Businesses increasingly recognize that circular solutions can deliver broad economic value — World Economic Forum and Bain & Company

DAVOS, Switzerland-January 22, 2025- Businesses across industries are increasingly recognizing the potential of circularity to create value through revenue growth, increased resilience, sustainability, and cost reduction, according to a new report by Bain & Company, the World Economic Forum and the University of Cambridge.

The global survey of 420 senior executives across 10 industries underscores the rising importance of circular solutions. In a circular economy, products and materials are kept in circulation, resource extraction is slowed down, and economic growth is decoupled from resource consumption.

While only 40% of businesses considered circularity important three years ago, that number has surged to 75% today and is expected to reach 95% within the next three years.

"The shift toward circularity is not just an environmental imperative but a massive economic opportunity," said Hernan Saenz, partner at Bain & Company and global head of the firm's Performance Improvement practice. "It has the power to enhance resilience in a world where we are overconsuming our resources and running into scarcity of materials. Companies that address this challenge head on and embrace circular solutions will gain competitive advantage and secure resources as first movers."

However, the survey finds that some businesses have not yet identified how to leverage circular solutions to reduce GHG emissions (35% of businesses), increase resilience (35%), grow revenues (27%), or decrease costs (44%).

The report lays out three "archetypes" that serve as a strategic model for businesses looking to transition into circular practices. The first archetype centres on replacing virgin materials with circular ones - for example, using recycled plastic or aluminium. The second focuses on extending product lifespans to reduce the demand for manufactured goods, and the third redefines business models by adopting more circular ways of working and refers to sharing models. This new survey finds a quarter of businesses have scaled solutions across all three archetypes, while an additional 20% have scaled solutions across two archetypes. The survey finds that businesses with mature circular strategies spanning all three archetypes are generating higher economic value than those that are active in only one or two.

"The transition from linear to circular models is challenging for businesses, but our research gives reasons for optimism," said Jenny Davis-Peccoud, partner at Bain & Company and founder of the firm's Sustainability practice. "A growing number of businesses are showing how challenges can be overcome and that circular transformations can deliver substantial economic value. Real leaders embed circularity in the business strategy and have a structured approach to quickly identify roadblocks and scale circular solutions that are working."

The report, "Circular Transformation of Industries: Unlocking Economic Value," provides a roadmap for businesses to transition from linear to circular models, highlighting opportunities to address resource scarcity, reduce greenhouse gas emissions, and unlock economic opportunities.

Bain & Company will host a session today at the World Economic Forum's Annual Meeting titled "Circularity as the New Engine for Growth," which will build on the whitepaper findings and feature C-suite speakers from some of the world's top technology and manufacturing companies.

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