Supply Chain Management: ReTraCE

Realising the Transition to the Circular Economy (ReTraCE)

The Circular Economy (CE) paradigm pushes the frontiers of environmental sustainability by emphasising the idea of transforming products in such a way that there are workable relationships between ecological systems and economic activities. This is achieved by creating a paradigm shift in the design of material flows based on long-term economic growth and innovation focused on the creation of metabolisms that allow for methods of production that are self-sustaining and true to nature, fostering the notion of viewing waste as a biological and technical resource in manufacturing and re-manufacturing. Therefore, the CE paradigm is not just concerned with the reduction of the use of the environment as a sink for residuals or with the delay of cradle-to-grave material flows (as a reductionist view of sustainable supply chain management strategies may suggest).

As stated by the World Business Council for Sustainable Development (WBCSD), the CE paradigm can play a pivotal role in order to achieve the 17 Sustainable Development Goals (SDGs) of the United Nations 2030 Agenda. Finding ways to implement supply chains and production systems inspired by CE principles has therefore become important if the boundaries of environmental sustainability have to be extended. This is particularly relevant in the European context, in which, for a long time, economic growth has been driven by substantial depletion of natural resources and degradation of ecosystems, also resulting in adverse impacts on humans.

However, the idealistic paradigm of the Circular Economy might also be its Achilles’ heel. Indeed, many scholars have argued that in the European context, mainly dominated by free-market ideologies, companies are already capturing most of the economically attractive opportunities to recycle, remanufacture and reuse.

An optimal mix of production units can result in the minimisation of waste, emissions and environmental externalities, while realising direct (e.g. revenues from selling by-products, reduced costs from avoided discharge fees or disposal costs, reduced costs deriving from substituting virgin energy and materials with alternative feedstock obtained at lower prices) and indirect (e.g., avoidance of investments, increase of supply security and flexibility, better reputation, innovation, operational resiliency, ability to retain employees) economic advantages. Europe is not leading the way in terms of CE implementation. In the long run, this may result in loss of competitiveness.

From a theoretical point of view, another relevant gap is represented by the fact that, to date, CE research has mainly been characterised by mono-disciplinary approaches mainly related to the Environmental Sciences domain, primarily concerned with the analysis of benefits in terms of physical rather than monetary flows. It appears that the penetration of CE concepts in disciplines such as Engineering, Economics, Management (and, more in general, social sciences) is still in its infancy; the specific geographical focus of many of the contributions published so far also indicates that the penetration of these concepts in the European academic community is at an early stage, despite the increasing media coverage and some attempts to formulate innovative legislations. This seems to suggest that a critical evaluation of the CE paradigm, of its economic, societal and policy implications, and of the outcomes of its implementation (which industrial sectors will benefit the most? Which stakeholders groups can be classified as winners and which one as losers) has not been conducted yet. This represents an urgent and major research gap that will be addressed by this project, which will therefore provide useful insights to policy-makers for evaluating the feasibility of the transition to the CE.

contact persons:

Jayani Ishara Sudusinghe

Felipe Alexandre de Lima

Biman Darshana Hettiarachchi


Further information on the project you will find here.