Conceptualizing the circular economy: An analysis of 114 definitions
The aim of this paper is to create transparency regarding the current understandings of the circular economy concept. The findings indicate that the circular economy is most frequently depicted as a combination of reduce, reuse and recycle activities. Concerningly, many definitions overlook that circular economy necessitates a systemic shift.
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OVERVIEW
While at least seven circular economy (CE) literature reviews have been published so far, no comprehensive or systematic analysis specifically on current CE understandings had been conducted prior to this study. The aim of this paper was to provide transparency regarding understandings of CE. Hence, the research question addressed in this paper is: What are current understandings of the CE concept among scholars and practitioners?
The authors gather definitions published in peer-reviewed journals, definitions from other works, including policy papers and business publications, keyword searches and from a 2016 CE literature sample. A coding framework of definitions was developed in an iterative process to transform verbal and visual data into numeric data for purposes of analysis. The eventual coding dimensions relate to the core principles, aims and enabler of CE. The coding framework consisting of 17 coding dimensions, used to code all 114 definitions as depicted in Table 2, p.3 of the paper.
The 17 coding dimensions are:
4R Framework
- Reduce
- Reuse
- Recycle
- Recover
Waste hierarchy
Systems perspective
- Micro-systems perspective
- Meso-systems perspective
- Macro-systems perspective
Business models (enabler)
Consumers (enabler)
Sustainable development
- Environmental quality
- Economic prosperity
- Social equity
- Future generations.
Section 3 presents and discusses the results of the analysis of the gathered CE definitions, and the authors’ argument is presented in Section 4.
The authors defined CE within their iteratively developed coding framework as “… an economic system that replaces the ‘end-of-life’ concept with reducing, alternatively reusing, recycling, and recovering materials in production/distribution and consumption processes. It operates at the micro level (products, companies, consumers), meso level (eco-industrial parks) and macro level (city, region, nation and beyond), with the aim to accomplish sustainable development, thus simultaneously creating environmental quality, economic prosperity and social equity, to the benefit of current and future generations.” It is enabled by novel business models and responsible consumers.
This should be referred to as the summary of the authors’ coding framework instead of a definitive CE definition since the CE concept is understood throughout this paper as a construct that is developed through a multi-stakeholder discourse. The authors hope that this CE definition can be a contribution to the scholarly CE community with this definition ideally serving as a conceptual foundation for future work on the topic.
Future research recommendations include a focus on the dimensions identified in this study that are neglected by many working on CE, e.g. the consumer perspective. For instance, more research on the consumer perspective could help to highlight pathways to enhance their contribution to CE.
This research is important to sustainable finance because the circular economy concept is heavily referenced and employed by various stakeholders, and thus necessitates an unambiguous, universal meaning.
KEY INSIGHTS
- The circular economy concept is of great interest to both scholars and practitioners because it is viewed as an operationalisation for businesses to implement the much-discussed concept of sustainable development. This transparency is the first step to cohere the concept of circular economy (CE). A concept which fails to cohere may ultimately collapse or remain in a deadlock due to permanent conceptual contention, not only in research, but also in practice, since cumulative knowledge development on it is impeded.
- The authors initially examined 148 articles that mentioned the term ‘circular economy’. However, only 114 (77%) of these also defined circular economy. Given this finding, the authors recommend that scholars working on CE conceptually deliberate on the CE concept through the explicit adoption of a CE definition in their published work.
- According to the analysed definitions, the most prominent aim of CE is economic prosperity (46% of definitions), followed by environmental quality (37%–38% of definitions). Economic prosperity is most frequently mentioned by practitioners (53% of definitions) who are oftentimes said to view CE as a pathway to boost growth. Furthermore, social equity was only considered in 18%–20% of definitions.
- Specific to the 4R framework, recycling was found to be the most common component in the definitions (79% of definitions), followed by reuse (74%–75% of definitions) and reduce (54%–55% of definitions). All 4Rs (except for ‘Reuse’) are found less frequently in CE definitions from 2012 or later indicating that the discourse moved away from this framework, possibly towards a systemic framework.
- Only a third of definitions considered by the authors consider a waste hierarchy. Definitions lacking waste hierarchies are subverted CE definitions since adopting such definitions can result in companies that implement only minimal changes in their current business model, e.g. increasing recycling, to claim that they are part of CE.
- CE must be understood as a fundamental systemic change instead of a bit of twisting of the status quo to ensure its impact. Yet only around 40% of definitions conceptualize CE from a systems perspective.
