You are currently viewing Is Profit Maximising Preventing the Circular Economy From Taking Off?

Is Profit Maximising Preventing the Circular Economy From Taking Off?

Reading Time: 5 minutes

The circular economy could revolutionise our relationship with products  

You’d be hard-pressed to find a company that hasn’t jumped on the sustainability bandwagon. With so much noise it can be difficult to separate those who are genuinely spearheading a sustainable approach from those who are paying a ‘sustainability’ consultancy to create an illusion they are. An easy way to identify companies that are greenwashing from sustainability pioneers is to look at who is embracing the circular economy. 

Rather than the traditional take-make-use-dispose linear processing of products, a circular economy is all about closing the loop to avoid products going into landfills at the end of their life cycle. Circularity involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products for as long as possible. 

Considering that 80 per cent of a product’s environmental impact is determined at the design phase, shifting design incentives toward a circular economy would have profound implications on how products are manufactured and used. There are plenty of examples of companies embracing a circular business model in various markets.


The traditional linear processing of goods means that of the 23 billion pairs of shoes made each year, 22 billion find their way to landfills. 

As the first sneaker brand to use fabric entirely made from recycled plastic bottles and recycled polyester, VEJA aims to put a dent in this horrific misuse of resources. 


5.7 million passenger cars were scrapped in the EU alone in 2021. 

BMW, which has set a target for all new cars to be made from reusable parts by 2026, is looking to reverse that trend. 


More than 4 billion pounds of carpet ends up in U.S. landfills every year and 1.6 million tonnes in European landfills. One of the biggest reasons so much carpet becomes waste is due to the way it’s been designed. 

When it comes to carpet design the Swiss company Rohner ​​is a maverick. They developed Climatex Lifecycle, an upholstery fabric that is naturally biodegradable once it reaches the end of its life cycle.

Mobile phones

E-waste is toxic and has become monumental in its scale. 5.3 billion phones were thrown away in 2022. 

Nokia is looking to change all of that having recently launched a DIY smartphone designed to be repaired at home.

Toilet paper

Almost two million trees are cut down DAILY to meet global toilet paper demand. 

Bumboo is looking to save those trees by making toilet paper out of bamboo.


In the US a billion plastic toothbrushes are thrown away each year. 

BAMWOO wants to reverse that trend by making biodegradable toothbrushes made from bamboo.

Coffee cups

The world of reusable coffee cups has become a highly competitive market, Circularandco is one such player. 

You wouldn’t think it, though, when in the UK alone 2.5 billion coffee cups are used and discarded each year.


92 million tonnes of textile waste is created each year. An outcome of the fast fashion business model embraced by high street retailers. 

Patagonia has shunned the fast fashion trend. Buy one of their products and it comes with a lifetime guarantee. They offer a service where should the item become damaged they’ll repair it for you, usually free of charge.

A tidal wave of waste

The list could go on and on when it comes to companies embracing circularity. But when you look at what these companies are up against when it comes to waste from each sector, it’s clear the vast majority are not. So why?

First of all, it’s all good and well if companies are re-using materials to make products, but customers must return the products at the end of their life cycle for a company to close to loop. 

Product as a service system (PSS) is a concept that would encourage a shift to a circular economy. Rather than each person buying and then owning a product, they lease it from a company and pay a monthly subscription for the service it provides. The premise of the concept is that we often don’t value products like white goods, electronics, lightbulbs, etc., in and of themselves. We value the function or service the product provides. A fridge keeps food cold; a washing machine washes clothes; a radiator brings warmth, etc.

Embracing PSS would incentivise the design of highly durable products that don’t break. If they do, it will create additional costs in fixing and maintaining the product. The company retains ownership of the product, so, at the end of its life, it would need to be returned to the company, with an option to replace it with a different product. The company can then reuse the materials from the old product to create new products. This closes the loop, creating a circular reuse of materials.

The thing is, PSS is hardly mainstream. It’s not exactly taking off as a concept, is it? The problem with shifting to PSS and a circular business model is that it would require a transformation in our relationship with companies, products and one another. 

We have designed society and the economy to facilitate products that are designed to be disposed of at the end of life. The issue here is that once a system is laid out wrong it tends to suffer from inertia. So even though the linear processing of goods is enormously wasteful, it’s very difficult to redesign it from scratch.


This goes for so many elements of how our societies have come to be designed. Take transportation. If we want to design a sustainable transportation system the question that must be asked is, what does a sustainable transportation system look like? 

The problem with the question is we’re not starting from a blank canvas. There happens to be a vast infrastructure in the form of millions of miles of road. There also happens to be a car industry estimated to be worth $2.9 trillion

So thinking about that question, cars, and the roads needed to transport them, aren’t a particularly efficient form of transport (particularly in cities). But the options available to us when it comes to redesigning the transportation system are limited by what is feasible within the constraints that make up the current transportation system. It’s unthinkable to imagine a transportation system without cars. So the next best option is companies like BMW minimising waste, or of course, shifting to electric vehicles. 

This same principle applies to so many of the industries listed above. Whether it’s toilet paper, clothes or coffee cups, it’s unfeasible to redesign the system from scratch, so the next best option is for companies operating in inherently unsustainable markets to minimise social and environmental costs. 

It’s here we get to the crux of the problem.

Profit over people

The thing about circularity is that circular businesses no longer focus mainly on profit maximisation or pursuing cost-cutting through greater efficiency in supply chains, factories, and operations as the primary corporate objective. The focus is on creating, offering, and delivering value to stakeholders while minimising ecological and social costs.

The key part of all of this is ‘profit maximisation’. 

Capitalism can be defined as the private ownership of the means of production. The essential feature of capitalism is the profit motive. Companies quite literally exist to maximise profits. So they’re hardly going to embrace a business model where profits become secondary to minimising social and ecological costs. 

In just the same way as the transportation sector, the question we need to ask about the economy is, what is the best way of organising the economy to ensure we produce all of the goods and services needed to fulfil human needs within environmental limits? Many commentators argue it’s about shifting to a degrowth economy. But again, we’re not starting from a blank canvas. The options available to us when it comes to redesigning the economy are limited by what is feasible within the constraints that make up the current economy.

A circular economy could help to revolutionise the way that needs are met. But the keyword is revolution. By its nature moving to a circular economy would require fundamental social and economic changes. And that’s why it’s not taking off. Because circularity is incompatible with a capitalist system that demands the overproduction and consumption of goods and services. 

Without transforming the overall economic system, post-growth ideas like a degrowth economy or the widespread adoption of the circular economy aren’t going to happen. Most companies will remain locked into business as usual. They’ll continue to manufacture goods linearly. Markets will continue producing enormous amounts of waste. Environmental impacts will continue to increase and we’ll continue to hurtle towards triggering tipping points. When we do we’re in for a world of trouble that could lead to social breakdown on a global scale. And that’s become precisely what’s needed for new ideas to have their day in the sun.