I'm Andrew Morlet.

I'm the chief executive of the Ellen MacArthur Foundation and I'm here in New Zealand, Auckland to visit with the Sustainable Business Network.

[What is the circular economy?]

So a circular economy is often best described in comparison to a linear economy.

And a linear economy is the predominant system that we have today where we take natural resources, and we make products that we only use parts of and we use for a very short period of time before their landfilled or incinerated.

And a circular economy by comparison starts to think about materials, whether they're technical materials or biological materials, and the way in which they flow through an economy and they're kept at high use and that they’re reused and maintained rather than wasted.

So, in a circular economy the notion of waste is eliminated and by design we start to look at the way in which we create products, services, and systems so that products are used and reused again and again and again.

[Why is it important for businesses?]

A circular economy is an important opportunity for businesses because it actually provides opportunities for innovation and new types of product services that are able to deliver to the needs of the public's and customers.

But it also creates relationships that are different, so rather than transactional you can create a service relationship with customers through business models.

You know, the bottom line here is that a circular economy represents a very significant profitable opportunity for business that is currently uncaptured.

And if you think about today's economy, the linear economy which is massively wasteful, if we think about that in terms of an opportunity space, how do we actually increase the utilization of products?

How do we increase the repair, upgrade, reuse, remanufacturing, and ultimately recycling of products and materials in a way that is economically more attractive than a model that is extractive and consumptive, massively wasteful?

The other reason this is attractive we think, and a very attractive opportunity for many product segments is that customers, new Millennials, and digitally enabled customers, becoming much more informed about products, about their impact, about their ability to be repaired, used, and the like.

So customer preferences are playing into this very strongly as well and there's a strong trend we see where customers are starting to favour products that are more able to be reused, repaired, remanufactured, last longer, represent a quality that can be maintained over a period of time.

So there is a buyer values and a customer trend towards these types of products as well.

[What is the new plastics economy?]

The new plastics economy is a way of thinking about plastics as a valuable material in the economy but thinking of them in a system's way that is, you know, today after 40 years of effort in terms of trying to recycle plastics we see that of the 78 million tonnes of packaging that's produced every year, only 14% is collected globally, and only 2% of that actually is returned to the value chain.

So while we've seen a massive growth in the use of plastics and the growth of single-use plastics and plastics and packaging we're not actually capturing the value.

The 80 to 100 million dollars of value in these plastics which is lost every year to the economy through a design of plastics packaging approaches that can be either reused, biodegraded, or captured for reinsertion into the value chain at the end of use.

So the new plastics economy is a way of thinking about plastics that is systems oriented and is about innovation for and rethinking of plastics so that we can actually capture the value of plastics as a material, keep them in flow in the economy, and prevent the negative consequences of plastics escaping into the natural environment.

[Who can adopt the circular economy?]

The Ellen MacArthur Foundation has documented hundreds of cases of small businesses and large businesses who are adopting the circular economy into their businesses, their business models, into the design of their product system services.

And you know, I would encourage you to look at this resource and to see how this can be applied to your own businesses.