Mass production and mass consumption are critical to the linear economy. However, they have led to mass wastage and pollution and are testing the limits of ecological systems and planetary boundaries. This is the primary reason that responsible consumption and production is one of the United Nations 17 Sustainable Development Goals (UN SDGs).
The buzz around the circular economy (CE) is not new, but the pandemic and climate change have led to more serious discussions and activities. Companies like Apple have been at the forefront of recycling and reuse, using robots like “Daisy” for recycling old iPhones and trade-in programs for a variety of products. Clothing company Patagonia promotes repair and reuse for its customers through its “Worn-Wear” program. Home furnishing and goods store IKEA has committed to using more recycled and renewable materials in its products and now runs a store selling only used products. Unilever, Coca-Cola, Nike, and many more have set ambitious goals for supporting the circular economy and have pledged increased use of recycled products in their products or packaging.
The entrepreneurial ecosystem around the circular economy has also taken giant strides. Start-ups like Grover (Germany), Back Market (France), Everphone (Germany), Danggeun Market (South Korea), Swappie (Finland), Cashify (India), refurbed (Austria), Rheaply (US), Upway (France), Attero (India), Neeman (India), Cartlow (UAE), Reebelo (Singapore), FloorFound (US), Refurbi (Colombia), Again (UK), Recycle Jar (Bangladesh), Cyrkl (Czech Republic), Fjong (Norway), Ecovia (India), GiveAway (Belarus), Bekia (Egypt), Repurpose (the Netherlands), recircular (Spain), and Flip.ro (Romania) provide examples of an emerging CE-based enterprise ecosystem.
Given their large carbon footprints, innovation ability, and market share, large companies should be leading from the front and communicating their progress (see Table 1). Apple is, once again, a good example with its “Environment|Mother Nature” video featuring CEO Tim Cook and actress Octavia Spencer (playing Mother Nature).
Another organization at the vanguard in communicating circular performance to a variety of audiences is health and nutrition company DSM (established in 1902 by the Dutch Government as Dutch State Mines). It has been committed to circularity for many years, and in 2017 set a goal to become a fully circular company by 2030. It releases a yearly circularity report for the public, institutional investors, and shareholders and reports on its circular performance through its website, social media channels, and marketing materials. It also participates in industry events and conferences to disseminate its learnings and experiences about its circularity journey. In 2022, DSM was named the “Circular Economy Company of the Year” by Circular Economy Club (CEC); World Economic Forum and the Ellen MacArthur Foundation (EMF) have also recognized the company for its leadership.
Too often, circularity and sustainability reports lack substantive financial information, and this frequently leads to charges of greenwashing. The reason lies in the complexities of financing and accounting in relation to circular business models. The CE transition will require not only new financing models, but also a novel approach to accounting practices for CE products and services.
[For more from the authors on this topic, see: “Bending the Linear Economy to Circular: Accounting Complexities & Concerns.”]
