How the circular economy can revive the Sustainable Development Goals

With progress on the UN’s Sustainable Development Goals (SDGs) badly off track, international policymakers are scrambling for solutions that can both revitalize the current SDG agenda and drive more effective action on humanity’s big challenges in the future. The ‘circular economy’ offers clear potential in this area. This wide-ranging concept, which involves making economies less wasteful and less resource-intensive while contributing to human development and well-being, could hold the key to accelerating SDG delivery. A more formal role within the SDGs and any emerging post-2030 successor regime would also provide a catalyst for expansion of the circular economy itself.

This paper, launched at the UN Summit for the Future 2024 in Ney York, explores how the circular economy could support each of the 17 SDGs, and argues for the concept to be put at the heart of emerging plans to drive sustainable development towards 2050. Doing so could help to foster resilient economies, reduce environmental impacts and ensure equitable resource distribution.

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To address these challenges, this paper proposes solutions and ideas in two parts. The first part covers the period to 2030, the UN’s currently envisioned deadline for achieving the SDGs. The second focuses on 2030–50, a period during which the SDGs may be extended (most likely in modified form) or replaced with new goals as part of a refreshed sustainable development agenda.

In terms of immediate action on salvaging the SDGs between now and 2030, we have identified five priority areas for international collaboration on the circular economy. These proposed actions draw on input from stakeholder workshops and consultations with participants from Africa, Asia, Europe and Latin America, and are intended for a varied audience of multilateral institutions, governments and businesses. With the 2030 SDG deadline approaching, work on implementing these recommendations would need to begin immediately. The five priorities are as follows:

1. Embed principles of justice and inclusivity in circular economy development.

This is more than a moral imperative; it is a pragmatic necessity both for engagement with the UN system, where such values already underpin the SDGs, and for achieving political and popular support around the world for the economic reforms implied by the circular economy. Key tasks include rectifying environmental injustices such as illegal dumping of waste in low- and middle-income countries, providing decent work and meaningful employment, and consulting a wide range of countries and stakeholders on the design of circular economy policies.

Other recommendations include establishing UN guidelines on social equity in the circular economy; setting up a platform under the UN’s Economic and Social Council (ECOSOC) to facilitate sharing of expertise and best practices of Indigenous communities; and launching a global information campaign on the benefits of the circular economy.

2. Enhance global policy coordination on the circular economy.

A multilateral or intergovernmental policy coordination mechanism is needed to help governments develop and implement national circular economy roadmaps. One option would be to establish a cross-sectoral circular economy alliance between UN development agencies. Such an alliance could work with national governments, multilateral development banks (MDBs), the private sector and civil society to offer guidelines, best-practice examples and technical knowledge. The Global Alliance on Circular Economy and Resource Efficiency (GACERE) – which currently consists of just 16 countries plus the EU – could conceivably be repurposed and expanded for this role.

Another option would be to set up an international resource agency, akin to the International Energy Agency (IEA) in some respects but with a mandate specific to material resources and the circular economy. Additionally, the G7 and G20 should be encouraged to increase their ambition on the circular economy and to align policy in areas such as product and producer standards. International coordination between environmental agendas could also be improved by applying circular economy principles to achieve the targets set in multilateral environmental agreements such as the Convention on Biological Diversity and the Paris Agreement on climate change.

3. Reform the global financial architecture.

Scaling up the circular economy will require significant investment. At present, the circular economy is poorly integrated into the global financial architecture, and thus largely off the radar of many investors or perceived as too risky. Creating a circular economy-specific framework for international financial institutions could facilitate development of investment taxonomies, financial benchmarks and technical criteria that would underpin the funding of projects, technologies and business models at scale.

Multilateral development finance – though historically focused on ‘linear’ economic models – also has a role to play in de-risking circular economy investments. The ongoing reform of MDBs presents an opportunity to embed circularity principles in international public finance. Most fundamentally, MDBs will need to increase their lending capacity and adjust their mandates to allow the financing of global public goods. A Global Circular Economy Fund, financed through public sources and modelled on the Green Climate Fund, could also be set up to mobilize private capital, concentrating on low- and middle-income countries that might otherwise struggle to attract financing for their circular economy transitions.

4. Rewire the global trade system.

Changes in policy and regulation are needed to support circular economy-enabling trade while preventing problems such as the illegal dumping of waste and trade in goods that inhibit the circular economy. Reconfiguring global supply chains to be circular in nature will require policies and regulations to streamline trade in many kinds of goods and services, including: remanufacturing and recycling equipment; second-hand goods; secondary raw materials; non-hazardous scrap and industrial residues; and design, rental and repair services. ‘Trusted circular trader’ schemes could be established to reduce red tape, pre-certifying circular economy-compliant exporters. ‘Resource recovery lanes’ similar to customs green lanes could expedite documentation for shipments of secondary raw materials.

Technical cooperation to make circular trade compatible with the World Customs Organization’s Harmonized System (HS) codes is also needed. Finally, the informal circular economy working group hosted by the WTO’s Trade and Environmental Sustainability Structured Discussions (TESSD) would benefit from more formal status.

5. Develop shared standards and metrics.

Common standards and metrics will be crucial to expanding the circular economy worldwide, and to reducing policy and regulatory fragmentation. In addition to supporting disclosures by businesses and organizations, new metrics will be needed for monitoring and reporting the circular economy’s aggregate impact on other multilateral environmental agreements, such as the Paris Agreement on climate change and the upcoming binding instrument to end plastic pollution by 2040. A circular economy-specific taxonomy of standards will need to cover many different areas, including product design, procurement, cleaner production, supply-chain transparency and traceability, and financial performance.

The recent publication of the first tranche of ISO 59000 standards on the circular economy is a step forward, but micro, small and medium-sized enterprises (MSMEs) in particular may need support on compliance costs. The new voluntary Global Circularity Protocol (GCP), launched in 2023, could drive the development of universal metrics for assessing circularity.

Most of the SDGs will not be achieved by 2030. Only 17 per cent of the SDG targets are on track to be met globally by 2030. Some prominent voices propose that, instead of abandoning or replacing the SDGs, the UN should revise the current set of targets and extend the SDG framework to 2050. To provide ideas in this area, the paper presents an indicative, longer-term policy blueprint to be considered in the context of a possible extended or revised SDG framework post-2030. Specifically, we propose a set of circularity targets in 17 categories for 2050, and corresponding levers and actions for achieving them.

Each category of target is mapped to one of the 17 SDGs. For example, for SDG 1 (‘No poverty’), our proposed targets envisage the circular economy providing affordable basic services to the poor, and sustaining local businesses that can help make communities resilient to economic shocks and environmental disasters. For SDG 7 (‘Affordable and clean energy’), we propose actions that would enable societies to achieve full, affordable access to renewable and circular energy systems. Under this target, most critical materials would be supplied through secondary sources or substituted with alternative materials – highlighting the importance of circularity in ensuring that the resource demands of the energy transition are reduced as much as possible.

To enshrine circular economy principles more prominently in the next set of goals post-2030, we recommend several steps:

1. Introduce a specific high-level objective, within the extended post-2030 SDG framework, that recognizes the transformative potential of the circular economy for global development and for addressing the triple planetary crisis.

2. Explicitly outline ambitious but achievable global targets related to reducing unsustainable resource use, reducing global waste generation, and enhancing circularity rates for key resources and materials.

3. Ensure that circular economy targets are integrated across all SDGs, emphasizing the interconnectedness of sustainable resource management with economic, social and environmental objectives.

4. Align the post-2030 framework and circular economy targets with the ‘Beyond GDP’ initiative that forms part of the UN secretary-general’s ‘Our Common Agenda’ vision.

5. Develop clear, measurable indicators for inclusive circular economy practices with specific relevant targets for 2050.