A new study, led by King’s Business School, has claimed that some circular economy strategies can actually increase greenhouse gas emissions, rather than reduce them.
The study, Reconciling Circular Economy and Net Zero: Firm Capabilities to Resolve Sustainability Tensions, which was published in the British Journal of Management, presents a framework to assess how efforts to reduce waste and switch to alternative materials can impact net zero strategies.
The framework was developed in collaboration with researchers from Imperial College London, the University of Greenwich, the University of Essex, the University of Bath and Oregon State University.
‘Managing the trade-offs’
“Different sustainability goals are often treated as if they naturally align,” commented Professor Jonatan Pinkse, research director at the Centre for Sustainable Business, King’s Business School. “In practice, firms face real tensions. Managing those trade-offs is key to reducing environmental impact.”
The study cites The LEGO Group an example, pointing to the toy manufacturer’s efforts to switch to plant-based plastics as an alternative to fossil fuel-based materials.
While this move was intended to support its sustainability goals, the materials proved challenging to scale while maintaining product durability, and as a result, the changes did not automatically reduce emissions.
The issue is not unique to LEGO, with the researchers noting that producing and processing material alternatives can often require more energy, highlighting a ‘trade off’ faced by firms trying to reduce waste and emissions.
‘Vicious’ and ‘virtuous’ cycles
This can lead to two possible outcomes – a ‘vicious cycle’, where firms create new environmental trade-offs when pursuing different goals in isolation, and a ‘virtuous cycle’, where firms redesign products and supply chains in a coordinated way, allowing circular economy and net zero objectives to support each other.
“What matters is how firms manage these ‘vicious’ and ‘virtuous’ tensions,” added Rajat Panwar, professor of Responsible and Sustainable Business at Oregon State University. “Companies need to rethink how products are designed and how supply chains work if they want sustainability goals to reinforce each other.”. Read more here.
