According to Walter Stahel, a circular economy turns goods that are at the end of their service life into new resources. There are two types of circular economy business models. One implements reuse through repair, remanufacture, and upgrades. The other turns old goods into new resources by recycling materials. If the new product has higher value than the old one, it’s known as ‘upcycling’. One of our favorite brands, Girlfriend Collective, is a great example of the second type of circular economy business model.
Girlfriend Collective makes high quality clothes from recycled materials. They take post-consumer plastic waste and turn it into durable athleisure sets of sports bras and leggings. These sets come in every color under the rainbow! When your product is shipped, Girlfriend sends you an estimate of how many plastic water bottles were upcycled to make your outfit. Even better, Girlfriend Collective recycles old pieces and turns them into future clothes. They take back ripped and stained clothes, giving you site credit in return!
Another perspective of circular economy comes from the Ellen Macarthur Foundation. This group identifies three key steps for circular economy. The first is to design out waste and pollution. Trash should never be created in the first place! The second is to keep products and materials in use. Girlfriend Collective does this by taking plastic waste and extending its life by creating high quality pieces that last for years. Finally, a circular economy should regenerate natural systems. Business models that embrace a circular economy should actively improve the environment. Girlfriend Collective does this by making sure that their packaging is 100% recycled and recyclable, so nothing goes to the landfill!
A circular economy can bring new profit opportunities. Costs are reduced due to lower virgin material requirements. For Girlfriend Collective, there are no virgin materials. Instead, the company uses plastic water bottles that would otherwise be going to waste. A circular economy also brings the chance to have stronger relationships with customers. Girlfriend does this through their Instagram, where they post pictures of models that are racially, ethically, and body size inclusive. To make a circular economy the reality for more companies, we need to learn how complex systems like an economy operate so we can create better solutions. That way, the circular economy can grow in scale and become mainstream.