Why Businesses Must Lead the Charge in the Circular Economy

As the global economy increasingly adopts sustainable models, the circular economy is emerging as an important framework for reducing waste and improving resource efficiency. Circularity Gap Report 2024 The circular economy is expected to create around 2 million jobs and become a market worth $2-3 billion in the near future.

Discussion around the concept has exploded, with the volume of related debates and articles tripling in the past five years. Yet despite this increased attention, global circularity continues to decline as consumption rates accelerate.

The efforts of individual companies alone will not be enough to bring about significant change. Ellen MacArthur Foundation We’ve profiled some leading companies that are pioneering the circular economy movement by developing products and services designed to support this transition.

Related: How to build a circular economy and eliminate waste

However, to truly advance the circular economy at societal, national and global levels, companies need to adopt innovative practices that are in line with national policies, actively participate in setting industry standards and foster cross-sectoral collaboration.

By adopting these strategies, companies can play a key role in transforming industries and creating a sustainable future.

1. Innovation in line with environmental policies

Governments around the world are increasingly implementing green policies aimed at balancing economic growth and sustainability. Businesses need to respond proactively by innovating their marketing, technology and product development in line with these policies.

Complying with government green initiatives not only contributes to environmental sustainability, but also brings economic benefits such as cost savings and improved brand reputation.

Major automakers such as Tesla, Volvo and Volkswagen are turning to GIG casting, a large-scale high-pressure die casting (HPDC) method, to stay competitive under the EU’s carbon border adjustment mechanism. (CABM) At the same time, we will achieve carbon emission targets to reduce our climate impact. This innovative approach will enable us to produce lighter vehicles while significantly reducing assembly costs.

Related: How a circular economy for home appliances will change sustainability

2. Industry Standardization

As the importance of promoting a circular economy slowly grows, companies around the world are increasingly recognizing the value of adopting industry standards that promote sustainability and resource efficiency. Standardization drives change across industries by establishing uniform guidelines and protocols within an industry, streamlining processes and ensuring consistency and quality. By committing to these industry standards, companies demonstrate their commitment to sustainability and encourage other companies to follow suit, facilitating a global movement toward a more sustainable and resource-efficient future.

A typical example is LEED (Leadership in Energy and Environmental Design) LEED certification is a prestigious green building rating system that evaluates sustainable practices in the design, construction, operation and maintenance of buildings, aiming to improve energy efficiency and the use of sustainable materials. Buildings of prominent organizations such as New York’s Times Square Tower, Bank of America Headquarters and Apple Headquarters are great examples of the integration of LEED standards and have led the way in accelerating the adoption of green building standards around the world.

Similarly, NYSE-listed recycler ATRenew, China’s largest used electronics recycling platform, has actively contributed to the development and adoption of uniform standards for the inspection and grading of used electronics. By setting a benchmark for quality and operational procedures in the used electronics recycling industry, ATRenew is enabling more companies to enter the sector, helping to alleviate the e-waste crisis.

Related: How to maximize value for your business in the “circular economy”

3. The Power of Groups

Companies are contributing to the development of a circular economy through individual initiatives, alliances and partnerships formed to foster best practices. While individual initiatives are important, companies can significantly amplify their impact by forming alliances and partnerships across sectors, organizations and countries. Joint efforts across sectors, organizations and countries can pool expertise to scale the impact of sustainability initiatives across industries. Participating in these networks allows companies to demonstrate leadership on relevant issues and access the support and resources they need.

of Global Plastics Action Partnership One notable example is the Global Plastics Alliance (GPAP), which brings together a diverse range of actors and stakeholders – including the UK and Canadian governments, companies such as Nestlé, Unilever, Coca-Cola, Nike and Morgan Stanley, and non-profits such as the World Bank, UNEP and WWF – to promote reusable and biodegradable plastics and to increase plastic collection and recycling efforts.

This collaborative approach has resulted in many successful projects in Asia, Africa and the Americas. These collaborations combine resources and expertise to address plastic pollution and set a precedent for future industry-wide sustainability initiatives.

Companies need to be fully aware of their pivotal role in the circular economy. Innovative measures to comply with national and global green policy trends will drive changes in line with environmental goals, industry standards will serve as basic guidelines for changes to be implemented in practice, and sharing expertise and experience with different parties will maximize the impact of these changes. In doing so, companies will ensure long-term profits and growth, have a positive impact on society and the environment, and jointly advance the goal of a more sustainable future.