|By Sarah Carlson, CFP®, CLU®, ChFC®|
In our previous blog, we discussed what climate change means for our financial and environmental decisions. Today, we'll explore investing in circular economic opportunities.
The goal for a circular economy is simple – the reduction of waste through the circular flow of more efficient products and the maximization of value extracted from resources. This strategy departs from the linear take-make-waste model, which assumes abundant resources that are easily sourced and subsequently cheaply discarded with few ramifications.
Numerous data points suggest the take-make-waste model is unsustainable. In our view, reasons to strive for a more circular economy are wide-ranging, embracing significant environmental and socioeconomic issues.
A linear approach has resulted in the current challenge:
- We take from the earth
- We make an item
- The consumer uses that item
When no longer desired, it is disposed and usually results in discarding and throwing away, which pollutes. Instead, a circular model recycles materials and focuses on reuse before ultimately recycling to continue the cycle.
We believe the circular economy is now a crucial part of the solution, which should not be politicized as it is an issue of public health and life itself. We should all strive for a more sustainable future and should no longer be considered a niche concept with limited application. We are optimistic about how the regulatory landscape will continue to develop. There are demands to place a circular economy at the forefront of green agendas, including using tools such as carbon pricing to encourage a transition away from take-make-waste models.
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Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
All investing involves risk including loss of principal. No strategy assures success or protects against loss.