According to a new report by the United Nations Environment Program (UNEP), a switch towards circular economy can create an annual profit output of about $4.5 trillion by 2030.
A circular economy or circularity is an economic approach created to ensure that consumption and production patterns make use of resources and minimize waste, pollution and carbon emissions.
The shift to circularity can aid in achieving Sustainable Development Goals (SDG) to ensure the health of ecosystems as well as to enable a long-term recovery from the consequences of the pandemic, the report said.
SDGs or Global Goals are a collection of 17 interlinked goals designed to be a “blueprint to achieve a better and more sustainable future for all” which was adopted by the United Nation’s members in 2015.
“The economic recovery from the COVID-19 pandemic is an opportunity to stimulate the urgent transition to more sustainable consumption and production. We need both the private and public sectors to transform our economies to address climate change, reduce pollution and improve resource efficiency.”
Collective action must be accelerated to attain the sustainable development goal of 2030 for which the financial sector and policymakers around the globe have to take the key role in shifting from linear, wasteful growth to embedding circularity in finance.
Several European economies have already started concentrating on green initiatives when formulating economic policy in their countries. In July, the European Central Bank president, Christine Lagarde, highlighted the significance of transmitting every possible avenue to address climate change.
A structural and technological shift will be required for the expansion of circular business models like innovation in the design and manufacturing of products and services, lowering inputs to agriculture, reducing food waste and employing various technologies to increase transparency and sustainability in the supply chain.
Further, the report added that the governments also have to offer the economic sector with incentives and an enabling legislative framework to accelerate the circularity into financial products and services.
Headquartered in Kenya, UNEP is responsible for coordinating the United Nation’s environmental activities and to assist developing countries in implementing environmentally sound policies and practices.