New Report from BCG and the WBCSD Details Business Benefits and Best Practices from Circular Economy Leaders

The Boston Consulting Group (BCG) and the World Business Council for Sustainable Development (WBCSD) joined forces to offer practical guidance for organizations seeking to successfully transition to the “circular economy.” Their report—“The New Big Circle. Achieving Growth and Business Model Innovation through Circular Economy Implementation”—is the result of a research effort that included a survey of 78 managers from different industries across the globe and one-on-one interviews with leaders to understand best practices on how leading companies are making the circular economy come to life.

In a world of finite resources and growing population, the traditional “take-make-dispose” economic model is increasingly unsustainable. As a consequence, companies are feeling pressure from customers, NGOs, regulators, and investors to rethink wasteful linear value chains. The “circular economy” envisions a more regenerative alternative focused on a “refurbish-repair-reuse-recycle” model that has the potential to sustain global growth in the face of increasing resource scarcity.

It’s been estimated that the transition to the circular economy could unlock USD $4.5 trillion of GDP growth worldwide by 2030—and the executives interviewed agreed that the shift would yield economic benefits:

  • 97% of respondents felt that circular innovations would make their company more efficient and competitive in areas such as sourcing, product development ,and production processes; and
  • 96% believed the move to the circular economy will help increase long-term value creation

Given that, it is not surprising that 84% of respondents stated they expect to increase their investments in circular economy projects in the future.

The report argues that the circular economy journey should be tackled in three stages of increasing complexity: first via process innovation, then product innovation, and finally business model innovation. Thirteen case studies of leading companies achieving growth and enhanced competitive advantage as a result of circular initiatives—AkzoNobel, C&A, CMPC, Cohealo, GreenHome, Hirdaramani, IKEA, LafargeHolcim, Michelin, Philips, Rubicon, Skanska, and Solvay—offer concrete examples.

While every company is different with different opportunities and challenges, the report distills 10 practical recommendations for putting circular initiatives in place:

  1. Engage with external stakeholders
  2. Ensure consistent and strong top management support
  3. Define “circular” and communicate the vision
  4. Quantify specific ambitions and develop a business case
  5. Educate your employees
  6. Engage and empower business units
  7. Start with process innovation, then move to product innovation and business model innovation
  8. Collaborate with external partners
  9. Define and align KPIs for goals and accountability
  10. Do good and talk about it


Share Button