A new report assessing 200 UK businesses has revealed how a growing number of circular living strategies are helping many to improve their financial performance and mitigate against future uncertainties linked to climate change.
Produced by global environmental action NGO WRAP and OC&C Strategy Consultants, the report Are Businesses Leaving Money on the Table? – Creating Value through Circularity examines how a range of circular living strategies are now becoming more commonplace in UK boardrooms.
It shows how early adopters are benefiting from revenue growth, competitive advantages and cost saving.
Since 2020, circular industries have been growing 3.1 percentage points faster than linear industries and circular-native businesses have been growing up to two times’ faster than linear competitors.
The report warns that many are missing out and risk future disruption linked to supply chain insecurities if they continue business as usual.
Catherine David, CEO of WRAP, said: “Circular living strategies are now firmly established in many businesses – large and small – but many more are missing out on the benefits they offer.
“Circular business models can build resilience, unlock growth and help secure customer retention by staying relevant in an ever-changing marketplace. Our report highlights the key strategies and rewards they’re delivering and is essential reading for any business wishing to future-proof itself.”
The report shows that awareness of circularity is relatively high in businesses and details how it has helped improve financial performance, mitigate against supply chain risks, opened new business opportunities and enabled businesses to become more policy compliant.
Ewan Parry, partner at OC&C Strategy Consultants, said “Our research uncovered that businesses pursuing circularity are benefiting much more than just improving their “green credentials”.
“Adopting circularity can unlock real commercial value across a wide range of businesses, from driving new revenue streams, to boosting customer retention and loyalty, whilst also providing supply chain efficiencies. While circular initiatives are not one-size-fits-all, we’ve seen that when circular strategies are carefully designed and targeted they can deliver tangible commercial benefits to businesses. For many companies, the next step is moving from awareness to action: embedding circularity in ways that supports long-term growth and competitive advantage.”
Circular living strategies separate value creation from spiralling overconsumption of virgin raw materials.
It is a design-make-reuse approach that helps to reduces waste and carbon emissions from products.
For businesses, it means optimising design, prolonging product life and enabling effective recycling through more resource efficient production methods, and circular business models.
WRAP and OC&C Strategy Consultants found that circular design initiatives are the most common Circular strategies within the businesses assessed, with 60% now designing products for durability or repairability.
Investors were also found to be seeking out circular business models. The report identified 184 financial investments made in circular economy ventures in 2023, an increase of 42% on 2022. Investment volume growth saw a 34% per annum rise between 2018 and 22.
It identified eight common value drivers where circularity delivers tangible commercial impact across a wide range of businesses. These generate additional revenue streams, provide competitive differentiation, unlock new customer segments, increase consumer and brand loyalty, increase supply chain resilience, reduce costs, meet sustainability regulation and targets, and meet board and investor requirements.
