Circular Economy

Make production more resource efficient

Economic productivity per unit of resources — or more simply, the extent to which we are able to produce economic value while using less resources and materials — has slowly improved over time. However, current production systems are still using resources inefficiently. From 2000 to 2021, the global GDP increased by 79% but global material productivity, which represents how much economic value is produced per unit of material in weight, increased by only 6%. One critical inefficiency is food production: 13% of food is lost in production and retailing processes. That is, more than one in nine food products goes to waste before consumers even have an opportunity to purchase them. We need to reduce our material consumption per capita by more than half by 2050; one key step is to make production and distribution more resource/material efficient.

For the economy to thrive without exceeding the global environmental capacity, it is necessary to accelerate the increase of global material productivity. This will also help industries improve resource security and mitigate supply risks caused by geopolitical shocks in importing countries. Information about material productivity by sector and commodity should be collected to identify sectors where improvement is most needed.

Material productivity can be improved by using more efficient design and production methods and more responsive distribution methods to reduce waste. Setting national targets and investing in new technologies creates opportunities for new innovations. More than 2,200 companies monitor their resource use and productivity for better accountability. Material productivity can also be improved by sharing unneeded byproducts and wastes between companies. This approach is one of “industrial symbiosis,” in which the byproduct from one facility is used in another facility. Similar symbiosis approaches on an individual company level, for example, in which retailers and restaurants provide unused products and foods to others who can utilize them more, are also important.

Data Insights

What targets are most important to reach in the future?

Systems Change Lab identifies 3 targets toward which to track progress. Click a chart to explore the data.

What factors may prevent or enable change?

Systems Change Lab identifies 4 factors that may impede or help spur progress toward targets. Click a chart to explore the data.

Progress toward targets

Systems Change Lab tracks progress toward 3 targets. target. Explore the data and learn about key actions supporting systems change.

Material productivity

Material productivity, or the economic value resulting from economic activities in a country or region per unit of weight, would have to more than double by 2050 if material consumption does not decrease.

“Material productivity” indicates how much economic value results from economic activities in a country or a region per unit of the weight of materials. It is expressed as real GDP over direct material consumption of the world or a particular country.

Global material productivity has increased slowly from $536 per tonne in 1970 to $794 per tonne in 2021. However, from 2000 to 2021, the productivity increased by only 7%. As explained in the indicator on material footprint per capita, the world needs to reduce global material consumption per capita by more than half by mid-century. Alternatively, if the world did not reduce material consumption at all, it would have to more than double the level of material productivity by 2050.

Acceleration of actions by producers and retailers, such as reducing material inputs and reducing waste in processes, as well as collaborative actions between them, such as using byproducts from other sectors, is necessary to allow the economy to thrive without using more materials.

Material productivity by sector

To improve material productivity, it is important to identify sectors that are doing well and those that are not optimizing material productivity. However, publicly available data is very limited.

Different economic sectors consume materials and produce economic values very differently. To improve material productivity, it is important to identify sectors that are doing well and those that are not optimizing material productivity.

Publicly available national data is very limited; currently, this indicator includes only Japanese data. According to the data, the indicator values for material productivity differed between sectors by more than 100 times. Sectors such as the medical industry created significant value for a given amount of material, while other sectors such as the mining industry created a small economic value with the same amount of materials. Measurement and reporting by corporations and governments are necessary to identify front-runner sectors in the world and identify where improvement is most needed. 

Share of food production lost

Despite efforts to reduce food loss and achieve Sustainable Development Goal (SDG) target 12.3, the share of food production lost has stayed essentially flat from 2016 to 2021, at around 13%.

“Food production lost” or “food loss” is the loss of edible commodities in the production process without any other utilization. This can be caused by improper handling and storage, improper timing of harvesting, oversupply of foods, inadequate demand forecasting and various business conducts.

The aim to reduce food loss was highlighted by Sustainable Development Goal (SDG) target 12.3 in 2015. Since then, many stakeholders have made efforts to reduce the loss. However, the share of food production lost stayed essentially flat from 2016 to 2021, at around 13%. Among 29 regions, only three regions (Southern Asia, Central and Southern Asia, and Micronesia) had improved indicator values in that timeframe, and the improvement rate was only 0.1% to 0.3%. More efforts in all regions of the globe are necessary to achieve the 2030 target of 6.5%.

Enablers and barriers

We also monitor change by tracking a critical set of 4 factors factor that can impede or help spur progress toward targets. Explore the data and learn about key actions supporting systems change.

Number of countries with national targets for material productivity

To increase material productivity and resource productivity, several countries have set numerical targets for improvement in these areas. As of 2019, at least nine countries had such national targets.

Target setting can drive countries to take more actions. To increase material productivity and resource productivity, several countries have set numerical targets for improvement in these areas. As of 2019, at least nine countries had such national targets. For example, Austria aims to improve material productivity 4 to 10-fold by 2050, France aims to increase it by 30% from 2010 to 2030, Germany committed to increasing total raw material productivity at the annual rate of 1.5% from 2010 to 2030, and Japan aims to increase its resource productivity to 490,000 JPY per tonne by 2025, which means a 29% increase from 2015. Such goals should be adopted by other countries. The G20 Information Hub collects the information about targets and indicators used for resource efficiency of these countries.

Ultimately, comparing the ambition level of target setting between countries is not so meaningful, as the value of material productivity depends on country-specific industry structure. Comparing a country to its own productivity over time is more important. Moreover, it is critical to not only set targets, but also monitor progress and implementation.

Number of companies measuring circular economy actions

Companies measuring circular economy actions totalled more than 2,200 as of 2022, but it is crucial to take action as well as measure material productivity.

For companies that want to measure their material use and promote a circular economy, two major initiatives have developed indicators to do so: Circulytics by the Ellen Macarthur Foundation and Circular Transition Indicators​ (CTI) by the World Business Council for Sustainable Development.

Companies using these indicators totaled more than 2,200 as of 2022. Additionally, as of January and February 2024, 4,900 companies supported the Task Force on Climate-Related Financial Disclosure and 320 companies supported the Task Force on Nature Related Climate Disclosure, showing good progress. Other voluntary measurement schemes developed by companies are not included here. To understand the situation comprehensively, it is necessary that such measurements are disclosed and a centralized data platform is created to compile the data in a comparable way.

It is crucial to not only measure material productivity, but to also take action. Setting sectoral benchmarks through a government or an industrial organization can also stimulate corporate action and advance the identification of good practices.

Number of industrial initiatives with symbiosis

Industrial symbiosis focuses on utilizing something other companies produce as waste to replace the use of natural resources.

Waste from one industrial facility is not necessarily waste for another facility. If a company utilizes something that other companies produce as waste to replace the use of natural resources, it will improve the resource efficiency of networked companies collectively. This “industrial symbiosis” focuses on the performance of an industrial network rather than that of individual companies.

There have been a variety of different terms used to describe industrial areas and actions with very similar concepts, such as “eco-industrial park” and “eco-town.” There is no centralized or publicly available global data source. However, many related initiatives have been implemented in China, Denmark, Japan, the Netherlands, South Korea, Sweden, the United Kingdom and the United States. France also published recent national data that identified 152 such initiatives as of 2020.

Annual public and private funds invested in resource efficient technologies

Research and development into new technologies may create innovations that expand the possibility of improving resource efficiency, and in some cases drastically so.

Research and development into new technologies may create innovations that expand the possibility of improving resource efficiency, and in some cases drastically so. This indicator measures the amount of investment in resource efficient technologies.

However, no centralized or publicly available data source has been identified. Challenges of data collection are two-fold: first to collect data of both public and private investments in technologies, and then to make a distinction between resource efficient technologies and other technologies.

Photo credits

Photo by Arno Senoner

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