BUILDING SUSTAINABLE BUSINESSES FIT FOR A SUSTAINABLE WORLD 56 The circular economy framework offers businesses the opportunity to flourish in the 21st century. Rather than remaining trapped in the frustrations of volatile energy prices, environmental degradation and regulatory constraints, businesses can redefine their relationship with materials, energy and citizens, gaining a competitive advantage, and contributing to an economic system that actually builds prosperity and capital, rather than merely extracting it. A circular economy is one that is restorative and regenerative by design, and which aims to keep products, components and materials at their highest utility and value at all times, distinguishing between technical and biological cycles. Businesses will need to start by understanding the principles of this framework, and considering how their activities can support these goals. 1.  Preserve and enhance natural capital by controlling finite stocks and balancing renewable resource flows. When using resources, businesses should select them wisely and choose technologies and processes that use renewable or better-performing resources, where possible. Businesses should also seek to build natural capital by encouraging flows of nutrients within the system and creating the conditions for regeneration of, for example, soil. 
 2.  Optimise resource yields by circulating products, components, and materials at the highest utility at all times in both technical and biological cycles. This means designing for remanufacturing, refurbishing, and recycling to keep components and materials circulating in and contributing to the economy. Circular systems use tighter, inner loops whenever they preserve more energy and other value, such as embedded labour. 
 3.  Foster system effectiveness by revealing and designing out negative externalities. Today’s economy doesn’t account for externalities, such as land use, air, water and noise pollution, release of toxic substances and climate change. An economic system that reduced damage to human utility, and considered these negative impacts throughout the supply chain could support regenerative and restorative practices. 
 These principles describe an economy that could work in the long term, but the Ellen MacArthur Foundation have also defined a range of building blocks; expertise that businesses will need to gain to remain relevant in the changing economy. IT’S TIME FOR A CIRCULAR ECONOMY Expert View