Glossary

Find the definitions of the circular economy terms used throughout the resource.

By-products

An inevitable result of certain types of material processing and agriculture. In a circular economy all by-products can be feedstock for another production process.

Circular business models

Business models designed in ways that are aligned with one or more of the circular economy principles. For example, product-as-a-service is a business model where the ownership of the product remains with the manufacturer, incentivising, for example, longer product life, easier refurbishment, and better recycling, meaning it is more likely to lend itself to the principles of a circular economy.

Circular economy

Moving past the current take-make-waste extractive linear model, a circular economy is restorative and regenerative by design. It entails gradually decoupling economic activity from the consumption of finite resources. Underpinned by a transition to renewable energy sources, it is based on three principles: design out waste and pollution; keep products and materials in use; and regenerate natural systems. Transitioning to a circular economy not only addresses the negative impacts of the linear economy, but more importantly represents a systemic shift that builds long-term resilience, generates business and economic opportunities, and provides environmental and societal benefits. The concept recognises the importance of the economy working effectively at all scales, and of creating an economy that is distributed, diverse, and inclusive.

Materials sourced from regeneratively managed resources

Materials grown in ways that improve whole ecosystems, including by increasing soil health and carbon content, water quality, and biodiversity. The concept goes beyond retaining the status quo of natural systems (unless those systems are not degraded in any way) and extends to improving their health and capacity to regenerate themselves.

Material sourced from sustainably managed resources

The material was grown in a way that preserves the ecosystem without degrading it further, but falls short of being sourced from regeneratively managed resources. Sustainable sourcing is considered a transition stage towards a regenerative way of managing materials sourcing. Most well-known sustainability certification schemes fall under this category (e.g. FSC 100%).

Products and materials suitable for the biological cycle

Products and materials suitable for the biological cycle are consumed or otherwise degraded during use and do not cause harm to human health or the environment during or after their use. This category mainly pertains to food and feed, but also includes ornamental plants, medicines from living sources, biomass used in energy production, and inorganic matter that is cycled through natural systems (e.g. salts).

Products and materials suitable for the technical cycle

Products and materials suitable for the technical cycle can be used, reused/redistributed, maintained/prolonged, refurbished/remanufactured, or recycled. They include all inorganic materials such as metals, plastics, and synthetic chemicals, as well as materials from a biological origin, such as wood, cotton, and bioplastics found in products designed to be part of the technical cycle. Note that this category also includes materials of biological origin that are used as reactants in chemical processes (e.g. vegetable oil for plastics) and those that form the basis of other materials or products that behave as technical materials (e.g. pulp for paper).

Recycling

The process of reducing a product all the way back to its basic materials, reprocessing those materials, and using them to make new products, components or materials. Recycling refers to materials that are processed in practice (as opposed to materials for which recycling is technically feasible). It is okay to use publicly available recycling rates where you can demonstrate that they are for materials that you produce and in regions where you are active.

Refurbish/remanufacture

When a product is refurbished, its condition is improved – potentially to as-new. The process can include disassembly and rebuild, replacing components where necessary, updating specifications, and improving cosmetic appearance. When a component is remanufactured it is re-engineered to as-new condition with the same warranty as a new component.

Reuse/redistribute

Products in the technical cycle can be reused multiple times and redistributed to new users in their original form with little enhancement or change.

Service

A service is something a company provides, and the customer pays for, but there is no transfer of material ownership. A service cannot be transported or stored and only exists while the provider is supplying it and the customer is using it. For example, refurbishing is a service. There are three types, dependent on whether there are material flows, and who owns them:

• Services with material flows, where your business owns the materials (e.g. a company that owns and leases furniture)

• Services with material flows, where your business doesn’t own the materials (e.g. a company that services IT hardware owned by others)

• Services without material flows (e.g. consultancy)

Suppliers

Any organisation or individual you procure from (can be more than one step upstream).

Waste

Unwanted materials or substances. In a circular economy, waste is designed out.