Study: Businesses Commit to Circularity, But Hurdles Remain

Study: Businesses Commit to Circularity, But Hurdles Remain

A new study from Bain & Co. reveals that 55% of large businesses commit to circularity, but linear mindsets hold them back.

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, the company said.

“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 also 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, the company said.

“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.

  • Virgin material consumption rate: Companies making disposable or short-life products, such as plastic bottles, can create circular value by reducing the use of virgin materials and ensuring raw materials are recycled at the end of the product lifespan. These businesses may find growth opportunities in reverse logistics and infrastructure businesses or supplying circular feedstock.
  • Product lifespan: Extending product lifespan is an effective strategy for high-value premium products that are both durable and easy to disassemble. These companies will adapt their business models to engage customers after product purchase and develop economical repair options, including right-to-repair guarantees.
  • Product capacity utilization: Companies that make products that require fast upgrades or have short lifespans can increase product utilization by exploring different uses, sales models and business models. Increasing product utilization can create growth in enabling services and platforms, reverse logistics and infrastructure, and service-and-leasing models, the company found.

You May Also Like

Clean Motion Starts Zbee Manufacturing in India

The new Zbee factory will be located in Pune and will begin production in the fall of 2024.

Clean Motion Starts Zbee Manufacturing in India

Clean Motion announced that it will work with India Accelerator to start the manufacturing and sale of its passenger vehicle, Zbee, in India. The company, which already has a presence in India, will now expand its operations through local manufacturing and sales of Zbee.

The new Zbee factory will be located in Pune and will begin production in the fall of 2024. Clean Motion said it hopes to produce 1,000 vehicles per month within three years. This expansion meets both the Indian government's electric vehicle ambitions and the market's need for emission reductions, the company said.

Asahi Kasei Achieves Electrolyte Technological Breakthrough

The company said it successfully achieved proof of concept for lithium-ion batteries with improved power output and service life.

Autel’s CSMS Achieves OCPP 2.0.1 Certification

The Charging Station Management System obtained the certification from the Open Charge Alliance.

Autel's Charging Station System Achieves OCPP 2.0.1 Certification
Amsted Automotive Displays New Ways to Extend EV Range 

Amsted will display a cache of multi-functional clutch technologies with benefits in ICE, EV and HEV platforms at the 24th annual VDI Dritev Congress.

Honda Launches Fuel Cell Electric Vehicle in Ohio

Production of the 2025 CR-V e:FCEV fuel cell EV, the only FCEV made in America, begins at Performance Manufacturing Center in Marysville, Ohio.


Other Posts

Cummins, Daimler Truck and PACCAR Form Joint Venture

The completed joint venture is now known as Amplify Cell Technologies.

GreenPower Launches EV Star Utility Truck

The EV Star Utility Truck is purpose-built and fully customizable to fit a range of vocational applications and utility use cases.

Automotive, Mining Sectors Meet for Battery EV Conference

The 2024 BEV In-Depth conference explored the EV battery supply chain and zero-emission vehicle advancements.

Highland Named One Of TIME’s Most Influential Companies

Highland was recognized in the category of Pioneers.

Highland Named One Of TIME's Most Influential Companies