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Embracing the Circular Economy: A Necessity in the Face of Trade Challenges
- 6 hours ago
- 7 min read
Why circularity is the key to thriving amid tariffs, trade tensions, and shifting global economies. - Thought Leadership by #SustXGlobal50 Awardee Sadaf Taimur, Canada
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Summary
In the wake of rising global trade tensions and tariffs—like the recent U.S. levy on Canada—Sadaf Taimur, Sustainability Scientist/Director of Sustainability & Circularity at Goodwill Industries, Ontario Great Lakes, Canada, and a recipient of The SustainabilityX® Magazine Global 50 Women In Sustainability Awards™ 2024 explores how embracing a circular economy is not only an environmental imperative but an economic one. The article examines how circular business models foster resilience, reduce waste, and open new revenue streams, especially in the face of supply chain disruptions and resource scarcity. Highlighting Canada’s lag in circular adoption, it makes the case for leveraging collaboration and existing infrastructure like the booming thrift economy to build a sustainable, innovative future.
Uncertainty has a way of creeping in, wrapping itself around our thoughts and feeding our worries. It is unsettling, even terrifying—but it also forces us to evolve. It pushes us toward reinvention, opening doors to opportunities we might never have considered otherwise. The fear of the unknown is real, but so is the potential it holds. This is especially true in the shifting landscape of global trade, where tariffs have become powerful tools of economic influence and negotiation. A notable example is the recent imposition of tariffs on Canada by the U.S., followed by subsequent negotiations, underscoring the urgent need to transition to a circular economy. While trade barriers can increase costs and disrupt industries, they also create opportunities to rethink business operations, drive innovation, and strengthen collaboration for long-term sustainability. Embracing a circular economy not only improves waste management but also fosters economic growth, resilience, and environmental sustainability.
The circular economy has always been championed as a solution to the growing issue of waste and resource depletion. It focuses on keeping products, materials, and resources in use for as long as possible, extracting the maximum value from them, and then recovering and regenerating them at the end of each life cycle. But now, more than ever, it is being recognized for its broader potential to create economic value. A recent study by the World Economic Forum (WEF) highlights the significant benefits of circularity, including revenue growth, increased resilience, sustainability, and cost reduction. Moreover, awareness of its importance has surged in recent years. Three years ago, only 40% of executives considered circularity important or extremely important; today, that figure has risen to approximately 75%, with projections reaching around 95% in the next three years. While many businesses worldwide are setting the circularity targets, Canada has lagged behind in adopting sustainable, circular, and low-carbon material strategies. Among the G7 nations, it has the lowest economic productivity from material consumption and the highest per capita material waste emissions—an alarming contradiction to its aspirations for a circular economy. To make meaningful progress, Canada must accelerate efforts to embed circularity into its economic framework. This growing recognition of circularity’s value comes at a pivotal moment as the Canadian government and businesses navigate trade tariffs, supply chain disruptions, and global sustainability commitments. Embracing a circular economy is no longer just an environmental imperative—it is an economic necessity!!
Circularity, it turns out, is not just about reducing waste—it's about driving growth. The growing adoption of circular economy principles is a response to both market pressures and the recognition that linear business models are no longer viable in a world where externalities (such as environmental and social costs) can no longer be ignored. Linear business models follow a take-make-dispose approach, where raw materials are extracted, turned into products, and then discarded after use. These models have been profitable mainly because they don't factor in externalities—hidden costs like pollution, resource depletion, emissions and social impacts, including long term brand reputation. However, as global supply chains face disruptions and raw materials become scarcer and more expensive, this approach is no longer sustainable or economically viable. The circular economy offers a solution by designing products and processes that minimize waste, extend the life of materials, and create value from reuse, recycling, and remanufacturing.
HAVE YOU READ?
Circular business models create value by reducing costs, increasing resilience—both physical and transitional—and opening up new revenue streams. This is particularly important in the context of tariffs and trade tensions, where businesses that have invested in circular practices are better positioned to weather disruptions. However, transitioning from linear to circular business models is not without its challenges. One of the most significant hurdles is the upfront investment required to build new supply chains and infrastructure. Establishing a circular supply chain is complex and demands new expertise, partnerships, multidimensional flow (of information, commodities and money) and the adaptation of existing systems to accommodate circular inputs and processes. This is where collaboration becomes crucial. Instead of building everything from scratch, businesses should look for existing networks or infrastructure that could act as transaction points for a circular supply chain. By leveraging these resources, businesses can reduce the financial burden of initial investments while tapping into the benefits of circularity. This approach not only saves time and money but also offers long-term environmental and financial rewards, positioning companies for growth and sustainability.
The power of collaboration cannot be overstated. Circularity thrives on partnerships and the co-creation of value. For example, businesses can maximize revenue and establish circular supply chains by leveraging existing thrift infrastructures instead of building costly new transaction points from scratch. The secondhand market, valued at $405.5 billion in 2023 and projected to reach $1.3 trillion by 2031 with a healthy compound annual growth rate (CAGR) of 13.6%, presents a lucrative opportunity across diverse categories, from apparel and furniture to electronics, automobiles and beyond. With 90% of Canadian consumers already engaging with thrift stores, businesses can seamlessly integrate into this established ecosystem, saving significant capital investment in infrastructure while tapping into a growing market. By partnering with thrift organizations, companies can efficiently manage retail waste, including returns and unsold inventory, ensuring products remain in circulation rather than being discarded. This reduces landfill waste, decreases demand for virgin raw materials, and lowers emissions associated with new production, waste generation and storage.
Additionally, thrift organizations reinvest their earnings into social impact initiatives such as job training, employment programs, and community development, creating a dual-purpose model that benefits both businesses and society. Moreover, businesses can implement take-back programs, refurbishment initiatives, and co-branded resale ventures through these established thrift channels, further boosting revenue without the burden of creating standalone resale infrastructure. As sustainability continues to drive consumer choices, integrating thrift partnerships into supply chains offers a cost-effective, scalable, and socially responsible way to build resilience while capitalizing on the booming circular economy.
The implementation of tariffs and the broader global trade challenges serve as a reminder that the goal posts have changed. Linear business models no longer make sense in a world facing resource scarcity, climate change, and geopolitical tensions. The circular economy is the only model that makes mid- to long-term sense, offering not only environmental benefits but also the potential for business growth, resilience, and innovation.
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The SustainabilityX® Magazine is an award-winning, digital, female-founded, and female-led non-profit initiative bringing the environment and economy together for a sustainable future through dialogue, and now transforming the environment and economy for a sustainable future through the power of women's leadership. Founded on May 8, 2016, and inspired by the United Nations' Sustainable Development Goals by Canada's Top 30 Under 30 in Sustainability Leadership awardee, Supriya Verma, the digital media initiative focuses on approaching the world's most pressing challenges with a holistic, integrated, systems-based perspective as opposed to the traditional and ineffective siloed approach with a single lens on interdisciplinary topics like climate and energy. This initiative ultimately seeks to explore how to effectively bring the environment and economy together through intellectual, insightful dialogue and thought-provoking discussion amongst individuals across sectors taking an interdisciplinary and integrated approach to untangling the intricate web of sustainability while championing women's leadership in sustainability.
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