There have long been calls from industry for guidance in implementing strategies for sustainable development. The Circular Economy represents the most recent attempt to conceptualize the integration of economic activity and environmental wellbeing in a sustainable way. This set of ideas has been adopted by China as the basis of their economic development (included in both the 11th and the 12th ‘Five Year Plan’), escalating the concept in minds of western policymakers and NGOs. This paper traces the conceptualisations and origins of the Circular Economy, tracing its meanings, and exploring its antecedents in economics and ecology, and discusses how the Circular Economy has been operationalized in business and policy. The paper finds that while the Circular Economy places emphasis on the redesign of processes and cycling of materials, which may contribute to more sustainable business models, it also encapsulates tensions and limitations. These include an absence of the social dimension inherent in sustainable development that limits its ethical dimensions, and some unintended consequences. This leads us to propose a revised definition of the Circular Economy as “an economic model wherein planning, resourcing, procurement, production and reprocessing are designed and managed, as both process and output, to maximize ecosystem functioning and human well-being”.
This is a preview of subscription content, log in to check access.
Buy single article
Instant access to the full article PDF.
Price includes VAT for USA
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
This is the net price. Taxes to be calculated in checkout.
Ball, A., Owen, D. L., & Gray, R. H. (2000). External transparency or internal capture? The role of third party statements in adding value to corporate environmental reports. Business Strategy and the Environment, 9, 1–23.
Banerjee, S. B. (2012). A climate for change? Critical reflections on the durban united nations climate change conference. Organization Studies, 33(12), 1761–1786.
Besio, C., & Pronzini, A. (2014). Morality, ethics, and values outside and inside organizations: An example of the discourse on climate change. Journal of Business Ethics, 119(3), 287–300. doi:10.1007/s10551-013-1641-2.
Bilitewski, B. (2007). Circular Economy in Germany. In Eleventh International Waste Management and Landfill Symposium, 1–5 October 2007, Cagliari, Italy.
Boulding, K. E. (1966). The economics of coming spaceship earth. In H. Jarret (Ed.), Environmental quality in a growing economy. Baltimore, MD: John Hopkins University Press.
Cameron, J. I. (1997). Applying socio-ecological economics: A case study of contingent valuation and integrated catchment management. Ecological Economics, 23, 155–165.
Chertow, M. R., & Lombardi, D. R. (2005). Quantifiying economic and environmental benefits of collocated firms. Environmental Science and Technology, 39, 6535–6541.
Christian Aid. (2004). Behind the mask: The real face of corporate social responsibility. London: Christian Aid.
Commission, European. (2014). Towards a circular economy: A zero waste programme for Europe. Brussels: European Commisssion.
Cooper, T. (1999a). Creating an economic infrastructure for sustainable product design. Journal of sustainable product design, 8, 7–18.
Cooper, T. (1999b). Creating an economic infrastructure for sustainable product design. Journal of Sustainable Design, 8, 7–17.
Cropper, M. L., & Oates, W. E. (1992). Environmental Economics: A survey. Journal of Economic Literature, 30, 675–740.
Daly, H. E., & Farley, J. (2004). Ecological economics: Principles and applications. Washington, DC: Island Press.
Dorfman, R. (1993). Some concepts from welfare economics. In R. Dorfman & N. S. Dorfman (Eds.), Economics of the environment: Selected readings (pp. 79–96). New York, NY: W.W. Norton.
Dossa, Z., & Kaeufer, K. (2014). Understanding sustainability innovations through positive ethical networks. Journal of Business Ethics, 119(4), 543–559. doi:10.1007/s10551-013-1834-8.
Ellen Macarthur Foundation (2012). Towards the Circular Economy, vol. 1: Economic and business rationale for a circular economy. Cowes: Ellen Macarthur Foundation.
Ellen Macarthur Foundation (2013). Towards the Circular Economy, vol. 2: Opportunities for the consumer goods sector. Cowes: Ellen Macarthur Foundation.
Ellen Macarthur Foundation (2014). Towards the Circular Economy, vol. 3: Accelerating the scale-up across global supply chains. Cowes: Ellen Macarthur Foundation.
Farigone, J., Hill, J., Tilman, D., Polasky, S., & Hawthorne, P. (2008). Land clearing and the biofuel carbon debt. Science, 319, 1235–1238.
Feng, Z. (2004). An introduction to the circular economy. Beijing: People’s Press.
Feng, W. J., Mao, Y. R., Chen, H., & Chen, C. (2007). Study on development pattern of circular economy in chemical industry parks in China. Xiandai Huagong/Modern Chemical Industry, 27(3), 7–10.
Fischer-Kowalski, M., & Haberl, H. (1998). Sustainable development: Socio-economic metabolism and colonization of nature. International Social Science Journal, 50, 573–587.
Fitzherbert, E. B., Struebig, M. J., Morel, A., Danielsen, F., Brühl, C. A., Donald, P. F., et al. (2008). How will oil palm expansion affect biodiversity? Trends in Ecology & Evolution, 23, 538–545.
Gale, D. (1989). The theory of linear economic models. Chicago, IL: University of Chicago Press.
Gardner, G. (1997). Shrinking fields, crop loss in a world of eight billion. Washington, DC: Worldwatch Institute.
Geng, Y., Fu, J., Sarkis, J., & Xue, B. (2012). Towards a national circular economy indicator system in China: An evaluation and critical analysis. Journal of Cleaner Production, 23(1), 216–224.
Geng, Y., Zhang, P., Côté, R. P., & Qi, Y. (2008). Evaluating the applicability of the Chinese eco-industrial park standard in two industrial zones. International Journal of Sustainable Development and World Ecology, 15, 1–10.
Ghisellini, P., Cialani, C., & Ulgiati, S. (2014). Circular economy: State of the art, promises and expectations. A review. Working papers in transport, tourism, information technology and microdata analysis (pp. 39). Sweden: Dalarna University.
Gray, R. (2002). Of messiness, systems and sustainability: towards a more social and environmental finance and accounting. The British Accounting Review, 34(4), 357–386.
Gray, R. (2006). Does sustainability reporting improve corporate behaviour?: Wrong question? Right time? Accounting and Business Research, 36 (SPEC. ISS), (pp. 65–88).
Gray, R., Adams, C., & Owen, D. (2014). Accountability, social responsibility and sustainability: Accounting for society and the environment. London: Pearson.
Gray, R., & Bebbington, J. (2001). Accounting for the environment. London: Sage.
Gray, R. H., Kouhy, R., & Lavers, S. (1995). Corporate social and environmental reporting: A review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing and Accountability Journal, 8(2), 47–77.
Gray, R. H., Owen, D., & Adams, C. (1996). Accounting and accountability: Changes and challenges in corporate social and environmental reporting. London: Prentice Hall.
Greyson, J. (2007). An economic instrument for zero waste, economic growth and sustainability. Journal of Cleaner Production, 15(13–14), 1382–1390. doi:10.1016/j.jclepro.2006.07.019.
Haynes, K., & Murray, A. (2015). Sustainability as a lens to explore gender equality: A missed opportunity for responsible management. In P. Flynn, K. Haynes, & M. Kilgour (Eds.), Integrating gender equality into management education. Greenleaf: Sheffield.
Hester, P. T., & Adams, K. M. (2014). Systemic thinking: Fundamentals for understanding problems and messes. New York: Springer.
Hill, J. E. (2014). The circular economy: From waste to resource stewardship, part 1. Proceedings of the Instution of Civil Engineers, 168(1), 3–13. doi:10.1680/warm.14.00003.
HM Government. (2014). Growing a circular economy: Ending the throwaway society: Government response to the Committee’s Third Report of Session 2014–2015—Eighth Special Report of Session 2014–2015. London: HMSO.
House of Commons Environmental Audit Committee. (2014). Growing a circular economy: Ending the throwaway society. London: HMSO.
Hu, J., Xaio, Z., Deng, W., Wang, M., & Ma, S. (2011). Ecological utilization of leather tannery waste with circular economy model. Journal of Cleaner Production, 19, 221–228.
IPCC. (2007). Fourth assessment report. Geneva: WMO/Intergovernmental Panel on Climate Change.
Jacobs, M. (1996). What is socio-ecological economics? Ecological Economics Bulletin, 1, 14–16.
Jaffe, D. A. (1992). The nitrogen cycle. In S. S. Butcher, R. J. Charlson, R. J. Orians, & G. V. Wolfe (Eds.), Global biogeochemical cycles (pp. 301–315). San Diego, CA: Academic Press.
Jahnke, R. A. (1992). The phosphorus cycle. In S. S. Butcher, R. J. Charlson, R. J. Orians, & G. V. Wolfe (Eds.), Global biogeochemical cycles (pp. 301–315). San Diego, CA: Academic Press.
Junior, R., Best, P., & Cotter, J. (2014). Sustainability reporting and assurance: A historical analysis of a world-wide phenomenon. Journal of Business Ethics, 120(1), 1–11. doi:10.1007/s10551-013-1637-y.
Keeling, R. F., Najjar, R. P., Bender, M. L., & Tans, P. P. (1993). What atmospheric oxygen measurements can tell us about the global carbon cycle. Global Biogeochemical Cycles, 7, 37–67.
KPMG. (2005). International survey of corporate responsibility reporting 2005. Amsterdam: KPMG International.
KPMG. (2008). International survey of corporate responsibility reporting 2008. Amsterdam: KPMG International.
KPMG. (2011). International survey of corporate responsibility reporting 2011. Amsterdam: KPMG International.
KPMG. (2013). The KPMG survey of corporate responsibility reporting. Amsterdam: KPMG International.
Lancaster, M. (2002). Principles of sustainable and green chemistry. In J. Clark & D. Macquarrie (Eds.), Handbook of green chemistry and technology (pp. 10–27). Oxford: Blackwell.
Lélé, S. (1991). Sustainable development: A critical review. World Development, 19(6), 607–621.
Liu, Q., Li, H.-M., Zuo, X.-L., Zhang, F.-F., & Wang, L. (2009). A survey and analysis on public awareness and performance for promoting circular economy in China: A case study from Tianjin. Journal of Cleaner Production, 17, 265–270.
Mason, R. O., & Mitroff, I. I. (1981). Challenging strategic planning assumptions: Theory, cases, and techniques. New York: Wiley.
Mathews, M. R. (1995). Social and environmental accounting: A practical demonstration of ethical concern? Journal of Business Ethics, 14(8), 663–671.
Mathews, J. A., & Tan, H. (2011). Progress towards a circular economy in China: The drivers (and inhibitors) of eco-industrial initiative. Journal of Industrial Ecology, 15, 435–457.
McDonough, W. (2002). Cradle to cradle: Remaking the way we make things. New York: North Point Press.
Meadows, D. H., Meadows, D. L., & Randers, J. (1992). Beyond the limits. Post Mills, VT: Chelsea Green Publishing.
Meadows, D., Randers, J., & Meadows, D. (2004). Limits to growth: The 30-year update. London: Earthscan.
Moriguchi, Y. (2007). Material flow indicators to measure progress toward a sound material-cycle society. Journal of Material Cycles and Waste Management, 9(2), 112–120. doi:10.1007/s10163-007-0182-0.
Muir, J., Reidinger, R., & Chan, Y. M. Capturing Sustainability Issues in the Oil and Gas Industry. In International Conference on Health, Safety and Environment in Oil and Gas Exploration and Production, 2002/2002 (pp. 718–724).
Murray, J. W. (1992). The oceans. In S. S. Butcher, R. J. Charlson, R. J. Orians, & G. V. Wolfe (Eds.), Global biogeochemical cycles (pp. 176–211). San Diego, CA: Academic Press.
Nakajima, N. (2000). A vision of industrial ecology: State-of-the-art practices for a circular and service-based economy. Bulletin of Science Technology Society, 20, 154–169.
O’Dwyer, B. (2003). Conceptions of corporate social responsibility: The nature of managerial capture. Accounting, Auditing and Accountability Journal, 16(4), 523–557.
Parkins, E. (1930). The geography of American geographers. The Journal of Geography, 33(9), 229.
Pauchant, T. C., & Mitroff, I. I. (1990). Crisis management: Managing paradox in a chaotic world. Technological Forecasting and Social Change, 38(2), 117–134.
Pearce, D. W., & Turner, R. K. (1990). Economics of natural resources and the environment. Hemel Hempstead, Herts: Harvester Wheatsheaf.
Pimentel, D. (1998). Energy and dollar costs of ethanol production with corn. In Hubbert Center Newsletter Golden, CO, 1998 (Vol. 98/2, pp. 1–7). Ojai: Hubbert Center for Petrolium Supply Studies.
Pitt, J. (2011). Beyond sustainability? Designing for a circular economy. http://www.ort.org/uploads/media/10th_Hatter_booklet.pdf. Accessed 29 Feb 2012.
Preston, F. (2012). A global redesign: Shaping the circular economy. London: Chatham House: The Royal Institute of International Affairs.
Quesney, F. (1972). Tableau Économique, 1758-59 Editions. London: MacMillan.
Robèrt, K.-H. (1991). The physician and the environment. Reviews in Oncology. European Organisation for Research and Treatment of Cancer, 4(2), 1–3.
Robinson, J. (2004). Squaring the circle? Some thoughts on the idea of sustainable development. Ecological Economics, 48, 369–384.
Røpke, I. (2004). The early history of modern ecological economics. Ecological Economics, 50, 293–314.
Røpke, I. (2005). Trends in the development of ecological economics from the late 1980s to the early 2000s. Ecological Economics, 48, 262–290.
Rostow, W. W. (1960). The stages of growth: A non-communist manifesto. Cambridge: Cambridge University Press.
Russo, A., & Tencati, A. (2009). Formal vs. informal CSR Strategies: Evidence from Italian micro, small, medium-sized, and large firms. Journal of Business Ethics, 85, 339–353.
Schlesinger, W. H. (1993). Biogeochemistry: An analysis of global change. San Diego, CA: Academic Press.
Schneider, A. (2015). Reflexivity in sustainability accounting and management: Transcending the economic focus of corporate sustainability. Journal of Business Ethics, 127(3), 525–536.
Schumacher, E. F. (1973) Small is beautiful: A study of economics as if people mattered. London: Abacus.
Shen, M. H. (2007). Recourse and environment economics. Beijing, China: China Environmental Science Press.
Siegenthaler, U., & Sarmiento, J. L. (1993). Atmospheric carbon dioxide and the ocean. Nature, 365, 119–125.
Simmonds, P. L. (1862). Undeveloped substances: or, hints for enterprise in neglected fields. London: Robert Hardwicke.
Skene, K. (2011). Escape from bubbleworld: Seven curves to save the earth. London: Hardwicke.
Skene, K., & Murray, A. (2015). Sustainable economics: context, challenges and opportunities for the 21st century practitioner. Sheffiled: Greenleaf.
Smart, B. (1992). Industry as a metabolic activity. Proceedings of the National Academy of Sciences, 89, 804–806.
Smith, J. G., & Phillips, B. L. (2006). Toxic tucker: the potential impact of cane toads on Australian reptiles. Pacific Conservation Biology, 12(1), 40–49.
Stahel, W. R., & Reday-Mulvey, G. (1976). Jobs for tomorrow: The potential for substituting manpower for energy. Brussels, European Commission: DG Manpower.
Stott, P. A., Gillett, N. P., Hegerl, G. C., Karoly, D. J., Stone, D. A., Zhang, X., et al. (2010). Detection and attribution of climate change: a regional perspective. Wiley Interdisciplinary Reviews: Climate Change, 1(1), 1–20.
Su, B., Heshmati, A., Geng, Y., & Yu, X. (2013). A review of the circular economy in China: moving from rhetoric to implementation. Journal of Cleaner Production, 42, 215–227.
Triebswetter, U., & Hitchens, D. (2005). The impact of environmental regulation on competitiveness in the German manufacturing industry: A comparison with other countries of the European Union. Journal of Cleaner Production, 13, 733–745.
UN (2014). Annual country data. http://data.un.org/CountryProfile.aspx?crName=CHINA. Accessed 28 January 2015 2014.
UNEP. (2006). Circular Economy: An alternative for economic development. Paris: UNEP DTIE.
UNEP (2012). GEO5 Global Environmental Outlook: Environment for the future we want. United Nations Environment Programme.
Von Bertalanffy, L. (1950). An outline of general systems theory. British Journal for the Philosophy of Science, 1(2), 134–165.
WCED. (1987). Our common future. Oxford: Oxford University Press.
Wu, J. S. (2005). New circular economy. Beijing: Tsinghua University Press.
Wu, H. Q., Shi, Y., Xia, Q., & Zhu, W. D. (2014). Effectiveness of the policy of circular economy in China: A DEA-based analysis for the period of 11th five-year-plan. Resources, Conservation and Recycling, 83, 163–175.
WWF. (2010). Living planet report 2010: Biodiversity. WWF International: Biocapacity and Development.
WWF. (2012). Living Planet Report 2012: Biodiversity, biocapacity and better choices. Gland: WWF International.
Xue, B., Chen, X.-P., Geng, Y., Guo, X.-J., Lu, C.-P., Zhang, Z.-L., et al. (2010). Survey of officials’ awareness on circular economy development in China: Based on municipal and county level. Resources, Conservation and Recycling, 54, 1296–1302.
Yang, S., & Feng, N. (2008). A case study of industrial symbiosis: Nanning Sugar Co., Ltd. in China. Resources, Conservation and Recycling, 52, 813–820.
Yuan, Z., Bi, J., & Moriguichi, Y. (2006). The circular economy: a new development strategy in China. Journal of Industrial Ecology, 10, 4–8.
Yuan, Z. W., & Shi, L. (2009). Improving enterprise competitive advantage with industrial symbiosis: Case study of a smeltery in China. Journal of Cleaner Production, 17, 1295–1302.
Zhang, B., Bi, J., Fan, Z. Y., Yuan, Z. W., & Ge, J. J. (2008). Eco-efficiency analysis of industrial system in China: A data envelopment analysis approach. Ecological Economics, 68, 306–316.
Zhang, H., Feng, J., Zhu, W., Liu, C., Xu, S., Shao, P., Wu, D., Yang, W., & Gu, J. (2000). Chronic toxicity of rare-earth elements on human beings. Biological Trace Element Research, 73(1), 1–17.
Zhang, H., Hara, K., Yabar, H., Yamaguchi, Y., Uwasu, M., & Morioka, T. (2009). Comparative analysis of socio-economic and environmental performances for Chinese EIPs: Case studies in Baotou, Suzhou, and Shanghai. Sustainability Science, 4, 263–279.
Zhang, L., Yuan, Z., Bi, J., Zhang, B., & Liu, B. (2010). Eco-industrial parks: National pilot practices in China. Journal of Cleaner Production, 18, 504–509.
Zhijun, F., & Nailing, Y. (2007). Putting a circular economy into practice in China. Sustainability Science, 2(1), 95–101. doi:10.1007/s11625-006-0018-1.
Zhou, K., Bonet Fernandez, D., Wan, C., Denis, A., & Juillard, G.-M. (2014). A study on circular economy implementation in China. Working Papers 2014-312 (pp. 13). Paris: IPAG Business School.
About this article
Cite this article
Murray, A., Skene, K. & Haynes, K. The Circular Economy: An Interdisciplinary Exploration of the Concept and Application in a Global Context. J Bus Ethics 140, 369–380 (2017). https://doi.org/10.1007/s10551-015-2693-2
- Circular Economy
- Closed-loop economy
- Sustainable development