Industry 4.0: What Manufacturing Looks Like in the Digital Era – Visual Capitalist

Visualized: The Circular Economy 101

The principles of a circular economy trace back as far as 3,000 years.

Archeological evidence shows that Romans recycled trash following the eruption of Mount Vesuvius in 79 AD. Roughly 200 years later, people recycled glass during the Byzantine Empire. Fast-forward to today and circular economy strategies are projected to generate trillions in economic output by 2030.

But how does the circular economy work? This infographic from MSCI provides a guide to circular economiesfrom circular business models to circular technologies.

First, lets start at the root of the problem, our current consumption trends:

To change consumption patterns and reduce waste, consumer behaviors, business models, and policies will need to change. But the big question is how?

To answer this problem, the concept of a circular economy is gaining traction.

A circular economy is centered on the idea of resources being kept as long as possible within the economic system, where materials that have undergone an entire lifecycle, from production to end stage, are returned to the economic system as an input.

Above all else, a circular economy is based on sustainable life cycles.

In 2019, BlackRock launched an inaugural Circular Economy fund. Since then, it has attracted $2.1 billion in investment. A number of the worlds largest asset managers have followed suit.

Policy-driven agendas are also focused on the circular economy shift:

Given the steep cost of linear economic models, governments are beginning to pay attention to the merits of a circular economy.

Circular economy principles aligned with sustainability offer the following advantages:

Importantly, circular strategies, technologies, and transition companies are looking beyond traditional economic models.

From alternative energy to bio-based and recyclable materials, the most effective circular business models are ones that create obvious value.

Lets consider five circular economy business models and where they can be applied in the supply chain. Additionally, some of the models can be adapted to any part of the supply chain.

Procurement/raw materials acquisition

Material & product manufacturing

Sales & marketing

Product use

Material & product manufacturing

Product design/R&D

Today, circular models present opportunities in fashion, food systems, mining and metals, among others.

A circular economy theme is built on two key dimensions:

1. Smarter technologies: Providing circular technologies

2. Resource efficient processes: Maximizing materials and minimizing impacts (e.g. emissions)

Then, MSCI identifies areas of innovation that support a circular model. Consider the following circular technologies, which are produced by companies that contribute to a circular economy theme end-state through their products and services.

It also looks at circular transitions, which are companies that enable the shift to a circular economy through their management of related issues.

As a result MSCI has created a range of Circular Economy related indexes:

Its worth noting that what is measurable today will likely only expand, considering the evolving regulatory frameworks and thinking around a circular economy,

Through looking at circular economy innovation, we yield three important insights:

For a growing number of investors, companies, and researchers, a circular economy provides a wide scope of opportunities ranging from single-use plastics alternatives to water sustainability.

Link:

Industry 4.0: What Manufacturing Looks Like in the Digital Era - Visual Capitalist