Christian M. 9 min read

The circular economy in commercial waste

The increasing levels of pollution and waste are pushing the world toward a tipping point. A paradigm shift is needed—one that prioritises the reduction of waste and champions the reuse of resources.

This shift requires moving from the traditional ‘take-make-dispose’ model to a more sustainable, circular approach. It’s a journey from linear to circular, from wasteful to resourceful.

In this article, we delve into how businesses can navigate this transition, embracing circular practices that not only benefit the environment but also enhance their own sustainability and efficiency.

💡 Key takeaways:

  • Circular economy: A term describing the sustainable use of resources in any process. It contrasts with the traditional ‘take-make-dispose’ model.
  • In business: Companies that follow the waste hierarchy closely, leaning on waste prevention, minimisation and recycling, are ‘circular’ or ‘sustainable’ entities.
  • Regulation-driven: UK waste legislation has been updated to reflect a circular economy approach, leaving councils and businesses needing to transition as quickly as possible.

What is a circular economy?

The ‘circular economy’ is a loose term describing any process where the bulk of the original products and materials remain in the system for as long as possible in a self-sustaining cycle. In other words, it refers to any process where minimal or no waste is generated as everything is perpetually re-used or recycled.

It’s often used interchangeably with terms like ‘sustainable’ and ‘renewable’, which ultimately refer to similar things.

As such, you will encounter a ‘circular economy’ in multiple scenarios, ranging from political speeches and government policies to product descriptions, gardening manuals and even children’s books.

Circular economy vs linear economy

In contrast to our current profit-driven system, which focuses on “growing the economy,” “increasing GDP,” and “generating wealth” without regard for the consequences, a circular ‘reduce-reuse-recycle’ economy prioritises sustainability and resource efficiency.

Our existing linear ‘take-make-waste’ economy assigns value only to monetary gains, often overlooking the environmental costs. If no economic value can be derived from waste, it is typically discarded as cheaply as possible, with little concern for its end-of-life impact.

Consider the example of a non-degradable plastic bag. Manufacturers produce them at the lowest cost using oil-based plastic, aim to maximise profits, and then disregard their fate. The product’s lifecycle starts in the factory and ends in landfills or incinerators, or worse, polluting our soils, rivers, and oceans.

The circular economy in UK commercial waste

Having covered the theoretical bases, let’s see how this circular economy applies to business processes. The first thing to establish is that any business generates waste:

  • Office documents may be archived for years but eventually need disposal.
  • Cafes can’t re-serve yesterday’s leftovers.
  • Mechanics collect engine oil that can’t be reused in other vehicles.
  • Health facilities generate clinical waste that can’t be reutilised on other patients.

While hazardous materials, medical waste, and certain plastics are hard to reuse or recycle, much can be avoided, reused, repaired, refurbished, or recycled. In other words, the circular economy involves fully embracing the waste hierarchy. The more closely a business follows these principles, the more ‘circular’ or ‘sustainable’ it becomes.

💡 Extended Producer Responsibilities (EPR): Recent UK legislation introduces new responsibilities for manufacturers and retailers. They are now increasingly accountable for offering their customers options to avoid waste disposal.

Regulations drive the circular economy in the UK

Transitioning to a circular economy begins with the introduction or amendment of laws. Over the years, the UK has seen several updates to its waste regulations, each bringing stricter measures. The latest Environment Act 2021 brings in extended producer responsibilities, mandatory recycling, and electronic waste tracking, among other measures that are clearly geared for change.

Each home nation implements this to its own reality with its own devolved policy and regulation, which local councils must follow and interpret to their local infrastructure.

Tech and innovation in the circular economy

Technology and innovation act as ‘chicken’ and ‘egg’ in the circular economy. Businesses strive to become more sustainable by implementing new technologies like artificial intelligence (AI), the Internet of Things (IoT) and robotics, which in turn enables further innovation through finding novel uses or new inventions from waste products.

Read our article on commercial recycling technology to understand these innovations and perhaps find opportunities your own business can capitalise on.

How circular are UK businesses?

In short, UK businesses are comparatively more sustainable than the rest of the world and keep rapidly improving. However, there’s a lot still to be done.

A continuous transition

The UK has been transitioning since the first waste regulations were enacted in 1990. Since then, the UK has dramatically changed its approach to waste, with the introduction of the landfill tax and widespread commercial recycling being two examples.

However, there is still a lot to do, especially in problematic waste streams like electronic waste and composite plastics and in changing single-use thinking and product design. For more details, see our article on difficult-to-recycle materials.

We cover the current state of each stream in separate articles:

How do UK businesses compare against the rest of the world?

The UK bodes well, yet the competition is not great. This can be summarised by the following three points:

1) The UK is among the top performers in Europe

The UK is among the top performers in the EU, with robust recycling systems and high levels of innovation in circular economy sectors. It ranks alongside Germany and France in terms of circular economy scores.


2) It has a growing circular economy sector

The ‘circular economy sector’ in the UK is significant, with 4,117 companies generating over £28bn in revenue and employing almost 112k people. These companies have received considerable funding, with the private sector investing almost £488 million and receiving over £94 million in grants. This data suggests that the circular economy is an important and growing sector in the UK economy​

Source: OECD

3) But the rest of the world remains traditional

Over 100 billion tons of raw materials are extracted annually to meet the high consumption levels in all high-income countries, including the UK. The WEF has stated the world operates at only 8.6% circularity, meaning that most resources are still used in a linear “take-make-waste” model.

Additionally, the complex global economic relationships mean that some regions may inadvertently force others to increase extraction to meet their needs by attempting to become more circular, causing what is called the “leakage effect.”

What are the benefits of adopting a circular economy?

Here are five benefits of adopting circular practices in UK businesses:

1. Cost savings

Businesses can lower production and operational costs by introducing ‘circular’ practices like reducing waste, reusing materials, and recycling. This includes paying less commercial waste collection costs, reducing the risk of non-compliance fines from regulators, and the brand benefits from communicating these practices effectively.

2. Resource efficiency

When businesses seek to generate less waste, they must consider changes that reduce their dependency on raw materials and eliminate the use of unnecessary resources. Examples include businesses going paperless to avoid paper waste altogether or others providing financial incentives for employees to bring their own lunch instead of getting takeout.

3. Innovation

Embracing circular practices drives innovation. Biofuel companies like bio-bean have thrived due to a lack of circularity in spent coffee grounds from London’s many cafes. Another example is Mud Jeans, a Dutch company that has entered the UK market, which offers a leasing model for jeans, where customers can return their worn jeans to be recycled into new ones.

4. Compliance

Waste regulations are becoming increasingly strict. The more your business can adopt circular principles early, the smoother its transition will be in the future, negating any potential fines.

💡 Non-compliance: Remember that most businesses in the UK do not fully comply with regulations, mostly unknowingly. Statutory fines vary per home country but can sum up to thousands of pounds.

5. Brand Reputation

Consumers are increasingly concerned about sustainability and may readily dismiss your business if misbehaviour in its waste management becomes known. Similarly, your business may attract young talent and a new customer base if they take on sustainable practices and communicate them effectively.

Case studies: Circular economy in action

Here are five case studies of businesses benefitting from implementing circular practices in different ways. Some are enablers for other companies, others lead by green design, while others establish clever circular partnerships:

DS Smith: Sustainable packaging

As a leading provider of sustainable packaging solutions, this company has embraced the circular economy by focusing on the design and production of recyclable packaging, which other businesses can, therefore, use while fulfilling their Extended Producer Responsibility.

Already, their efforts in reducing waste and promoting packaging recycling have resulted in significant environmental benefits, such as saving 360,000 tonnes of CO2 emissions in 2019.

DS Smith’s accolades have enhanced its brand reputation in the B2B (business-to-business) landscape, leaving traditional competitors scrambling to catch up.

B&Q: Take-back schemes

We all know B&Q. The home improvement retailer now offers take-back schemes for products like power tools and paint, meaning customers who no longer require them have a straightforward option for repair, re-use or recycling instead of disposal at a landfill or incinerator.

Business customers save money in landfill tax and make their own compliance easier, while B&Q can generate additional revenue from refurbishing and re-selling some of these items to fund this continued implementation of circular economy principles. A win-win.

Veolia UK: Building the infrastructure

While Veolia’s own domain is waste management and environmental services, other companies that generate commercial waste cannot implement their own circular economy practices (i.e. recycling) without the necessary infrastructure. This is where Veolia has excelled.

Veolia keeps expanding and innovating its services and infrastructure, including metal recovery from incinerator bottom ash, producing high-quality compost from many organic waste processing sites, and expanding wood recycling and processing capacity by 50,000 tonnes per year over the last decade.

Without this, being sustainable would be significantly more difficult for many businesses.

Adnams: By-product efficiency

Adnams (a brewery and distillery) in East Anglia has focused on using by-products from its brewing process as inputs for other products to ensure they do not go to waste. For example, they use spent grains as feed for cattle and repurpose brewery yeast for pharmaceutical products.

While certainly not the only business that does this, it’s a good example of how this approach reduces waste while creating additional revenue streams by partnering with other companies, even in different fields.

Interface: Design innovation

Interface is a little-known global flooring manufacturer with a reputation for striving for environmental excellence since its inception. It is the largest manufacturer of modular carpet tiles, which can be easily replaced and recycled and produce significantly less carpet waste due to its Lego-like installations.

Since 1994, the company has had a strict environmental policy that emphasizes innovation through design. Since the 2000s, its products have been almost entirely made from recyclable materials, and since 2018, all of its products have been carbon neutral throughout their lifecycle, something very few companies can boast.

How can my business adopt circular practices?

As explained earlier, the closer your business adheres to the waste hierarchy and current regulations, the more ‘circular’ it will become.

If your business needs help identifying its weak points and forming a strategy, a waste audit is the best approach. Additionally, businesses can incorporate circular economy ideas into their processes and workflows and take the initiative in innovation.

Obviously, your business can only be as sustainable as its context, so it’s also useful to contact local councils to find out what waste infrastructure and services are available to fulfil your business’s circular ambitions through local recycling, charity shops, electronics repairing, just to name a few.

Ultimately, they are the government’s direct point of contact regarding commercial waste disposal and commercial recycling services.

💡Circular businesses: In addition to your local council, it’s worth researching online for businesses providing solutions for niche wastes or design. See these case studies for examples.

Can the government help my business become circular?

Being a loose term, the ‘circular economy’ is something difficult to put into practice so there is no direct government help specific for it. However, there are grants and funding for innovation and research that may be interesting for your business:

Circular Economy Package

The CEP outlines a revised legislative framework aimed at reducing waste and establishing a long-term path for waste management and recycling. The package aligns with the UK’s ambition to transition to a circular economy and includes measures to streamline reporting requirements and tackle specific waste issues.

Source: UK Gov

Funding for research centres

The UK government has allocated £22.5 million in funding for five state-of-the-art research centres that will explore material reuse methods and technologies in various industries, such as textiles, construction, chemicals, transport, electronics, and metals.

Additionally, UK Research and Innovation (UKRI) has established interdisciplinary circular economy centres to help move the UK towards a more sustainable future.

Source: UK Gov

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A circular future is inevitable, and the longer your business takes to join the movement, the more issues it will encounter in the future. Compare commercial waste quotes by providing us with your postcode and use your savings to begin your own transition!

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