NEWS9 November 2021

Businesses must embrace circular economy practices


US – Businesses must adopt circular economy models to meet consumer demands and mitigate future supply chain risk, says the latest report from the Capgemini Research Institute. 

Shopping bag sustainability environment eco_crop

Entitled, Circular economy for a sustainable future: How organisations can empower consumers and transition to a circular economy, the reports finds that, as consumers become more discerning, they are increasingly pivoting towards companies that engage in circular practices.

According to the study, more than seven in ten consumers want to adopt circular practices, such as reducing overall consumption ( 54%), purchasing more durable products ( 72%), and maintaining and repairing products to increase product life ( 70%). 

Driven by concern about issues of waste and resource depletion, consumer desire to adopt mindful consumption practices is growing. However, nearly 50% of consumers believe that organizations are not doing enough to recycle, reuse, and reduce waste across sectors, and 67% expect organisations to be responsible when advertising products and to not encourage excess consumption.

Consumers are currently constrained due to issues of convenience, access, and cost. Three in five ( 60%) cite a lack of sufficient information (on origin, recyclability, recycled content and so on) in product labelling as a reason for not taking positive circular actions. Some 55% say expense is a barrier to repairing products, and over half ( 53%) cite not wanting to compromise on convenience.

The report identified some critical actions for businesses to implement circular economy initiatives. These include radically rethinking business models and value chains to ‘close the loop’; enabling consumer adoption of circular practices; establishing organisational enablers to support the transition towards greater circularity; using emerging technologies to further circular economy strategy; and collaborating to accelerate progress.

“The circular economy is the key to sustainable growth,” commented Roshan Gya, managing director, intelligent industry at Capgemini Invent. “The winners will be those who secure a deep transformation in three areas: minimising the impact of their existing products and services, developing the products of tomorrow to embrace circularity principles by design and reinventing their operations to include new sustainable business models.”