Circular Economy

ESG

An economic model eliminating waste by keeping materials in use through reuse, repair, and recycling.

Sources

1. European Commission, DG ENV — Circular economy environment.ec.europa.eu accessed 23 September 2026

The Commission frames it against the model it replaces: “the traditional linear model of ‘take, make, use, dispose’ is unsustainable and pushes us beyond planetary boundaries”, whereas “in a circular economy, products and materials are kept in circulation for as long as possible, and waste and resource use are minimised.” The figures it publishes explain where the leverage is claimed to lie: 90% of biodiversity loss is attributed to resource extraction and processing, up to 80% of a product’s environmental impacts are said to be determined at the design phase, and the EU’s current circular material use rate is given as 11.8%. That middle figure is the policy argument in miniature — if most impact is locked in at design, regulation aimed at waste handling arrives far too late. A Circular Economy Act is described as due for adoption in 2026.

What this source settles. Where the text above quotes a regulation or a statute, that instrument governs and its own later amendments prevail over any summary. Where it quotes an institution’s explanatory page or a standard-setter, it is authoritative for how the body understands its own regime and for the figures the body itself publishes — and not for whether the regime works. Read the instrument for obligations, and look beyond the issuer for evaluation.

Deeper treatment: this term also has a full entry in the Business Library.

Related terms

• Carbon Footprint
• CSDDD
• Environmental Social Governance
• Fair Trade Certification
• GOTS Certification
• Life Cycle Assessment

From the AJG lexicon archive (July 2026).