55% of large businesses have made circularity commitments, but linear mindset is holding back progress
New research from Bain & Company shows more than half of circular initiatives are narrowly confined to recycling or waste management strategies
NEW YORK, Sept. 18, 2023 /PRNewswire/ -- A new study from Bain & Company reveals that 55% of large businesses have made commitments to circularity, but a linear mindset is preventing them from truly embedding it into their businesses. Bain's research shows more than half of the circular initiatives businesses pursue are narrowly confined to recycling or waste management strategies, rather than embracing the full suite of technologies and business models needed for a circular economy—include re-engineering products to last longer, embracing repairability, adopting leasing models, reducing virgin material use, and providing complimentary services throughout the lifecycle of a product. These are among the finding of Bain's new brief, Strategy in a Circular World, which is based on a survey of 400 leading organizations.
"Executives will need to shift their mindsets to replace linear business models by decoupling growth from resource consumption," said Jenny Davis-Peccoud, partner at Bain & Company and global head of the firm's Sustainability & Responsibility practice. "Companies have started by improving recycling and waste management. To accelerate progress, they will need to embrace new technologies and reconfigure their value chains. For example, companies investing in recyclable PET bottles are now als investing in recycling infrastructure to improve access to circular materials."
Circularity leaders monitor for turning points to assess the moments at which infrastructure, regulation, and consumer behavior signal the acceleration of the circular economy. For example, in the electric vehicles industry, manufacturers' growing portfolio of electric models and the development of charging infrastructure are both signposts of consumer acceptance. Being attuned to these developments enables executives to invest in circularity at the right time.
"In a world of increasingly impactful environmental regulation, raw material scarcities, trade tensions, and global supply chain disruptions, circular solutions can provide continuity," said Hernan Saenz, partner at Bain & Company and global head of the firm's Performance Improvement practice. "The ability to link circular strategies to business objectives and understand the industry's future profit pools will be key to unlocking value. Executives need both the vision to imagine a circular future for their industry and the initiative to convert that into concrete action today."
The study identifies three sources of circular value companies should consider.
Editor's Note: For more information or interview requests please contact Katie Ware at [email protected] or +1 646 562 8107.
About Bain & Company
Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future.
Across 65 cities in 40 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Our 10-year commitment to invest more than $1 billion in pro bono services brings our talent, expertise, and insight to organizations tackling today's urgent challenges in education, racial equity, social justice, economic development, and the environment. We earned a platinum rating from EcoVadis, the leading platform for environmental, social, and ethical performance ratings for global supply chains, putting us in the top 1% of all companies. Since our founding in 1973, we have measured our success by the success of our clients, and we proudly maintain the highest level of client advocacy in the industry.
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