How the ‘circular economy’ could save the planet
World’s largest investment firm launches fund to help eliminate waste and re-use resources

As environmental protesters bring cities around the world to a standstill, one of the world’s largest investment firms has launched a radical new fund to help eliminate waste and change the way goods are consumed.
In partnership with the Ellen MacArthur Foundation, Blackrock’s Circular Economy fund offers ordinary investors the chance to support and profit from the transition away from a “take-make-waste” economy that has created untold problems for the planet.
The prevailing philosophy among businesses for most of the past century, it describes a process in which “companies take resources, make something to sell, and then the product is wasted at the end of its life - at which point there is an opportunity to flog a fresh one”, says Simon Lambert in This is Money.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
“It’s what’s known as the linear economy and can be seen throughout our modern day world: from household appliances and electronics that can’t be fixed, to industrial farming that strips land of nutrients, and plastic packaging that can’t be recycled”, says Lambert.
Driving this is a combination of laziness among consumers and profiteering from companies, with catastrophic consequences for the global environment.
Andrew Morlet, chief executive of the Ellen MacArthur Foundation, said that 45% of the world’s carbon emissions come from how we make and use products and produce what we eat, citing they key areas of plastics, food and fashion.
The problem of waste is particularly stark. At present the world creates two billion tonnes of solid waste a year: this is expected to rise to 3.4 billion tonnes by 2050, according to the World Bank.
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
The circular economy aims to address this “based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems”, says the Ellen MacArthur Foundation.
Some large firms have already moved towards re-aligning their production methods along circular economy lines. Adidas, which aims to use recycled polyester in all shoes by 2024, has made 11 million pairs of shoes from upcycled marine plastic waste. The EU has also embraced the concept: its circular economy strategy, adopted last year, includes a 65% target for recycling and reuse by 2035.
The move towards a circular economy also cuts greenhouse gas emissions as well as waste. A report by the foundation says that for the EU to reach net zero emissions by 2050, emissions from industrial production of cement, plastics, steel and aluminium would have to be cut to almost nothing. By contrast, emissions from these materials could be cut by 40% just by reusing and recycling more of them.
–––––––––––––––––––––––––––––––For a round-up of the most important business stories and tips for the week’s best shares - try The Week magazine. Get your first six issues for £6–––––––––––––––––––––––––––––––
“A new generation of entrepreneurs is trying to do something radical - eliminate waste altogether” says Leslie Hook in the Financial Times.
“We have a real problem right now. About 70% of the stuff people throw out ends up in landfill even though it is perfectly usable,” John Atcheson, chief executive of Stuffstr, told the FT. His start-up buys used goods from customers before reselling or recycles them, depending on the kind of product and its condition.
This is exactly the kind of business Blackrock will be looking to fund.
However, it comes amid accusations the US fund giant, which has over six trillion dollars in assets under management, is looking to “greenwash” its record when it comes to environmentally-sound investments.
In July this year a report from the Institute for Energy Economics and Financial Analysis accused Blackrock of dragging its feet on addressing climate change, claiming that ignoring global climate risk had cost the firm $90bn in value destruction from its investment in just four companies: ExxonMobil, Chevron, Royal Dutch Shell and BP.
Euromoney says the firm “has attracted criticism over its voting record on climate-related shareholder proposals, despite CEO Larry Fink’s several declarations on the importance of tackling climate change and investing sustainably”.
Whatever the motivation, if other firms follow suit, the implications could be huge.
“If the circular economy takes off, then by 2050 purchasing and disposal will be radically different to today,” says Hook. “Imagine buying clothes that last for years, shopping for food using refillable containers or buying a home made with reused material. Today’s world is a long way from that - but it may be starting to shift.”
-
August 24 editorial cartoons
Cartoons Sunday's political cartoons include Putin at Donald Trump's circus, gallons of whitewash, and a foldable cartoon
-
5 Post Office-approved cartoons about mail-in voting
Cartoons Artists take on reverse logic, Putin's election advice, and more
-
The battle of the weight-loss drugs
Talking Point Can Novo Nordisk and Eli Lilly regain their former stock market glory? A lot is riding on next year's pills
-
Cloudbursts: what are the 'rain bombs' hitting India and Pakistan?
The Explainer The sudden and intense weather event is almost impossible to forecast and often leads to deadly flash-flooding and landslides
-
What do heatwaves mean for Scandinavia?
Under the Radar A record-breaking run of sweltering days and tropical nights is changing the way people – and animals – live in typically cool Nordic countries
-
Blue whales have gone silent and it's posing troubling questions
Under the radar Warming oceans are the answer
-
Acid rain is back: the sequel nobody wanted
Under The Radar A 'forever chemical' in rainwater is reviving a largely forgotten environmental issue
-
Why is the world so divided over plastics?
Today's Big Question UN negotiations on first global plastic treaty are at stake, as fossil fuel companies, petrostates and plastic industry work to resist a legal cap on production
-
Tuvalu is being lost to climate change. Other countries will likely follow.
Under the Radar Sea level rise is putting islands underwater
-
Melting glaciers may lead to more volcanic eruptions
Under the radar We're in for a boom
-
Europe's heatwave: the new front line of climate change
In the Spotlight How will the continent adapt to 'bearing the brunt of climate change'?