A Financial Boost for Circular Economy Businesses

With the recent discussions by the European Parliament on the importance of developing a sustainable economy and sustainable business models the talks have now been backed up by a financial injection of funds to support this type of circular economy. 24 billion euros has been earmarked showing the EU's determination that a circular economy can become a reality for the good of the environment and the people of Europe and the wider world.

But what does a circular economy mean for businesses and individual consumers?

A circular economy works in such a way that manufactured products are designed in such a way that there is no waste once the product reaches the end of it's useful life. The components of a product are easily removed or dismantled for repair and re-use in new products. Raw materials such as valuable metals are not, therefore, wasted but kept within the manufacturing cycle instead of being discarded. And toxic chemicals are not released into the air via incineration or left to pollute the land and water systems if dumped in landfill.

The €24 billion of existing funds being contributed by the European Investment Bank (EIB) and the European Commission will be available to companies that set up a business model that works in the circular economy.

This will mean that companies who invest in researching and developing innovative ways to build a sustainable business model will benefit financially from doing so. Individual consumers should then find that products last many years and are easily repairable instead of the current trend for products to simply be thrown away and replaced with a new model. This is particularly true of electrical and electronic equipment that last only a few years and use a business model that means it has become cheaper and easier to throw an item away than to have it repaired. This current "build-use-discard" model has contributed to a growing problem with Waste Electrical and Electronic Equipment (WEEE). So much so that the EU has also had to implement a directive covering waste regulations about how WEEE recycling is carried out.

It is important that all businesses start to make the changes necessary to move towards a circular economy that wastes less in terms or raw materials and energy consumption and creates sustainable growth for the future.

The author has written and published articles on a wide range of topics including Small Business Advice, Tax and Accounting, Interior Design, House Renovation and Project Management.