The traditional linear supply chain model which is based on the “take, make, and dispose” strategy, includes the extraction of natural resources, production of goods for consumption, and disposal. This open-loop system causes major environmental problems such as waste generation, resource scarcity, and climate change. To address these environmental issues, the concept of the Circular Economy (CE) has emerged.

This policy brief adopts an integrated approach combining CE principles, that are aligned with the United Nations Sustainable Development Goals (SDGs), (particularly with SDG 12, 13, and 8), and with global supply chain management, thus, serving as a transformative solution. Aligned with G20 agendas, the transition to a circular supply chain can help nations achieve major improvements in efficient energy usage, waste management, and resilience to global challenges. The CE concept emphasises using the principles of the 3Rs (Reduce, Reuse, Recycle), sharing, repair, refurbishment, remanufacturing, and regeneration. It reduces dependence on natural resources by reintroducing materials into the production cycle to create value and promote a closed-loop economy model. While developed nations have achieved significant progress in certain areas of environment sustainability such as resource efficiency, waste reduction, and extended producer responsibility, emerging economies continue to face challenges such as inadequate infrastructure, limited economic support, and a lack of standardised systems.

The CE concept requires business entities to reform their value chain cycles and adopt a holistic approach. This framework will help the businesses choose appropriate green alternatives such as adoption of renewable energy and selection of low-carbon transition plans, thus providing a first step to achieving net zero emissions. The policy brief highlights the need for financial assistance for businesses and knowledge sharing through cross-border collaborations, emphasising the value of cooperation, compliance, resource sharing, and technical innovation in advancing a global paradigm for circular supply chains. This economic transformation from an open-loop system to a closed-loop production system will lead to a robust, sustainable, and equitable global supply chain management system, thus promoting environmental sustainability and inclusive growth.