The destructive power of our economic activities and the unaccounted environmental cost raises the need for governments and leaders to act. As a result, Agenda 2030 has been introduced (among other regulations) which aim to confine current economic activities within social and environmental boundaries. For instance, the EU Taxonomy aims to prevent greenwashing by helping investors make more informed choices about where to put their money. At the same time, even with all these regulations in place, creating real change requires more radical transformation and a rethinking of our economic actions. 

Our current economic system is based on linear principles; it is predominantly concerned with optimisation and cost-benefit efficiency. The core of this model is focused on exploitation, value creation, and inevitably — waste. Given that profoundly unsustainable premise, the solution might lie within a transition towards an economic model based on more sustainable production and consumption. However, there are those who believe that an even more radical shift is required in order to reverse the drastic impact imposed by the status quo and its incompatibility with progressive economics. In this article, we will take a look at one such approach — the degrowth theory – and explore how it is relevant in the current state of the world and human civilisation.

Numerous economists, ecologists and philosophers further reiterated the ideas introduced in those initial sources to further develop theories. As a result, the degrowth theory has come to be defined by a few key principles. First, the majority of the resources that people rely on become accessible through ecosystems and are limited. Therefore, each withdrawal of scarce or non-renewable resources not only causes an irreversible impact on the environment, but also jeopardises the long-term survival of humanity. The conclusion drawn by the theory of degrowth is that infinite growth, both demographic and economic, is impossible given that we live in a finite world. 

When it comes to degrowth, the idea is that we must stop excessive production at the expense of the natural environment and focus on producing better products with less energy. Degrowth has inspired various development principles, such as eco-design, permaculture, and agroecology. It has also contributed to the implementation of tools such as LCA (life cycle analysis) and ESG materiality assessments. These principles and tools help adapt our ecological footprint to match the limited resources available. Ultimately, the main goal of the degrowth movement is to redefine our economic model by putting resilience at its core.

When approached from this angle, the basis of the degrowth theory resembles the principles of a more innovative and relevant economic model — the circular economy. 

In a circular economy, the ultimate goal is to maintain the value of the products and materials for as long as possible. Waste and resource use are minimised, and when a product reaches the end of its life, it can be reused to extend its value. This circular model has the potential to bring major economic benefits; contributing to innovation, growth, and job creation (European Commission, 2015).

A circular economic framework aims to provide a sustainable, low carbon and resource-efficient economy, while also encouraging competitiveness in the long term. In the pursuit of generating sustainable competitive advantage, the circular economy offers numerous benefits. New business opportunities are created by the circular model through more innovation and efficient production and consumption. In doing so, it manages to boost competitiveness and protect businesses, all while promoting resource preservation – especially those that are scarce and subject to volatile prices. Collaboration on the transitional path to a circular economy will cultivate an environment for social integration and cohesion, and create job opportunities at all skill levels. Finally, the circular economy model reveals an untapped energy-saving potential that can help avoid the irreversible damage caused by using up resources at a rate that exceeds the Earth’s capacity to renew them.

To prevent the exhaustion of natural resources without hindering global economic growth, we need to act toward circular transition and break the link between economic well-being and environmental destruction.

Impact Hub Berlin’s mission is to empower entrepreneurs and organisations to create innovative solutions for people and the planet. We can all agree that the world’s greatest challenges will never be solved by one person or organisation alone. That’s why Impact Hub Berlin incorporates a systemic model with four ecosystems. With the uniform goal of accelerating innovation, each of the ecosystems circles around one main impact-driven concept. Diversity and inclusion, green tech, sustainable food ecosystem, and of course, a circular economy.

Sustainability entrepreneurs have a key role to play in making circularity our new reality. Supporting innovative ideas for high-quality and accessible products and services that create zero to minimum waste, the Circular Together programme was created. The programme offers support to ventures that are scaling enterprising initiatives to drive sustainable consumption and production across fashion, food, and technology, among other industries. The Circular Together is intended to help such startups grow, and develop innovative solutions to the outdated economic model by focusing on the circular transition.