circular design reduce end-of-life waste?

Fairphone is a well-known example of a company that has tried to create electronics with smaller adverse environmental and social impacts. There are also a number of startups and scaleups that focus on repairing or “refurbishing” old or broken electronics and selling or leasing these to new users. The Paris-based Back Market, Circular Technologies in the Italian Ligurian Region, the Berlin-based Grover, the London-based Reboxed, the Singapore-based myhalo and Reebelo, the Vienna-based Refurbed, the Finnish Swappie, and the Dutch Valyuu are all examples of this.[xxiv]


New business models and digital solutions are also being developed to provide consumers with better access to circular outcomes. In the textile and fashion fields, repair and rental platforms and services have created new business opportunities. Examples of this include the UK-based Sojo, Rotation bags, and Responsible.[xxv] Similarly, in the electronics sector, the London-based Oodles and the Polish Plenti allow companies and consumers to lease rather than buy technology products.[xxvi] There are also several interesting collaborations happening on the market that advance the shift over to a circular economy. One example of a circular incentive is the secondhand clothing platform Emmy’s attempt to motivate consumers purchasing, for example, eyewear or electronics to sell their used and unneeded clothing by slightly increasing the value of their sold clothes if they opt for a gift card with their partner organizations.[xxvii]


What role does circularity play in corporate responsibility?

In the past, many consumers and businesses have looked to the law to create new rules and to “level the playing field”. The law was expected to define what was considered as fair and ethical. While this thought was not a bad one, it failed to account for many of the shortcomings of legislation and regulations. One bigger issue is that legislation is typically retrospective by nature. Laws often only fix things after they have become an issue or a hazard. Moreover, regulators cannot know everything that businesses know, because they are not on the ground within companies every day. Additionally, “creative compliance” or the circumventing of laws’ intentions frequently also creates issues.


The law is very rarely truly a codification of the highest ambitions of our societies. It should therefore, at its best, be seen as setting out minimum requirements for businesses and different stakeholders. In line with this, companies willing to take on responsibility should not only comply with “the letter of the law” but also with the intentions or “the nature of the law”. If, as a society, we are truly serious about tackling the environmental and social challenges of our time, companies will need to go above and beyond what the law sets out. For companies to be sustainable or responsible, their core business principles need to be circular and innovative. To truly achieve circularity or sustainability, a more profound shift in design and entire business models will be needed – at that soon.


The next newsletter will explore “planet-centered” design and the role of designers in creating a sustainable future. If you want to be notified when it comes out, please subscribe to our mailing list.


About the authors

Saskia Tykkyläinen is a freelance sustainability and strategy consultant at Palsa & Pulk. She studied industrial product design and business management. Saskia has extensive experience working with young growth firms and entrepreneurs in accelerator and education programs. In her consultancy work, Saskia takes on projects that design and build sustainable business practices.

Christine Nikander is the founder of the environmental and social sustainability consultancy, Palsa & Pulk. She studied law at the universities of Columbia (New York), Edinburgh (Scotland), and Leiden (the Netherlands). Christine was a member of the Fall 2021 “Design For Social Innovation” cohort at the Columbia Entrepreneurship Design Studio. She has been writing The E-Waste Column weekly since 2022 and focuses on supply chain governance in her work.


About Palsa & Pulk

Palsa & Pulk is an environmental and social sustainability consultancy. It provides compliance, governance, policy, and strategic advice to its clients. Its work is mostly focused on supply chain governance, the just transition, circular economy, and human rights.


About The E-Waste Column

The E-Waste Column is a weekly column about e-waste, transition minerals, and critical raw materials. It touches on a range of topics including ESG, sustainable development, circular economy, EU law and policymaking, corporate social responsibility, the transition to renewable energy, the EU Green Deal, supply chain due diligence and auditing, human environmental rights, business and human rights, climate law, and corporate sustainability.


Stay up to date

Our weekly column is published on Wednesdays at 12PM CET (The Hague) or 6AM EST (New York) on our website and on LinkedIn. Our monthly newsletter is published here on our blog, on Substack, and on LinkedIn.


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