Circular Economy Report: Transforming A Sustainable Business
Circular economy is becoming less of a trend and more about sustainability, with 75% of businesses now considering circular solutions a top priority.
The figure has increased by 40% in three years, according to The World Economic Forum (WEF), University of Cambridge and Bain & Company's Circular Transformation of Industries (CTI): Unlocking Economic Value report.
The study interviewed 420 executives from 10 global manufacturing industries and dives into how circularity enhances revenues and cost saving while remaining sustainable.
The sustainability side of the CTI report
The CTI report explores how industries can transition to circular business models to improve sustainability and economic value.
It highlights how circular partnerships, lifespan extension, circular feedstock, capacity sharing and material innovation can be strategic in the race to become fully sustainable.
The report underscores the urgency of tackling resource overconsumption and fostering systemic change with key data like:
Environmental pressures:
- Humans consume 1.7 times the Earth's annual replenishable resources
- Resource overuse drives material shortages, cost volatility and environmental degradation
Greenhouse gas emissions:
- Circular models could reduce emissions from new products by 40% by 2050 – this includes plastics, aluminium, steel and cement
- Recycling aluminium cuts emissions by up to 90% compared to virgin production
Waste and biodiversity:
- Reducing, reusing and recycling helps decrease waste and pollution
- Circular strategies can preserve biodiversity by reducing habitat destruction for resource extraction
Economic opportunities in circular models:
Revenue growth
- Repair, refurbishment and capacity-sharing models create new revenue streams
- Circular products attract environmentally conscious consumers and niche segments
Job creation
- The International Labour Organisation (ILO) estimates 7–8 million jobs by 2030, driven by circular industries
Cost savings
- Reduced material acquisition and waste disposal costs
- Increased product lifespan reduces replacement expenses
Archetypes of circular transformation:
Circular feedstock
- Using recycled materials instead of virgin resources
- Industries like packaging and consumer goods lead adoption
Lifespan retention
- Repair, refurbish and upgrade strategies maximise product usage
Capacity sharing
- Shared-use models, such as rentals, optimise resource use and emissions.
Business barriers within the CTI report
Although providing lots of positive outcomes and bonuses from using a circular economy sadly, not all are good.
The good intentions behind becoming green often face a lot of barriers and challenges like cost.
Transitioning from a quick, non-sustainable company into a circular one can be costly when incorporating expenditure like infrastructure, capable buildings, new supplies and so on.
Although materials and products are wanting to be reused, circular supply chains need to fund new logistics and collection systems to access these.
New collection systems are a great step forward, however, the company has to be conscious to innovate sustainable solutions and track emissions, resource use and product lifestyle.
Companies are encouraged to form partnerships to not only solidify, but also maximise their sustainable circularity, baring in mind the global recycling policies.
It is essential that these companies align with the legal policies and targets to ensure trust from customers.
Using recycled materials is the foundation of a circular economy however, the main goal of life-long, sustainable products can't be forgotten – these products need to last if not the object is defeated.
Company involvements and partnerships
Although many companies have the potential to introduce and conduct a circular economy alone, it's often more beneficial to partner with other companies – regardless of industry.
By partnering with other companies, the opportunity to reduce more, spend less and expand innovation is increased hugely.
An important partnership is Hydro and Porsche, reducing carbon footprints within the industry by collaborating to recycle aluminium.
Hanne Simensen, Executive Vice President of Hydro Aluminium Metal, explains: “Hydro is pursuing multiple paths to decarbonise our operations.
“With this pilot we take another step on our path to zero-carbon aluminium.
“Green hydrogen is an exciting potential option to decarbonise aluminium and other hard-to-abate industries.”
Another key player in the CTI report is Rockwell Automation, offering repair services that cut emissions whilst enhancing product lifespan, with these repairs up to 90% of emissions can be reduced.
We all know that plastics are a sustainability disaster, so Indorama Ventures is engaging in Polyethylene terephthalate (PET) recycling and Dow Chemical is partnering to advance recycling of pyrolysis oil into new plastics.
Circular economies have no straightforward path, there are multiple ways to achieve circularity no matter the industry.
In the report, HP are said to focus on monetising refurbished devices to support sustainable IT procurement.
Dell is also using recycled or renewable materials in its PCs, displays and accessories to reduce the environmental impact of products.
Cassandra Garber, Chief Sustainability Officer at Dell Technologies, says: “I've often said our sustainability strategy is as simple as ‘integration everywhere.’ A perfect example of that in action is the incredible list of circular design examples we can share that span so many aspects of our new AI PCs.”
The shift from trend to necessity in adopting circular economies demonstrates the urgency of addressing sustainability challenges.
By integrating sustainability into business models, companies can drive impactful environmental and economic change while fostering resilience.
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