Between April and July 2016, Finch & Beak conducted a research on the maturity of circularity in the chemicals sector. The methodology consisted of a combination of desk research, an online questionnaire, in-depth interviews, and meta-data from Dow Jones Sustainability Index composer, RobecoSAM, and eRevalue. The study found that frontrunners are more often specialty chemicals companies, positioned at the end of the value chain. Their approach towards a circular model is characterized by a higher innovation success rate, more value chain collaboration and higher leadership commitment.
In response to the global threat imposed by resource scarcity and climate change, circular economy is highly regarded a way to secure a sustainable future and to enable businesses and society to thrive. Today’s biggest sustainability challenges provide plenty of opportunities for companies to differentiate themselves and to create immediate impact. Organizations in many industries are currently starting to implement circular business practices. However, not all chemical companies are already able or willing to start the transformation from a linear to a circular economy which is not an easy one. The chemical industry has a huge innovation potential. Since 1990, production of the global chemical industry grew by 71% while the sector cut its CO2 emissions in half (-58%) – an impressive feat underlining its position as one of the world’s most innovative industries. Chemicals create the foundation for markets such as energy, food, and materials, and is essential to the development of national economies. Therefore, to make change happen, the $ 4,2 trillion industry plays a significant role.
The main outcomes of the sector study are as follows:
- A solid innovation management strategy is key to develop a successful circular economy portfolio;
- Both an inside out and an outside in perspective are needed to determine where circular economy sweet spots are presented;
- A solid innovation strategy is an exigency to better leverage innovation outcomes through a better innovation process design;
- Partnering capabilities are required to build a competitive value chain. This calls for a skill set that is not self-evident at most chemical companies;
- Leadership commitment as in any other transformation is a prerequisite for leading the circular economy transformation.