What is a Circular Economy?
We need materials for business and life. And today, we consume a lot. Enormous amounts of time, money, labor and energy are spent extracting virgin materials to create products that ultimately just get thrown away. That take-make-waste cycle (or a linear economy) squanders investment, takes a heavy toll on the environment, and exploits communities here and abroad.
A circular economy offers a blueprint for reducing our reliance on new materials and landfilling by keeping those materials circulating at their highest value. It encourages us to:
- Rethink traditional production and use secondary materials
- Redesign products to use less material and live in perpetuity
- Refuse as consumers to buy disposable items
- Reduce as consumers how much we buy
- Repair products to keep them in use
- Reuse products rather than buying new
- Recycle materials from products that are no longer viable
By decoupling economic activity from the consumption of finite resources, a circular economy gives our world a breather. It provides an opportunity to regenerate biodiversity lost through the intense extraction of materials and the health of soil, water and air by reducing pollution and carbon emissions—all systems that we depend on for life and abundance to flourish.
Figure 1: Visualizing the Circular Economy
Here’s the challenge. We have an enormous gap, and it continues to grow. Since 2018, Deloitte and the Circle Economy Foundation have published an annual Circularity Gap Report. It tracks how circular the global economy is. The more virgin materials used, the bigger the gap.
“The vast majority of materials entering the economy are virgin, with the share of secondary materials falling from 7.2% to 6.9% as of the latest analysis.” – The Circularity Gap Report 2025