Circular Transformation

The linear economy where we extract, use, and waste resources is no longer sustainable. Currently, more than 90% of all resources we use end up in incinerators, landfills, or are otherwise lost. This is neither economically nor environmentally tenable. Especially as resources become scarcer—and thus more expensive—and as national and international regulations become stricter in this area.

The solution lies in a circular way of production and consumption. This approach will only be successful for organizations if it is seen as a strategic opportunity. A different way of thinking is needed, elaborated in a circular, profitable business model where margins improve and new business ideas emerge. While at the same time, risks decrease, such as resource shortages, regulatory non-compliance, or even reputational damage.

The biggest challenge is letting go of a—currently often still—successful business model. Organizations fear that circular working and production are less (or not) profitable and do not fit traditional financial metrics. Also, the costs to switch to a circular way of working and more closed loop value chains are challenging. Many organizations primarily focus on the immediate investments needed to switch to a sustainable or even circular model. It is essential to see the bigger picture, where long-term costs decrease, and new revenue streams emerge thanks to new business models—such as leasing instead of selling products.

• Less dependence on scarce and expensive resources
• New business models where products (and thus resources) remain owned and client relations become more durable
• Better competitive position concerning the increasingly sustainable consumer
• Cheaper and more effective production processes after initial investments
• Faster compliance with (European) ESG legislation such as CSRD or ESPR
• Smaller carbon footprint and nature impacts due to sustainable, alternative and lower material use
• Easier access to capital
• More attractive as an employer for scarce talent

• Determine your baseline. Where do you currently stand as an organization regarding resource sustainability, product durability and do you know your resource streams, and where are the gaps? Make use of global frameworks such as the WBCSD CTI to do this. 
• Develop scenarios. Where are the most significant opportunities? How can you divert which resource streams, products or components towards reuse? Where in your design and processes do you need to make adjustments? What new business ideas are possible?
• Map investments. How much capital is needed, and how do we ensure that these investments are commercially attractive?
• Make it measurable. How do we set the right KPIs? What data do we need? How do we report and involve stakeholders in this process? Align with globally growing metrics frameworks such WBCSD CTI.