The circular economy and circular economic concepts—a literature analysis and redefinition

• DOI: http://doi.org/10.1002/tie.21924
• Author: Felicitas Pietrulla,Sylvie Geisendorf
• Date: 01 September 2018
• Published date: 01 September 2018

COMPANIES IN THE CIRCULAR ECONOMY

The circular economy and circular economic concepts—

a literature analysis and redefinition

Sylvie Geisendorf | Felicitas Pietrulla

ESCP Europe Berlin, Germany

Correspondence

Sylvie Geisendorf, ESCP Europe Berlin,

Heubnerweg 8-10, 14059 Berlin, Germany.

Email: sgeisendorf@escpeurope.eu

This article proposes a revised definition of the circular economy after having analyzed and

compared the most prominent related concepts. Based on an analysis of academic literature,

defining characteristics of different concepts are identified to structure the field of research.

The comparison of concepts serves as a basis for the synthesis: a revised definition of the cir-

cular economy. While most concepts overlap, they emphasize different issues. Our classifica-

tion helps to distinguish how concepts are situated in dimensions such as industry/service

oriented, efficiency/zero waste target, or micro/macro scope. The revised definition distin-

guishes between core characteristics of a circular economy and framing conditions enabling its

implementation. It has the potential to support both researchers and practitioners to develop

clearer guidelines for the path to a circular economy.

KEYWORDS

biomimicry, circular business models, circular economy, closed supply chains, cradle to cradle,

reverse logistics

1|INTRODUCTION

The circular economy (CE) is currently one of the most discussed

terms among environmental economic scientists and a focus of the

European Union Horizon 2020 strategy. Its core defining element is

the “restorative use”of resources. Raw materials shall not become

discarded waste. “While great strides have been made in improving

resource efficiency, any system based on consumption, rather than

on the restorative use of resources, entails significant losses along

the value chain”(Ellen MacArthur Foundation, 2015).

The CE is not the only concept proposing circular ideas for eco-

nomic activities. Many other concepts exist without, thus far, a clear

differentiation. A comparison of concepts will not only provide an

overview but also enable the identification of potential improvements

to the current definition of the CE. This research could reveal that

adjoining concepts propose more useful specifications or provide

additional aspects that should be included as well as potential charac-

teristics that should not be part of the core definition.

The aim of this article is thus twofold. First, we want to provide a

review of the CE and closely associated concepts to formulate a com-

mon conceptual ground andunderstanding. Wedevelop a framework of

characteristics for comparison basedon the characteristics found in the

concepts. This will allow for a clear assessment of overlaps and differ-

ences between the concepts. Based onthat review, this articlewill make

a suggestion for an enhanced definition of the CE where some aspects

used in the current most propagated definitions (EllenMacArthur Foun-

dation, 2016; European Commission, 2015) are argued to be boundary

conditionsor enablers rather thancore characteristics,while other, thus

far, neglected aspects should enter the core. This article establishes a

coherent basis for further academic discussion as well as allows practi-

tioners to better understand how they can act within a CE.

During the past years, the term circular economy has gained

increasing attention (Lieder & Rashid, 2016). Because of the per-

ceived urgency for better resource efficiency, academic articles and

practical propositions around the concept of the CE have increased

significantly. Scholars agree that the CE stands in contrast to the lin-

ear economy based on a “take-make-dispose”sequence. However,

the propositions mirror different understandings of what a CE entails

(Ghisellini, Cialani, & Ulgiati, 2016).

While some focus on its potential for employment creation (Pauli,

2010) or the design of circular economic business models (CEBMs)

(Mentink, 2014), or want the CE to include sustainability in a broader

sense (Finkbeiner, Inaba, Tan, Christiansen, & Klüppel, 2006), others

perceive it as an optimization of waste management only (Ghisellini

[The copyright line for this article was changed on 11 July 2018 after original

online publication.]

DOI: 10.1002/tie.21924

Thunderbird Int Bus Rev. 2018;60:771–782. wileyonlinelibrary.com/journal/tie © 2017 Wiley Periodicals, Inc. 771