Blog: UK Circularity Gap Report – why carbon-style reporting can help UK improve circularity

Since 2018, Circle Economy has been measuring the global economy by circularity metric – a measure of how effectively we re-use resources in our economy.

And this year they have turned their sights on the UK.

The inaugural report concludes that the UK’s economy is 7.5% circular – marginally ahead of the 7.2% global average and much better than Norway’s 2.8% but far worse than the Netherlands’ 24.5%.

In short, 92.5% of all economic activity in the UK requires the consumption of virgin materials and even more concerning from a global sustainability perspective is the fact that 80% of those materials are extracted abroad.

The consequence for our environmental commitments is stark, as low circularity has a significant impact on the UK’s ability to meaningfully reduce the amount of CO2 produced by economic activity to minimise its impact on climate change.

Reconomy’s role

This report is particularly close to my heart because as a leading global circular economy specialist, Reconomy was selected alongside several other government bodies and non-profit organizations, to provide an industry perspective on the report and consider how businesses could respond to the findings.

This involved participation in the report’s working groups, providing industry insight and practical suggestions about what may be required to improve the score. The report does a fantastic job at setting out what the immediate priorities must be to improve circularity, today. It also provides valuable food for thought about the steps we need to take to change the way we think about resources and circularity.

Pathway to improving circularity

Within the findings, the report set out six “what if” scenarios that would result in the UK improving its Circularity Metric to 14.1%:

– Build a circular built environment – retrofitting what already exists to reduce energy demand from existing buildings and shifting to more resource-efficient building practices in the future.

– Shift to a circular food system – moving the nation onto more sustainable diets away from carbon-intensive meat and heavily processed foods, reducing food waste and fostering regenerative farming.

– Champion circular manufacturing – developing high-value domestic recycling capacity and investing in technologies to reduce industrial waste. For machinery, equipment and cars, the report suggests employing R-strategies: remanufacture, repair and reuse—supported by investment in R&D, infrastructure and necessary industrial skills.

– Rethink transport and mobility – reducing or avoiding travel and ‘greening’ the remaining mobility. The former involves investing in high-quality public transport and mobility-as-a-service models.

– Embrace a circular lifestyle – incentivise behaviors that encourage UK consumers to buy less, share more, repair frequently and opt for clean energy providers.

– Tackle the UK’s import footprint – shift away from high-impact imports and build resilient supply chains. Multiple products can be produced domestically and more efficiently. This would allow for cutting virgin materials embedded in imports by 25%.

Together, these improvements would cut the UK’s material and carbon footprints by approximately 40% and 43%, respectively.

Practical challenges

We work with major brands such as Balfour Beatty, Tesco and O Polly to improve domestic and industrial circularity across the entire production, consumption and recycling life cycle. So we see first-hand how committed many businesses already are to using technologies and services that reduce material consumption and waste.

But the report shows that more needs to be done, and we are not going to achieve any of the objectives set out above without the willingness and support of businesses.

What we need now are the frameworks, infrastructure and legislation needed to implement meaningful change. We need the adoption of universal Science Based Targets for material consumption in the UK (similar to those already use for Carbon reporting); investment in mandatory recycling infrastructure; proper incentivisation for businesses to invest in circularity (such as those set out by the Task Force on Climate-related Financial Disclosure), as well as legislation and tax reform to encourage better business practices.

Conclusion

It is a challenge to make well-established business models circular and this report sets out several clear opportunities to make a meaningful impact.

Reconomy is ideally placed to enable and facilitate this change. We already help significant companies on their journeys to circularity, the first step for any businesses that are looking for practical action is to understand the true impact of your activities and set measurable targets.