Christian Kaufholz
Acting co-Director for Resource Circularity, World Economic Forum
Organisations that embark on circular transformations and create more adaptable operating and business models will be better positioned to prosper, even in times of disruption, while contributing to sustainable growth.
With an ever-changing landscape in the global economy, industrial companies are forced to rethink their use of resources and contribution to economic growth. Circular transformation can help achieve robust and sustainable expansion in a resource-constrained world.
Business models that encourage circular transformation
The circular transformation of industries at large can help companies unlock productivity, innovation and sustainability. It will require systemic change within organisations and the involvement of all stakeholders — including government, academia and civil society.
Circular practices — such as recovering resources and regenerating materials — build more productive, resilient, resource-efficient, closed-loop supply chains while bolstering sustainability and driving economic growth.
- Resilient supply chains: Circularity increases control of supplies and improves supply chains’ responsiveness to global disruptions and helps address shortages.
- Resource efficiency: Circularity enables new operating and business models so that all materials can be easily reused, repaired, remanufactured, recovered and recycled.
- Environmental sustainability: By limiting wasteful consumption and production practices, circularity reduces the climate footprint of economic activity and enables the delivery of net zero emission goals.
- Economic growth: Circular operating and business models encourage market products that are looped through the value chain multiple times, which can generate new sources of revenues and profits as well as better meet consumer needs.
Without commitments from all stakeholders and global collaborative efforts, the circular transformation will continue to stagnate.
Showing initiative to set industry standards
Without commitments from all stakeholders and global collaborative efforts, the circular transformation will continue to stagnate, delivering only slow and incremental shifts. The world needs stakeholders to come together to build the ‘operating system’ for the circular economy and follow in the footsteps of industry innovators.
We’re seeing industries and policymakers turn towards resource circularity to help secure, transform and diversify the supply of industry-critical materials while reducing the need for extraction and associated emissions.
Industry collaboration can promote circularity
Industry coalitions have worked with future-focused governments to establish the incentives, policy frameworks, standards, operating models, certifications and circularity-focused capabilities that are necessary to scale.
In some markets, business models have been transformed to decrease demand and increase both the recovery potential and actual recovery of these resources, partially mitigating the demand-supply gap going forward.
- We are calling upon organisations to join a growing cohort of circular industry transformation leaders to partner with us on this journey to collaborate at an unprecedented scale towards a circular transformation of our industries.