Iain Gulland, Chief Executive of Zero Waste Scotland, explains how circularity can drive economic growth, not only environmental benefits.
With recent data and headlines proclaiming challenges to economic growth, there’s no doubt that fostering increased GDP is at the top of many political leaders’ agendas.
Dismal statistics across much of the globe, including the UK, have decision makers scrambling for strategies to drive up GDP – and environmentalists taking a sharp intake of breath.
It’s because there’s a pervasive assumption that growing the economy must come at the cost of environmental responsibility.
But that perception is intrinsically linked to an outdated economic model that puts the commercial interests of the economy before those of the environment.
It doesn’t have to be that way; we need to see more investors catching on if we’re to evolve a futureproof economic system that works for both people and the planet.
Businesses and the circular economy
Circular business practices have unrivalled potential to help us decouple from unsustainable resource extraction and keep materials in high-value use.
Yet while evolving a circular economy is recognised as an environmental must, with growing geopolitical tensions affecting supply chain resilience and giving rise to ethical concerns it has also fast become a matter of national economic security.
We’re now at a critical tipping point where the economic and environmental agendas are converging – and that could be good news for circular finance.
Investors increasingly want to see evidence of long-term resilience in a business plan, and with material costs at a premium and businesses struggling to operate long-term – let alone scale – circular investment opportunities are ones with longevity.
The case for economic growth
There’s a growing body of evidence that shows the circular economy is not just a means for environmental sustainability, but a viable and lucrative economic opportunity that’s futureproof too.
The All-Party Parliamentary Group (APPG) for the Environment recently stated that, by creating the right circumstances for circularity to thrive, we could boost the UK economy by £25billion by 2025.
Meanwhile, Green Alliance insist that, through ambitious approaches, around 470,000 UK jobs could be created by the same year, alongside an 11% decrease in carbon emissions by 2050.
Productivity and resilience would also prosper, argues PricewaterhouseCoopers (PwC), noting that despite more people working productivity is stagnant – inhibiting wage growth and living standards.
Yet applying the right circular models to businesses could see labour productivity increase by up to 0.4%. That’s more than what’s projected from many emerging technologies.
At Zero Waste Scotland we’re contributing our own strategic research. From our partnership with the Economic Development Association Scotland (EDAS) to explore the role of circularity in economic policy and strategy to our work with Prosper on the milestone report ‘Scotland’s Blueprint: The Art of the Possible’, which highlights opportunities for Scotland to compete on a global scale while generating economic, social, and environmental benefit at home.
The message is clear: economy and environment must come together if we’re to realise either ambition successfully, and that, in taking a more holistic approach, we can better leverage the benefits.
Circular business models in action
There are a growing number of innovative examples out there showcasing circular investment as a catalyst for economic, environmental, and social improvement.
One such example is CirCoFin (Circular Construction Finance) in Scotland – a pioneering, EU-funded project that will see Zero Waste Scotland develop an investment-ready Circular Construction Hub model by December 2027.
The initiative has huge environmental potential: keeping valuable materials in good use for longer and relieving the environmental impact of the construction and demolition sector, which accounts for 45% of all waste in Scotland.
But significantly, CirCoFin is targeting €80million (approximately £67million) in private investment across its four Circular Construction Hub projects in mainland Europe, of which Scotland is one.
This represents a clear demonstration of commitment and attractiveness of circular projects to draw investment and generate economic benefit.
What’s more, Scotland boasts a growing network of circular businesses that continue not just to survive, but to thrive.
Since 2016, Zero Waste Scotland’s Circular Economy Investment Fund has invested £12 million in more than 60 Scottish enterprises, helping to create more than 70 jobs in Scotland.
The businesses have since collectively secured £35 million in match funding, showcasing the huge economic potential that circularity represents.
Financially secure, sustainable change
For too long a circular economy has been seen as an ‘alternative’ vision that traditional economists have struggled to reconcile with the linear reality.
As we look for ways to navigate economic downturn it’s not just an environmental necessity, but a sound economic strategy with significant growth potential.
In Scotland we have opportunities on the ground that are showcasing this in real time – not just generating investable green business models but contributing to community wealth and resilience, and raising people’s living standards in the process.
However, if we want to continue in this vein and maximise the opportunities available it’s vital that we reject the perceived dichotomy between environment and economy for good and embed circular finance into our economic strategy.
The knowledge and evidence exists; now is the time for impactful solutions that work for people, planet, and prosperity. A financially secure, circular economy will help us evolve a sustainable future that benefits for all three.
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