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ESG and the Circular Economy — Benefits in the Pursuit of a Zero-Waste Society

Blog written for Plant Chicago by Shannon Bergstrom of Zero Waste

For those familiar with zero-waste concepts there’s little argument to the benefits of pursuing a more circular economy that both reduces waste and places a higher value on the raw materials we use. However, for those less familiar, its tenets can appear unrealistic, unobtainable, or simply unaffordable—an inconvenient truth for anyone excited about waste as an opportunity rather than a burden.

The bottom line, however, is that we can’t come even close to achieving a zero-waste society without the participation of a critical mass of the global population. But how does this happen in a world where there are million different priorities all vying for our attention? How can we get people interested in zero waste when consumerism is king? How can we motivate those who know nothing about zero waste to make beneficial changes in their shopping and lifestyle habits?

Here, we look at how zero waste is about much more than simply “doing the right thing”, and why everyone can benefit from an ESG framework designed to build a healthier and more environmentally conscious world.

ESG for the People

We know zero waste isn’t an all-or-nothing endeavor, and nudging people to make even incremental changes, like cutting down on food waste and composting, can have a positive impact. However, we also know that transitioning to a zero-waste society requires more from us than change on an individual level.

No matter what kind of hard work we put in at home, there are bigger actors who bear even greater responsibility. The bottom line is, little progress can be made if our recycling is mismanaged or businesses continue to manufacture products that are nearly impossible to recycle. And what about the habits of the businesses we patronize and their suppliers? How can we shop with confidence and trust businesses to provide ethically and environmentally sound products and services?

This is where ESG investing comes into play.

ESG stands for “environmental, social, governance”, and is a set of standards for evaluating corporate management on how it integrates social and environmental issues into business strategies. These standards are used by potential investors seeking socially- and environmentally-sustainable companies to invest in.

However, ESG companies also offer a reliable and trustworthy marker for consumers, employees, and partners, delivering a quantifiable set of standards that promote both zero waste concepts and circular economies. In short, ESG is a standard that any company labeling itself as sustainable should be striving for.

The ESG framework recognizes businesses that meet performance metrics relating to its environmental commitment to mitigating climate change and increasing sustainability; its social commitment to upholding human rights for employees, local populations, and global citizens; and its corporate governance commitment to things like financial stability, workplace equality, and transparency.

It is clear then, that the ESG framework is both comprehensive and far-reaching, with benefits that go beyond the financial. In fact, it has the potential to revolutionize business practices from the ground up, delivering more equitable and sustainable for all stakeholders—from investors through employees to consumers.

ESG On The Rise

The popularity of ESG investing is growing, with an estimated 25% of investment in the US now being made in companies incorporating ESG. This figure includes some of the world’s most recognizable companies, with Microsoft, Nvidia,, and Best Buy, all achieving the highest triple-A ESG ratings. This boom has led corporations of all sizes to make ESG scoring a major factor in how they do business. But why do investors care about ESG at all?

The answer is risk. A future of climate change-related disasters and increased social issues comes with all sorts of risks: risk of depleted resources, risk of supply chain breakdown, risk of an unhealthy or uneducated workforce, risk of reputational damage in a society of consumers who increasingly demand that companies reflect responsible values. In short, the proliferation of ESG is essentially a sign that investors and corporations are realizing environmental destruction and inequality are bad for business.

Those who have the largest impact on our planet are coming around to the idea that resources are valuable and need to be conserved, and that we can’t keep treating people and the planet as something expendable. Additionally, there is now the realization among corporations and investors that profit and sustainability are not mutually exclusive—making socially- and environmentally-responsible choices is, in itself, a smart investment. Finally, changing attitudes on a consumer level means that businesses not striving for more equitable and sustainable practices are less likely to be tolerated

But how exactly can this improved awareness of corporate environmental responsibility lead to the realization of a zero-waste society? One answer is the circular economy. Striving to minimize waste and seeing material at the end of its lifecycle as a useful resource and potential input, instead of unwanted trash, is a major shift in the way our economy works that can be both a smart move for businesses and make enormous strides towards achieving a zero-waste society.

For example, Plant Chicago works to create jobs and boost the local economy using circular concepts that prize waste as a valuable resource. Raising awareness and education while delivering practical skills to citizens and small businesses through workshops and other events, from home composting to growing mushrooms from used grain or coffee grounds, Plant Chicago turns zero waste theory into real-world results for the entire city.

The Benefits of a Zero Waste Economy

The benefits of incorporating zero waste and circular principles into a system are already clear to many communities and companies who have begun to make changes. And after dealing with rising waste management and public health issues, governments are also beginning to realize the importance of going green by legislating for things like extended producer responsibility.

Shifting to circular systems that facilitate zero waste at the higher levels is vital because, at the moment, it’s genuinely difficult for everyday citizens to make the right choices, even if they want to. ESG seeks to solve this issue by ensuring transparent, sustainable business practices that can be measured and reported, moving the burden of “sustainable choice” away from the consumer, employee, investor, or other stakeholder and back into the hands of the producer—or more succinctly, the waste creator.

Yet this doesn’t mean that efforts to encourage people to make changes on an individual level are all for naught. Raising awareness of zero waste and circular economy concepts is vital to keeping the pressure on producers. The bottom line is, consumers vote with their dollar, and as more people demand sustainability from companies and governments, it becomes more likely that significant change will happen sooner rather than later.

Author Bio

Shannon Bergstrom is a LEED Green Associate, TRUE waste advisor. She currently works at RTS, a tech-driven waste and recycling management company, as a sustainability operations manager. Shannon consults with clients across industries on sustainable waste practices and writes for Zero Waste.

Photo by Science in HD, Unsplash stock photo.


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