What characterizes a closed-loop system?

Prepare for the Fundamentals of Sustainability Accounting Test. Hone skills with real exam questions, detailed explanations, and strategic tips for success. Make the most of every practice attempt!

A closed-loop system is characterized by the concept of reusing materials to minimize waste, which directly aligns with choice B. In this type of system, the goal is to create a sustainable cycle where outputs from the production process are repurposed as inputs for new production, effectively closing the loop on resource consumption. This minimizes the need for new raw materials and reduces waste, thereby supporting environmental sustainability.

By focusing on material reuse and recycling, closed-loop systems contribute to a circular economy, where products are designed with their entire lifecycle in mind, thus promoting resource efficiency and a reduction in environmental impact. This approach ensures that resources are continuously cycled back into the production process, promoting sustainability and reducing the ecological footprint of production activities.

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