Recent global events highlight the increasingly devasting impacts of human activity. The growing frequency of natural disasters—from wildfires in the United States, Brazil, and Australia to a fierce 2020 hurricane season in the Atlantic and floods and earthquakes across Asia—makes us more aware of the large scale impact of climate change due to human activity. Even the emergence of the novel Coronavirus, which continues to have devasting effects on our societies and economies, and similar animal-to-human transmitted diseases, can be traced back to the negative environmental impacts of our current systems of production and consumption.

Our current linear economic model is one which we have been following since the Industrial Revolution. Under this paradigm, society has created a highly efficient but unsustainable method of extracting resources, producing and consuming products, and discarding them as waste. The scale and magnitude of our global metabolism have increased exponentially, as shown in the figure below. This has forced our society to consistently use resources beyond the Earth’s capacity to supply them.

Increase in global resource consumption since the Industrial Revolution (from Schneider et al., 2019) — *Increase in global resource consumption since the Industrial Revolution (from* *Schneider et al., 2019*)

Shifting towards a Circular Economy

For a while, many have called for a shift from our current linear model towards a more resilient, circular economy. Such an economic model would reduce our resource use and production of waste and negative environmental impacts by prioritizing a more regenerative and closed-loop design in society’s use of resources. There are elements of the circular economy present in the current linear system, but it is very small and there is still a large circularity gap. The gap has only been widening in recent years, as our present global economy has gone from 9.1% circular in 2018 to 8.6% in 2020. There is an urgent need to accelerate our transition towards the circular economy before it is too late. Scientists tell us that we only have 7 years before we burn through our carbon budget and cause irreversible changes to our climate and our ecosystem.

“There is an urgent need to accelerate our transition towards the circular economy before it is too late”

A rapid shift away from our current linear systems towards a more circular one fundamentally requires more widespread adoption of circular economy eco-innovations. Such eco-innovations can enable entire value-chain transformations that incorporate various socio-technical solutions to close resource loops, reduce waste generation, and move towards regenerative and renewable inputs. Through the adoption of circular economy eco-innovations, companies can play a key role in mitigating environmental impact due to the impact of their activities, as well as guide consumption through the supply of environmentally friendly products and services.

However, many barriers hinder the implementation of circular economy eco-innovations. As the figure below shows, there are technological, market, and regulatory barriers to the development and implementation of these innovations. But the most pressing barriers are cultural and sociological, and it is these barriers that are most important to address.

“The most pressing barriers are cultural and sociological, and it is these barriers that are most important to address”

‘Heatmap of Circular Economy Barriers” (from Kirchherr et al., 2017) — *‘Heatmap of Circular Economy Barriers” (from* *Kirchherr et al., 2017*)

Using Economic Sociology to Advance the Circular Economy

The field of Economic Sociology has a lot to contribute towards a better understanding of these cultural barriers. Economic Sociology studies the influence of social patterns and relationships on economic decisions and behaviors. A key concept is the idea of embeddedness, highlighting how the strength and history of relationships between actors, cultural norms set by society, and various beliefs and value systems of these actors—and how they evolve—can influence economic behavior.

From this perspective, the structure and nature of the relationships between companies, consumers, and policymakers have a significant influence on economic decisions, and consequently society’s use of materials and the resulting impacts on the environment. Opinions of consumers towards the environment, policymakers’ beliefs and vision for a sustainable future, manufacturers’ views on reducing their impacts, or suppliers’ response to environmental requirements of customers can all work in tandem and affect their decisions. The cumulative result of these behaviors and interactions determines how we as a society consume non-renewable vs. renewable resources, how much we recycle, and how prepared we are to adopt circular economy thinking. These interactions are highlighted in the Figure below.

Socio-economic embeddedness of the circular economy (from Laurenti et al., 2018) — *Socio-economic embeddedness of the circular economy (from* *Laurenti et al., 2018*)

Role of Embedded Relationships and Key Network Players in Circular Economy Adoption

These embedded relationships between actors in our economic system can play an important role in how value chains and companies adopt circular economy thinking. Given the uncertainty of novel circular economy approaches and eco-innovations, the embedded relationships between firms and different stakeholders – other firms, policymakers, consumers, etc. – are especially important. Firms are influenced by pressures from regulations and customer demands, motivations to stay ahead of their competitors, co-operation with their peers, and industry standards, all of which can dictate whether they adopt eco-innovations and circular concepts.

“These embedded relationships between actors in our economic system can play an important role in how value chains and companies adopt circular economy thinking”

An example of these embedded relationships and pressures is the decision of major hotel chains to move away from single-use plastic toiletries in their hotels towards reusable alternatives. In 2018, Marriott International decided to pilot an initiative with a select group of hotels in North America to replace travel-sized soaps, shampoos, and conditioners by switching to bulk-sized toiletries in an effort to reduce waste and respond to customer demands for sustainability. The next year, in July of 2019, one of Marriott’s biggest competitors, the InterContinental Hotels Group followed suit and announced that it was eliminating single-use bathroom amenities with bulk dispensers from its global chain of hotels. And soon after, in August of 2019, Marriott announced that they were expanding the bulk amenities initiative to all hotels around the world. This shows how customer demands and competitive pressures can lead to significant advancement of sustainable and pro-environmental behaviors by companies.

Understanding and mapping the complex network of embedded social relationships between stakeholders and the pressures they exert on each other opens interesting opportunities to advance circular economy thinking. Having this overview would enable the identification of which actors are centrally located in the network, with the most connections and the strongest influence on changing the behaviors of the other actors in the network. These key players are the ones to get on-board with circular economy eco-innovations or circular economy thinking, as their decisions would diffuse through the network most rapidly or most effectively to create a domino effect that encourages other actors to also adopt the circular economy. An example of this is highlighted in the figure below.

Key players in the network of actors. Convincing BS, BM, and NP to adopt circular economy approaches would ensure that their decisions affect and diffuse through the largest percentage of the network (adapted from Borgatti, 2006)

This has significant implications for policymakers, startups, investors, companies, and NGOs advocating for the transition towards a more circular economy. Rather than spending time and resources trying to get every stakeholder to adopt circular thinking—or alternatively trying to promote circular economy within their small localized network of close collaborators in hopes that it would serve as an example to others—it is imperative to take a broader network perspective.

“It is imperative to take a broader network perspective”

By analyzing the complex embedded relationships and socio-economic links between firms across value chains and how they influence each other’s decisions and by identifying the key players in these networks, valuable time and resources can be devoted to target these key actors to create a cascading effect that more effectively spreads the adoption of circular economy eco-innovations and approaches.

The theories and concepts outlined above serve as the basis for my PhD research. My work aims to bring together theories of Economic Sociology and embedded relationships and networks to identify how firms are connected in inter-firm networks of collaboration, competition, contractual partnerships, etc. And from this analysis, my work tries to identify how these relationships affect the decisions of these firms to adopt circular economy eco-innovations and how such relationships and pressures can be leveraged to more quickly diffuse and spread circular economy thinking. If you are interested in learning more about my research, you can connect with me on LinkedIn or keep updated on my research through ResearchGate.