Circular Economy Thinking is Stuck on the Perimeter

Caught up in the anti-woke dragnet, battered by greenwash and buffeted by economic headwinds, the air is rapidly escaping from the Environmental, Social, and Governance (ESG) hype bubble.

And with Donald Trump pulling out of the Paris Agreement, banning offshore wind turbines, and cutting 'green tape' wherever he can, it's enough to make a circular economy advocate toe the linear economy line.

But while this is no time to admit defeat, we should use this as an opportunity to pause, take stock and regroup.

There have been some incredible success stories and case studies, as well as some wonderful outlier policy wins. And while there seems to be progress, maybe even a shift in the direction of travel, it simply isn't enough.

What we've not seen is an organic or memetic replication of those successes. That is, beyond a few pockets of sectoral or regional take-up, circular economy thinking is not taking hold at a systemic level.

It has stalled on the perimetre.

This has exposed a hard truth: corporate sustainability efforts, as they’ve been structured, have largely failed to deliver real-world impact.

Carbon emissions remain at record highs, biodiversity loss is accelerating, and circular economy principles—despite their promise—are still on the fringes of business strategy.

The problem? Sustainability has been treated as an add-on rather than a fundamental driver of economic competitiveness.

I have been wrestling with this reality for a while now: that familiar hollow feeling of lost battles and slowly losing ground in the trench warfare of the climate wars.

So, I was both excited and relieved to find my concerns thoughtfully and expertly rendered in an honest and frank discussion paper recently released by the University of Cambridge Institute for Sustainability Leadership (CISL), Survival of the Fittest: From ESG to Competitive Sustainability, written by Lindsay Hooper and Paul Gilding.

The paper argues that business must shift from a compliance-based approach to sustainability, toward a model where sustainability is a core source of competitive advantage. The authors contend that "business needs policy to design out the conflict between long-term sustainability and short-term commerciality" and that companies should actively "compete aggressively on superior sustainability performance".

For circular economy advocates, the lesson is clear: circularity won’t become mainstream through voluntary commitments and corporate pledges. It will only take hold when it is embedded as a driver of market transformation and economic resilience.

This paper is a watershed moment for the circular economy movement. Whether you're an economist, policy wonk, activist, business leader, or consumer advocate, I recommend reading the full discussion paper. It isn't too long.

But if you would like a primer, the rest of this post breaks down what needs to happen next, drawing from the paper.

And if you're more of an audio-based learner, there is a short and insightful discussion with one of the authors, Lindsay Hooper, on the Ellen MacArthur Foundation's Circular Economy Podcast.

From sustainability compliance to circular economy competitiveness

One of the central arguments in the CISL paper is that ESG efforts have focused too much on disclosure and reputation rather than on structural business model change. As the authors emphatically state:

"We will not pledge and disclose our way to a sustainable future – more is required of us".

This is of particular relevance to the circular economy. Companies that see circularity as a checkbox for sustainability reporting—rather than as a strategy for business advantage—will not drive real change. Instead, circularity must be framed as a way to outcompete rivals in an economy that is inevitably shifting toward resource efficiency and low-carbon models.

The Swedish Government's fossil-free steel initiative provides a compelling example. Swedish manufacturers didn’t just set long-term carbon reduction targets—they aligned their business strategy with the future of the industry and worked with the government to create a market advantage. The result? Faster-than-expected progress and a globally competitive position in fossil-free steel.

For circular economy advocates, the takeaway is clear: businesses must stop treating sustainability as an obligation and start seeing it as a market-making opportunity.

Market rules must change—and business must lead the fight

A fundamental issue highlighted in the paper is that most businesses still find it more profitable to degrade the environment than to operate sustainably.

But you can't do business on a dead planet.

The authors note:

"The core of the problem is that none of the target-setting, disclosure requirements and greater visibility of enterprise risk, change the fact that it still remains more profitable in most cases in the short term for businesses to trash the planet than to change."

This is precisely why circularity remains on the fringes—it’s still cheaper to extract virgin materials than to use recycled ones, and linear business models remain financially dominant. Circular economy advocates must redouble our efforts to push for policies that shift this equation.

The solution lies in economic incentives and regulations that make circular business models more attractive than wasteful ones:

• Taxes on virgin materials to drive demand for secondary materials.
• Extended Producer Responsibility (EPR) policies that hold businesses accountable for waste. With 100% of the fees and levies being directed towards end-of-life infrastructure with a focus on kerbside collection (including certified compostable materials) to reduce friction, development, certification and testing of novel sustainable materials, and innovative sorting and processing technology.
• Mandatory recyclability and repairability standards to eliminate waste by design.

The paper makes it clear that business must actively advocate for these changes, stating:

"Strong and active private sector support [for policy] is essential… Business needs to work proactively, vocally and confidently in support of government policy to drive markets to deliver sustainability".

In short: Circularity won’t win unless the rules of the game change—and business must be the one demanding those changes.

Circularity as the default consumer choice

One of the biggest failures of the ESG approach has been its reliance on voluntary consumer behaviour to drive sustainability. As the paper points out:

"If each individual business only does the little it can afford, while highlighting good news stories… we create the impression that progress is adequate, delaying real systemic change".

This same issue plagues circularity. Too many brands ask consumers to “choose sustainable options” rather than making circular models the default. But as the electric vehicle (EV) transition has shown, shifts happen not when consumers opt in—but when systems make the sustainable choice the easiest choice.

For the circular economy, this means:

• Seamless collection systems to make material recovery frictionless and effortless.
• Deposit return and refill/reuse schemes that make reuse and recycling automatic.
• Financial incentives that close the price gap between virgin and recycled materials.

In the plastics industry, for example, most major brands have made recycled content commitments, but these do nothing to solve the collection infrastructure crisis. Without systemic policy support, plastics continue to flood ecosystems.

The lesson? Circularity must be designed for mass adoption—not just for the sustainability-conscious elite.

Hosedown greenwashing and expose business resistance

One of the most damning insights from the Survival of the Fittest paper is how businesses often undermine sustainability progress while pretending to support it. The authors note:

"The deeply uncomfortable truth for the corporate sustainability world is that there is a very real risk that—apart from a few genuine leaders—the majority of businesses… are actually contributing to the problem, by creating the impression that current progress is adequate".

Circular economy advocates must call out this corporate double-speak. Many companies publicly support sustainability while privately lobbying against the regulations that would make circularity viable. The plastics industry provides a prime example:

• Companies boast about using recycled plastic but oppose bans on single-use plastics.
• They support voluntary recycling initiatives but fight against mandatory EPR schemes.

The paper argues that progressive businesses must go on the offensive, stating:

"We need to call for greater transparency, scrutiny—and ultimately challenge—fellow businesses and organisations who have public positions supporting action while privately lobbying against it".

Simply put, if circularity is to become mainstream, business leaders must confront those blocking progress—not accommodate them.

Reframe circularity as an economic growth strategy

Finally, circularity must be positioned not as an environmental necessity but as a strategy for economic prosperity. The paper highlights how sustainability opponents have weaponised economic fears to delay action:

"Populist political parties… have framed the choice as ‘leave things as they are’ or ‘have change imposed on you at great expense’".

Circular economy advocates must flip this narrative. Instead of presenting circularity as an obligation, we must emphasise its economic and social benefits:

• Job creation in remanufacturing, recycling, and repair.
• Economic security and community resilience by reducing reliance on volatile, 'just-in-time' global supply chains.
• Lower costs for businesses by reducing material waste and energy use.

As the paper states:

"There is an important role for business here—to take control of the story… and make the case that swift action on sustainability will be good for economies, for jobs, for security, for health".

Circular economy as a competitive and cultural imperative

The rallying cry in the paper starts with a gut-punch:

Our conclusion is that, while we are locked into the near-term consequences of the damage we have done to date, we still have time to avoid the most dangerous scenarios. We remain optimistic that, with the right interventions and strategies by business and strong guidance by policymakers, we can avoid a truly existential crisis and achieve long-term prosperity and resilience.

The days of voluntary, feel-good sustainability are over. As Survival of the Fittest makes clear, the only way forward is competitive sustainability—where businesses profit by driving market-wide transformation.

• Circular economy advocates must push for systemic policy shifts.
• We must demand—not request—the rules that will make circularity mainstream.
• We must go on the offensive against businesses blocking progress.
• We must reframe circularity as the key to economic resilience and growth.

In short: "It is time to move on from trying to put ‘sustainability thinking’ into business and instead start putting ‘business thinking’ into sustainability."

But like any brand, we also need to look at this story through a cultural lens. We need to take this movement out of the boardrooms and conference circuit and into homes, halls, galleries, festivals, and communities.

Make it a party that everyone is invited to. Elevate luminaries, musicians, artists, and Indigenous elders (the original circular systems thinkers). Then, start building out new systems, structures, and institutions through a networked, localised, and decentralised communitarianism built on regenerative principles, art, music, beauty, connection to country, custodianship, and mutual aid.

Whether it's through a disaster shock or us finally getting our act together as a species, this change has to come. We need to communicate this effectively and reframe the circular economy from an ethical preference to an economic and cultural inevitability.

It's time for us all to swing for the fences.