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Circular economy business models open up strategic advantages

Companies that invest in circular economy business models benefit from their investments. New research from Kearney shows that county leaders tend to significantly outperform their traditional rivals.

The survey of 150 companies from around the world looked at the advantages and disadvantages of circular economy models and found that 34% of the organizations surveyed can be defined as “leaders” in the landscape. These front-runners outperform the laggards on a number of metrics, including a 32% increase in sales and a 38% increase in cost savings.

The results are remarkable, according to the researchers, given the magnitude of the positive impacts measured – evidence of the growing impact that circular economy principles are having on the business landscape. Previously perceived as a cost to companies, the acceptance of sustainability can now also increase sales. In addition, companies with clear circular branding benefit from improvements in brand awareness and customer loyalty.

Commenting on the results, Kearney partner Yelena Ageyeva-Furman said, “The circular economy is the next step in the global economy’s journey towards a sustainable future. The report clearly states: The benefits of a circular strategy are not only environmental. In fact, those who implement circular initiatives benefit from significant monetary and reputational benefits. “

On average, companies surveyed by Kearney still use 32% non-renewable sources in their manufacturing processes. However, the future is bright: 40% of companies have made circular economy a top priority on their sustainability agenda.

The report comes at a critical time when the world is facing an increasing problem of resource scarcity and waste. Currently over 100 billion tons of materials are processed annually and over 91% of these materials are newly extracted from the ground. A circular economy is key to reversing this trend by eliminating waste and emissions.