A survey by DNV and World Business Council for Sustainable Development (WBCSD) reveals the circular economy is rising on corporate agendas. However, despite the growing attention in the public, among legislators and companies, the shift to business models that design waste out of the system seems to progress slowly.
While three in four companies are analysing or discussing circular economy, only 12% have made it core to current business strategies.
“So far, growing stakeholder and regulatory pressures such as the EU Circular Economy Action Plan adopted in March 2020 do not seem to have impacted the transition speed significantly,” said Luca Crisciotti, CEO in Supply Chain and Product Assurance in DNV.
“With only 5.9% of the companies indicating a leading approach coupled with the limited uptake of business model innovation, there is much left to be done before we reach a state of true circular economy required to shift from a linear take-make-waste industrial model to significantly impact our UN Sustainable Development Goals.”
The ViewPoint survey ‘Circular Economy. How are companies transitioning’ shows that companies focus more on process and product innovation, such as resource recovery (30.3%) or product life extension (39.6%). Fewer have moved into more advanced business models innovations such as product as a service (17.6%) and sharing platforms (12.5%). Most companies experience cost savings (57.2%) as a main benefit.
“While the private sector’s commitment to circularity is clear, external communications for their efforts are inconsistent in scope and barometer used. As investors, customers and regulators increasingly request information on circular performance, those companies equipped to measure, monitor and improve their circularity stand to capture the most value and showcase their true leadership,” said Brendan Edgerton, circular economy director WBCSD.
The fact that only 24.7% determine initial level (baseline) of circularity before implementing initiatives, while 26.7% set specific goals and targets and 19.8% have identified performance indicators is thought to present a significant barrier to progress.
“Customers and consumers increasingly require sustainability claims and performance to be well-founded and transparent. Results seem to indicate that performance communication and digital solution application is currently limited,” said Luca Crisciotti, CEO in supply chain and product assurance in DNV.