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Climate & Sustainability
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Insight
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2 minute read

Engaging the C-suite in the circular opportunity

The global economy has fallen to just 7.2% circular, and the global situation gets worse year on year. We stand before a path that requires a fundamental transformation of economic activities, only achievable with collaboration across the private sector, public sector and society. For C-suite leaders, it is also important to remember that, as with any transformation, there is potential for market differentiation, product innovation, supply chain efficiency and cost efficiencies.

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key takeaways
1.

The global situation is getting worse year on year driven by rising material extraction and use. Rising material extraction has shrunk global circularity to 7.2% in 2023, leaving a huge circularity gap.

2.

More than 90% of materials are either wasted, lost, or remain unavailable for reuse for years as they are locked into long-lasting stock such as buildings and machinery.

3.

Although evolving into a more circular society may seem difficult, there are things that C-suite leaders can do today to get their businesses on a circular track.

How big is the circularity gap?

Global new material extraction is outpacing population growth. In fact, it is growing at twice the rate, and as our population reaches unprecedented levels, we are exceeding the point where the planet simply cannot keep up with demand.

This has shrunk the global circularity: From 9.1% in 2018 to 8.6% in 2020 and now 7.2% in 2023. Therefore, the globe exclusively relies on new materials today. To bring human activity back within the safe limits of the planet, we estimate that we would need to reduce global material extraction and consumption by one-third. This sounds like a huge task, but we can achieve it if we embed circular solutions across the four key global systems listed below.

Circular economy – where can we start?

The biggest opportunity for the C-suite leaders in the private sector to lead change is within:

  • Food systems
  • Mobility and transportation
  • Manufacturing and retail
  • Real estate and construction

One thing is that we can transform how materials satisfy our needs by using less, using longer, using again and using regenerative resources. Another thing is that more businesses need to embrace the challenge of circular innovation. C-suite leaders can make a substantial impact by planning accordingly and embedding circularity in the business strategy. This is also a key part of mastering sustainability tranformations.

While it is an opportunity to help close the circular gap, it is also important to remember that, as with any transformation, there is potential for market differentiation, product innovation, supply chain efficiency and cost efficiencies.

Three concrete actions to get started

Focusing on how to overcome the circularity gap, the report has identified three key drivers of successfully initiating the change. Consider the following:

  • 1. What is your level of commitment to circularity, and how does it interplay with your current business strategy? Focusing on this now gives you the time to work through it, instead of being confronted with it later.
  • 2. What does your value chain look like and how will you work in coalitions and alliances? Where do you need help from, and where can synergies be created across your ecosystem to experiment and drive change?
  • 3. Get your enablers in place. Data transparency, measurability and reporting control are fundamental to identify opportunities and progress.

Want the full picture? Dive into the recommendations or read the full report.