Wow. What a seminal year for CSR and sustainable development it has been, for bad as well as good!

The corporate scandals came thick and fast – ranging from News Corporation hacking the phones of victims of serious crime through to Barclays manipulating market interest rates at a time of taxpayer-funded bank bailouts. Political power brokers also continued to fail to strike a deal when the world needed them the most – with the earlier disappointment of Rio+20 in Rio de Janeiro being followed by them kicking the can down the road once more at COP18 in Doha.

Despite this, some ‘big ticket’ initiatives continued to gain momentum. One notable campaign by the likes of Aldersgate Group and Ellen Macarthur Foundation is for the business community to step up and fill a leadership void by supporting the switch to a circular economy in order to reverse unviable patterns of consumption. Another is the ongoing promotion of the ‘smart cities’ concept by the likes of The Climate Group and LSE Cities to ensure that an age of rapid urbanization is sustainable. Both have great merit and in fact have a common thread in their focus on stronger resource efficiency being able to save the day.

So, will we look back again in another twelve months’ time and curse another missed opportunity? In short, are we chasing our own tail when it comes to solutions such as the circular economy?

The cold hard truth is that despite sector growth that bucks the recession trend, not only is the green economy uncompetitive when pitched against the (heavily subsidized) brown economy, it is also not a serious rival to other green issues such as street litter. How so? Well, because at the end of the day, there is a marked difference between what is important and what is priority. Yes, adapting to extreme weather or tackling food supply shortages at some point in the near or distant future is important. But it is not as important as paying your mortgage or ensuring that your kids go to the best school and have a better life than yourself. In fact, for many, climate adaptation tomorrow is not as important as a clean street is today.

So, what has this got to do with the circular economy and smart cities? Well, their well-intentioned focus on stronger resource efficiency may be seriously misplaced. Yes, avoiding industrial waste through closed-loop product engineering or reducing energy demand through smart grid infrastructure makes best use of scarce resources. But so what? Saving money, process innovations, or boosting resource security should not be confused as the end goal. These are all important, but only as pathways to the real priority outcome: creating more desirable livelihoods. That is, to succeed, these campaigns need to make the connection between stronger resource efficiency and quality housing and sanitation in slums, creating job opportunities for the youth unemployed, boosting neighbourhoods’ capacity for self-help, and so on.

By linking the circular economy and smart city concepts to close-to-home issues like these, then and only then, we will be able to rewire the current flawed economic framework and construct a new, resilient model. For CSR and sustainability practitioners in 2013, be they at Timberland or New York City, this means being able to see the synergies and navigate the connections between the circular economy, sustainable urbanization and the practical needs and hopes and dreams of everyday people. Failing to do so means these great ideas will go the same way as the Sinclair C5 car or Betamax video recorder – relics we point at and giggle about in the museum.

Philip Monaghan is founder & CEO of Infrangilis (a consultancy and think-tank on resiliency strategies) and author of the books How Local Resilience Creates Sustainable Societies (2012) and Sustainability in Austerity (2010).