E - Environmental (Carbon, Energy, Resources, Climate) 5 min read

What is Circular Economy? Definition and Context

Credibility Check & Framework Comparison

To ensure absolute regulatory accuracy and reliability, we verify definitions across leading international frameworks before presenting our synthesized SME context.

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EFRAG / ESRS E5

"An economic system designed to eliminate waste, keep products and materials in use at their highest value, and regenerate natural systems."
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GRI

"A framework aiming to decouple economic growth from resource consumption by maximizing resource efficiency and designing out waste."
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EcoVadis

"Operational practices focused on material circularity, sustainable procurement, waste recycling, and reducing resource consumption across the product life cycle."

ExecutESG Consolidated Definition

Circular Economy

The circular economy is a systemic model of production and consumption designed to eliminate waste and pollution, circulate products and materials at their highest value, and regenerate nature. It contrasts with the traditional linear "take-make-waste" industrial model.

Three Core Principles:

  1. Design Out Waste: Keeping materials in loops through design (cradle-to-cradle).
  2. Keep Products in Use: Extending product lifespans via maintenance, refurbishment, and sharing.
  3. Regenerate Natural Systems: Returning bio-nutrients safely to the biosphere.

SME Relevance & B2B Inbound Action:

Reporting on circular materials and waste recovery rates is a core metric of the EFRAG VSME Basic Module (B2). Build your resource registries and waste tracking records inside Aura Understand.

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