Circular letter: How the global economy accepts the circular economy

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The central aim of the circular economy is to extend the life span of all goods and materials that are bought, sold, used and thrown away every day in our societies in order to reduce mining, pollution and waste. As such, it has become an important tool in the fight against environmental crises such as climate change, loss of biodiversity, resource scarcity and pollution.

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Research by Tekk.tv Vantage confirms that the concept of recycling has moved from relative obscurity to the boardroom of companies in just a few years. In an October 2018 survey of 317 executives from major corporations around the world, 98% were familiar with the concept. Thirty percent indicated that their company is pursuing a circular strategy, and more than three-quarters plan to adopt targets to make their products, processes or business models more circular over the next five years.

Our survey – which was also based on more than 25 in-depth interviews with large companies, start-ups with circular strategy and other experts – shows that companies are prioritizing the following strategies and business models:

Reduce. Using design and manufacturing technology to reduce material, energy and waste footprints.

Reuse. Offering subscription, leasing or sharing models rather than basing the business on one-time sales.

Restore. Design products that are easier to repair or “remanufacture” into new products.

Reissue. Transform by-products into new products or add recycled content to products and packaging.

Renew. Substituting finite materials with renewable materials and focusing more on sustainable procurement.

Beyond sustainability

Practitioners describe circularity as a tangible approach to resource efficiency around which companies can “wrap their arms” – one with benefits that go beyond the achievement of sustainability goals. In fact, the overwhelming majority of the managers we surveyed (95%) saw the transition to a circular economy as positive for their company and cited access to new markets, improved competitiveness, enhanced image and higher revenues as the most important benefits.

However, our survey also shows that the environmental service branch is more than just an addition to corporate social responsibility or sustainability strategies. It requires a complete rethink of products and business models, from the choice of materials to the way products are designed, manufactured, used – and disposed of.

Lack of know-how, technology and partners were the main challenges identified by the survey participants. To get it right, companies need to collaborate internally – especially with procurement, design and distribution teams – and throughout the supply chain. This opens the door for new “circular enablers” who can facilitate exchanges, form coalitions and close gaps in technology, services and know-how.

Click here to download the full Vantage report.
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