The circular economy is increasingly becoming a part of more corporate agendas globally, according to a survey by DNV and World Business Council for Sustainable Development (WBCSD).
“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,” says 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.”
“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,” says Brendan Edgerton, circular economy director WBCSD.
- Companies are transitioning to 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.
- 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 poses 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 limited. Here we see is a huge potential to take advantage of existing solutions, building necessary stakeholder and consumer engagement and trust by combining verified metrics with blockchain-enabled track and trace applications,” says Crisciotti.