If the world is to succeed in addressing what the UN is calling a ‘triple planetary crisis’ – accelerating climate change, the global loss of species diversity and ecosystem services and the accelerating spread of harmful pollutants – then greater resource efficiency is key. If we are to do this at the same time as increasing prosperity, we need tools that can combine economic growth and resource efficiency. A market-driven development of the circular economy enables just that.
Managing limited resources is the basis for economics and business, while resource efficiency is by no means a new concept. It is embedded in the DNA of the entrepreneur to use resources as efficiently as possible. Thus, circular business models and the efficient management of materials and resources need not be advanced or new; where circular models and management have proved profitable, they have been in use for a long time. However, our global financial system is built on the principles of the linear economy, and it has long-been more profitable to discard resources rather than to reuse, repair, upgrade and recycle.
A circular economy extends the life cycle of materials, substances and products. This is not the result of a single solution; rather, it requires adaptations at all stages of the life cycle of a substance, material or product. Developing a circular economy involves everything from a novel approach to designing products to new ways of producing, consuming and using them. It is not a panacea – circular management does not in itself guarantee increased resource efficiency or reduced emissions – but it is a valuable tool, and one that is yet to realise its full potential.
Swedish companies are currently in the vanguard of developing resource-efficient, renewable and circular materials and products. As a country, Sweden also has abundant natural resources and sustainable primary production of several essential materials for enabling a circular and fossil-free economy. These are value chains that need to be further developed and that are capable of retaining their value for much longer periods through a transition to a circular economy.
The solutions to this triple crisis are to be found in business, but the conditions to encourage them are created by policy. A profitable circular economy must be based on market economy principles that allow companies and circular solutions to build strength and compete globally. Dismantling barriers, creating favourable and longterm market conditions and providing the right kind of incentives to develop the market-driven circular economy can accelerate the efforts of Swedish companies and promote and create sustainable growth in Sweden.
Sweden is not alone in developing of the circular economy, and the country’s leadership position is not a foregone conclusion, with competition in many parts of the world. Within the EU, the pace of legislation is high, a positive development provided that it also leads to common rules, competitive companies and a reinforced internal market. However, much remains to be done here in Sweden in order to continue to develop the circular economy and eventually improve the competitiveness of Swedish companies.
This is why the Confederation of Swedish Enterprise has produced this report. It is not a comprehensive picture of everything that required in order to realise the full potential of the circular economy – there is no ‘quick fix’ for transforming an economic system and mindset from linear to circular. However, were the action list provided at the end of this report were to be implemented, we will have come a long way in Sweden. We will also have laid a foundation for our Swedish companies to lead the transition to a circular and fossil-free future – to the benefit of Swedish society as a whole.