# Circular Economy

*ESG & Sustainable Finance — Finicade finance glossary*

A circular economy designs out waste by keeping materials in use through repair, reuse, remanufacture and recycling, replacing take-make-dispose.

A circular economy designs out waste by keeping materials in use through repair, reuse, remanufacture and recycling, in contrast to the linear take-make-dispose model. Its financial appeal is input cost and supply security rather than sentiment: recovering materials hedges commodity prices and reduces exposure to extraction disruption. Regulation on repairability and packaging is turning it from a concept into a compliance cost.

**Also known as:** circularity, cradle to cradle, closed loop economy

**Related terms:** [Natural Capital](https://finicade.com/glossary/natural-capital), [ESG](https://finicade.com/glossary/esg), [Sustainable Investing](https://finicade.com/glossary/sustainable-investing), [Externality](https://finicade.com/glossary/externality), [Cost of Goods Sold](https://finicade.com/glossary/cost-of-goods-sold)

Source: https://finicade.com/glossary/circular-economy