THE NEW BIG CIRCLE
Achieving growth and business model innovation
through circular economy implementation

A joint report from the World Business Council for Sustainable
Development and The Boston Consulting Group

2 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

Content
1. Executive Summary
2. Introduction

4
6

3. Circular economy benefits
and performance

4. Three types of circular innovation
Process innovation
Product innovation
Business model innovation

10
12
15
16
17

5. Success factors and recommendations 18
6. Case Studies

24

AkzoNobel
C&A
CMPC
Cohealo
GREEN HOME
Hirdaramani
IKEA
LafargeHolcim
Michelin
Philips
RubiconSkanska
Solvay

25
26
27
28
29
30
31
32
33
34
35
36
37

7. Conclusion

38

8. About the research

39

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 3

1. Executive summary
State of current circulartrends and practices incompanies

Corporate leaders are increasingly
seeing the business and societal
value of strategies to re-use andrecycle resources—and are moving
toward what’s commonly known asa “circular economy.” This approachrethinks the traditional “takemake- dispose” economic model,
and envisions a new model that isregenerative by design.
The business benefits are expansive.
Innovations that foster resource
reuse can, for example, makecompanies less dependent on
scarce inputs, increase operational
efficiency and enable new offerings
that attract customers and deepen
existing relationships. It’s been
estimated that the transition to thecircular economy could unlock USD$4.5 trillion of GDP growth worldwide
by 2030.1 The societal benefits arealso numerous—making it easier toshelter, feed and clothe the 8.5 billion
people expected to inhabit the planetby 2030.
This report is the result of researchwhich included a survey of 78
managers from a variety of industries
around the world, and one-on-one
interviews with leaders to understandbest practices.

97%

of respondents said thatthe circular economy drives
innovation to help
make the company more
efficient and competitivein areas such as sourcing,product development andproduction processes

96%of respondents believethat the circular economy
is important for theircompany’s future success61%

Practical
recommendations to
successfully transition
towards a circular
economyWe learned that circular
implementation involves various
stakeholders at different stagesof the journey and calls for strong
collaboration all along the value cycle.
While each company is different,with its own unique challenges, we
distilled 10 recommendations for
putting circular initiatives in place.

10 recommendations
for implementation of
circular initiatives
1. Engage with external
stakeholdersof the surveyed companies
fund their circular projects
internally

2. Ensure consistent and strong
top management support

51%

4. Quantify specific ambitions
and develop a business caseof respondents statethat circular economy
activities already add tocompany profits50%

of respondents stated that
customers are the mostinfluential external group

3. Define “circular” andcommunicate the vision

5. Educate your employees
6. Engage and empowerbusiness units
7. Start with process innovation,then move to productinnovation and business model
innovation
8. Collaborate with external
partners
9. Define and align KPIs for goals
and accountability
10. Do good and talk about it

1

Lacy, Peter; Rutqvist, Jakob (2015): Waste to Wealth – The Circular Economy Advantage, New York/London: Palgrave Macmillan.

4 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

EXECUTIVE SUMMARY

Circular economy activities along the value cycle** Percentages below show the share of surveyed companies that are active and successful in each area.

32%

44%

BUY materials thatare regenerativeor recycled

47%

RAW MATERIALSDESIGNproducts thatare recyclable
and reusable

RECYCLE/NEW INPUTDESIGNPROCESSINNOVATIONCOLLECT
AND RECYCLE
products andmaterials at the endof their current life
to close the loop

54%

COLLECTPRODUCTINNOVATION

42%

BUSINESS MODEL INNOVATION

18%

USE
DISTRIBUTE

42%

PRODUCE41%

MAKE products
as waste-free andresource-efficientas possible

12%

SELL access(rather thanownership), leasingor sharing products

USE products responsibly, notexcessively, to extend their
lifetime and to reduce pollution

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 5

2. Introduction

6 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

INTRODUCTION

As the global population surges and more consumers enter the
middle class, the demand for commodities and raw materials
has dramatically increased. And the situation will only get morechallenging.
The United Nations estimates thatthe world’s population will reach 8.5
billion in 2030, an increase of 16%
since 2015. Without more sustainableagricultural and production practices,
housing, feeding and clothing somany people will severely strain theplanet’s natural resources.

There’s also the growing pressure
to reduce the environmental
impact to benefit society at large byimproving reusability, lowering energy
consumption and reducing pollution.
For private companies, that pressure
is coming in the form of increased
government regulations, consumer
demands and costs.
Pressure is also growinginternationally, evidenced by the
U.N.’s Sustainable Development
Goals, the first globally agreed toframework for sustainability.

The world’s
population will reach
8.5 billion by 2030
This impending resource scarcity
is just one reason that sustainable
development is at the top of theagenda among many governments,
private companies and nonprofit
organizations.

Reducing worldwide
resource use by only 1%
could save approximately
840 million tons of metals,
fossil fuels, minerals andbiomass annually—aswell as 39.2 trillion litersof water. We estimate that
could translate into potential
savings of approximately$80 billion for the global
economy.2$4.5 Trillion
The GDP growth that
could be unlocked
by transitioning to acircular economy

284%

of respondents said they
expect to increase theirinvestments in circular
economy projects in the
futureAt the same time, corporate leaders
have realized that a sustainability
focus can drive innovation andimprove competitiveness on many
fronts. With this in mind, we believe
leaders should embrace the circular
economy as perhaps the mostpromising way to accelerate theirown organizations and society as
whole toward a sustainable future.
As noted in WBCSD’s CEO Guide to
the Circular Economy, transition to
the circular economy could unlock
USD $4.5 trillion of GDP growth
worldwide by 2030, and thosekinds of numbers are catching theattention of corporate leaders. Thisis mirrored by survey results, in which
84% of respondents stated they
expect to increase their investments
in circular economy projects in the
future, and 96% said the circular
economy will help increase long-termvalue creation (for more about oursurvey please see Section 7 “About
the research”).

96%

of respondents statedthe circular economy
will help increase longterm value creation

https://www.bcg.com/publications/2017/sustainability-operations-urgency-opportunity-smart-resource-management.aspx)

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 7

INTRODUCTION

The circular economy is a new way oflooking at the relationships between
markets, customers and natural
resources. It moves away from thetraditional “take-make-dispose”
economic model to one that isregenerative by design. The goal isto retain as much value as possible
from resources, products, parts andmaterials to create a system thatallows for long life, optimal reuse,refurbishment, re-manufacturing andrecycling.3
For this reason, we discuss the circular
economy in terms of how it effects
the value “cycle” instead of the value“chain.” The circular economy requires
an evolution from linear thinking to oneof cycles. It’s a shift in mindset andbusiness practices that will disrupt
industries and business models,significantly reshape customer
demand and could prove to be thebiggest opportunity to transformproduction and consumption since
the first Industrial Revolution 250 years
ago.4“We see the value and future potentialof the circular economy. This is why weendeavor to ‘disrupt ourselves’ – rather
than be disrupted by others. Over the
next decade the circular economy will
become even more important for all
businesses,” said Markus Laubscher,a director in the Sustainability
Department at Philips, a Netherlandsbased health technology company.
By unleashing circular innovation,companies can act now to boost the
global economy’s resilience, support
people and communities aroundthe world and help fulfill the Paris
Agreement and the UN Sustainable
Development Goals. Without
immediate action, the consequencesof today’s “take-make-dispose”
mindset will be dire. By 2025, forexample, it’s estimated that two-thirdsof the world’s population could facewater shortages.5“The circular economy has thepotential to change the way we create
value, and relations with our customers
and other partners — for the better.
Thinking circular strengthens ourinnovation capabilities to further
develop more sustainable solutions
that unlock Solvay’s business growth
while doing good for the planet,” said
Jean-Pierre Clamadieu, CEO of Solvay,
a global chemical company.

Kenniskaarten: https://kenniskaarten. Hetgroenebrein.nl/en/knowledge-mapcircular-economy/definition-circulareconomy/
Lacy, Peter; Rutqvist, Jakob (2015): Waste to Wealth – The Circular Economy Advantage, New York/London: Palgrave Macmillan.
5
Source: https://www.worldwildlife.org/threats/water-scarcity
3
4

8 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

INTRODUCTION

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 9

3. Circular economy benefits
and performance

10 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

CIRCULAR ECONOMY BENEFITS AND PERFORMANCEAt the individual company level, implementing circular solutions
involves rethinking products and services using principles
based on durability, renewability, reuse, repair, replacement,
upgrades, refurbishment and reduced material use. By applying
these principles, companies can design out waste, increase
resource productivity and decouple growth from natural resource
consumption.
In our study, 96% of respondents
believe that the circular economy isimportant for their company’s future
success, and 51% of respondents
state that circular economy activities
add to profits. Given this strong
positive sentiment, we wanted tobetter understand how moving
towards the circular economy can help
business capture significant benefits,
including:
•
•
•
•
•

increased growth from newcustomers and deeper
relationship;
innovation and competitive
advantage cost reduction;
lower material and production
costs;
reduced energy consumption andCO2 emissions; and,risk mitigation by improving supply
chain and resource security.

In addition, we wanted to learn theextent to which adopting circular
economy principles could help
companies get ahead of government
policies and regulations, pricing
externalities and shifts in tax rules.
Our findings were enlightening, tying
real-world benefits and performanceto specific circular economy projects.
Respondents clearly stated thatengaging in the circular economy is
one way to address our serious natural
resource challenges and mitigate
business risk (93% consider it), as well
as reduce GHG emissions (96%) andwater pollution (83%).

Respondents also said thatthe circular economy drives
innovation (97%) to help
make the company more
efficient and competitivein areas such as sourcing,product development andproduction processes.
These findings around costs, businessrisk and innovation help explain why
sustainability and circular economy
principles are moving so decisively tothe top of the corporate agenda andare attracting greater investment.
Akzo Nobel’s CEO Thierry Vanlancker
aptly sums it up: “The circular economy
is a key element of the necessaryroute towards a sustainable society.
At AkzoNobel, we use circularprinciples to achieve radical resource
efficiency and to design out negative
externalities. This approach offers clear
benefits for the environment, for ourcustomers and for ourselves.”
Respondents’ optimism and strong
commitment to the circular economy
is no doubt influenced by the benefits
they’ve already seen. Amongrespondents, 51% stated that theircircular economy-related decisions
and actions added to profits while only
6% reported a negative impact on theirprofits.
What makes these results even more
impressive, is that consumers aremostly unwilling to pay a premium for
more sustainable and circular products,
and so companies are not using circular
initiatives to raise prices. In our survey,
only 10% of the companies stated thatthey are selling their circular products at
higher margins.

This means that companies are
reaping the financial rewards throughbetter operational efficiency (96%of survey participants cited this asa factor) and increased revenue by
deepening relationships with current
customers, winning new customers
who are attracted to circular products/
solutions (93% cited this as factor).
Financial rewards also take the formof reduced risk, easier financing andaccess to new markets. The overall
effect is a more robust business. The
circular economy helps to “transformcustomer relations from transactionbased contacts to strategic, long-term
partnerships,” said Nikhil Hirdaramani,a member of the Board of Directorsof Hirdaramani Group, an apparel
manufacturer based in Sri Lanka.
Figure 1: Effect of circular economy
on profitability
How do your company’s circular economy-related actions/decisions affect its profitability?
(%) of respondents

60

51%

40

30%

20

14%
6%

0

Added toprofitBrokeneven

Subtracted Don’t know
from profit

Figure 2: Margins of circular
economy products
If your company develops circular economy-specific products,
are they ... sold with superior margins?
(%) of respondents

48%

50
40

42%

30
20
10
0

10%
Yes

No

Don’t know

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 11

4. Three types of circular innovation

12 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

THREE TYPES OF CIRCULAR INNOVATION

To start their circular economy journey, companies need to innovatewith circular principles in mind from the outset.
There are three types of circularinnovations with progressing degrees
of complexity that should be tackled
in stages. “Start with circular economy
as early as possible in the project orprocess,” suggests Jenny Adholm,
Sustainability Lead at Skanska.

Figure 3: Frequency of process, product and business model innovation
There are different types of innovation. Please evaluate the status of each innovation type in your company’s circular economy activities

Process
Innovation

54%

Product
Innovation

14%

42%

Business
Model
Innovation

18%

0

12%

20

24%

26%

40

6%

8%

4%

60

13%

9%

5%

9%

8%

8%

Decision taken, project still in planning phase
Not yet active - might consider in the future
Not active
Don’t know

41%

80

Active and successful
Recently started to be active

100

1

2

3

Process innovation

Product innovation

Business model innovationis generally the easiest since mostcompanies have always been
engaged in traditional process
innovations. It involves thedevelopment and implementationof new or significantly improved
production, logistic or recycling
methods.

is somewhat more difficult
because it touches more areasof the organization. It involves thedevelopment and introductionof new or significantly improved
goods or services.

is the most challenging because
it involves significant changes
and/or the creation of a new logic
around how a company generates
value.

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 13

THREE TYPES OF CIRCULAR INNOVATION

Taken together, these three types of innovation touch all aspects of the value cycle. Below we will share how
companies are pursuing innovation in each stage of the value cycle.
Figure 4: Circular economy activities along the value cycle

RAW MATERIALSBUY materials thatare regenerativeor recycled

DESIGNproducts thatare recyclable
and reusable

RECYCLE/NEW INPUTDESIGNCOLLECT
AND RECYCLE
products andmaterials at
the end of theircurrent life toclose the loop

PROCESSINNOVATIONCOLLECTPRODUCTINNOVATION

MAKE products
as waste-free andresource-efficientas possible

PRODUCE
BUSINESS MODELINNOVATIONUSE
DISTRIBUTE

SELL access(rather thanownership), leasingor sharing products

USE products
responsibly, notexcessively, to extend
their lifetime and to
reduce pollution

Figure 5: Frequency of circular economy projects along the value cycle
Please select in which of the steps your company actively performs circular economy

Design

32%

Buy

17%

13%

44%

Make

23%

41%

Sell

12%

Use

14%

22%

13%

19%

42%

Collect &Recycle

20

15%

8%

6%

6%

13%

12%

8%

6%

41%

9%

18%

40

12%

24%

23%

47%

0

12%

60

10%

18%

8%

10%

80

Active and successful
Recently started to be active

13%

5%

4%

Decision taken, project still in planning phase
Not yet active - might consider in the future
Not active
Don’t know

8%

100

14 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

THREE TYPES OF CIRCULAR INNOVATION

1. Process innovation

For several reasons many companies
moving towards the circular economy
start with process innovation.
Generally process innovation
involves the operations areasof the business and therefore isconsidered within the direct controlof the business. Many employees
are also familiar with adjusting to new
production processes. And sincecustomers are not directly affectedby changes in production processes,
these innovations often pose lessrisk.
Among our survey respondents, 54%
said they are active and successful inprocess innovation, which primarily
involves production (i.e., “make”) as
well as collecting and recycling thewaste created during production
processes.

54%of all respondents said they
are active and successful inprocess innovation47%of respondents said they are
active and successful in thecollecting and recycling stageof the value cycle

100%of respondents from thepulp and paper industry are
active and successful in thecollecting and recycling stage

Survey respondents said they were
somewhat more successful with the“collecting and recycling” stage ofthe value cycle: 47% said they wereactive and successful in this area,
although activity in this area varied
significantly among industries.
The most active was pulp and paper.
In the survey, 100% said they are
active and successful in this field.
Sri Lankan apparel manufacturer
Hirdaramani constructed its
Hirdaramani Knit – Agalawatta(‘Mihila’) plant with four sustainability
focus areas in mind - energy
consumption, water consumption,
waste reduction and improving
biodiversity. From the very start,
the company thought in terms ofsustainability, even the location of
the factory was selected considering
the rainwater-harvesting requirement
for running operations at the factory.
Hirdaramani then focused on theoperation of low energy ventilationand cooling systems, while also
seeking out circular technologies
to reduce water consumption, suchas rainwater harvesting and waste
water recycling.
The plant, which opened in
2008, has a production area ofapproximately 96,000 square feet,a capacity of up to 70,000 standard
hours, and employs more than
1,000 people. Although it was costly
to build — 30-40% higher than aconventional plant — the investment
has paid off in many ways. Energy
use is 48% less than a conventional
plant, water consumption is 70%
less and the plant sends zero waste
to landfills. As a result, the Mihila
plant has earned international
certifications and awards such as
the LEED Gold Certification.

CMPC is a Chilean pulp andpaper company that turned waste
treatment from a cost into a profit.
Maintaining the commitment to local
community, when CMPC acquired
the Brazilian pulp operations, andas a way to continue treating andrecycling solid waste the company
kept the association with Vida. In a
conventional plant, only 22% of thewaste can be reused (in agriculture);
25% is incinerated and 53% go tolandfill.
But thanks to its circular economy
efforts, the mill in Brazil now has
recycling rates of 99%, which means
almost 600,000 tons of industrial
waste is not going into landfills. What’smore, Vida earned US$1 million in
the last five years by selling products
from recycled waste that once
created costs. In fact, the project has
been so successful that CMPC plans
to expand these processes to all its
plants in Latin America.
“At CMPC, circular solutions are
not only a means to do good forthe environment by establishingsustainable processes, but also ameans to make our company morevaluable. By changing our recycling
practices, we were able to turnproduction waste - that created afinancial loss before - into profit,” said
Hernán Rodriguez Wilson.

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 15

THREE TYPES OF CIRCULAR INNOVATION

2. Product innovation

Product innovation is more
complicated than process innovation
given its broad impact on the value
cycle: procurement (i.e., “buy”), productdevelopment (i.e., “design”), howcustomers use the product (i.e., “use”)
and how the company can “collect andrecycle” finished goods.
Innovative thinking is critical, which
often requires recruiting and training
employees, cooperation among
employees with different skills fromvarious departments (e.g., R&D/design,
procurement, operations) and theinclusion of external partners withdifferent skills and/or resources to
produce circular products. Customer
demand may drive product innovation,or the company might use productinnovation as a testing ground-ameans to constantly learn about
customer needs and develop newmarkets.

42%

of respondents are active
and successful in productinnovation
Among those seeing themselves
as industry leaders in the circular
economy, this percentage increases
to 62%; while among those who seethemselves as average, only 33%
describe themselves as active andsuccessful. A closer look at the value
cycle finds that procurement, or “buy,”
is relatively easy to accomplish: 44%of companies from the survey are
active and successful in the buying
stage, even though it often means
finding new suppliers and forging newpartnerships.
A second part of the value cycle
touched by product innovation is“design.” To be successful with design,companies need to educate and train
employees about circular principles
and practices. It can prove quite achallenge. Only 32% of the companies
in our survey say they are active andsuccessful in the design stage of thevalue cycle, though some have madeprogress. “If products were designedwith their next use in mind, people
could more easily reuse and recycle
those products,” said David Rachelson,
Vice President of Sustainability at
Rubicon Global.

South Africa-based GREEN HOME
produces and sells plant-based,biodegradable food packaging using
raw material such as sugarcane, plantstarch, wood and wood fiber. Founder
Catherine Morris got the idea for“circular packaging” during a trip to
Thailand where she saw packaging
made from organic material. She
started her business less than a year
later, at first doing research on potential
raw materials by herself and eventuallyhiring designers to develop the
products.
“Circularity is at the core of ourcorporate strategy. When I founded
the company, still a lot of education ofcustomers had to be done. This haschanged a lot in recent years. Bothbusiness and private customers are
more aware of sustainability and thecircular economy today and demand
for recyclable products,” Morris said.

44%of respondents are active
and successful in the buying
stage of the value cycle
IKEA has introduced new designprinciples that can be bundled together
to extend the product life. “It’s about
seeing products as ‘material banks’
for the future. And from the very
beginning design them so they can be
repurposed, repaired, reused, resold
and recycled in any other way,” says
Malin Nordin, Development Leader
for Circular IKEA. To this end, IKEA isconstantly developing, testing andimplementing new offerings withdifferent solutions that deliver true
value for the money. For example, with
IKEA’s Modular VIMLE sofas customers
can create their own combinations,removing or adding modules if theirneeds change (e.g., moving to a smaller
or bigger apartment). IKEA also offers
a wide selection of cover styles tochange the look of the sofa or replace
covers that are worn out or dirty.

Finally, there is the “use” part of thevalue cycle—how customers actually
use the product. Under circular
economy principles customers
should be able to use products
responsibly, not excessively, in order
to extend their lifetime and reduce
pollution. According to our survey,
42% of companies are active andsuccessful in this stage of the value
cycle.

32%of respondents say that theircompanies are active andsuccessful in the design
stage of the value cycle
C&A is a family-owned, Dutch business.
The companies’ circularity journey
started when the company asked
William McDonough, founder of Cradle
to Cradle (C2C), to speak about C2C
at C&A’s annual shareholder meeting.
His presentation sparked excitement
for how fashion could contribute tosustainability, and the company createda task force (including BCG and others)
to assess potential circular activities
and create an “ecosystem” of internaland external stakeholders to pursue
these activities.
The C&A’s first circular productinnovation was a C2C-certfied, fully
bio-degradable t-shirt. Even though at-shirt is one of the easiest products
to design and produce, meeting C2C
standards was challenging. C&A
needed to find alternatives for polyesteror nylon stitching, new care labels,
as well as dyestuffs by innovating
within the existing value chain. Despite
these challenges, employees were
enthusiastic and proud to participate
in the sustainability effort alongside
management and in close cooperation
with new and existing partners.
Ultimately, C&A launched a mass
market, price-competitive C2C t-shirt
in the early summer of 2017 in its retailstores in Europe. It was one of thebest-selling products in the company’s
history and enjoyed margins on par withconventional products. Furthermore, thet-shirt helped attract new customers
and increase the value of the average
shopping basket. With this pioneering
work, C&A proved existing products
can be redesigned with CE principles ataffordable prices for the mass market.

16 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

THREE TYPES OF CIRCULAR INNOVATION

3. Business model innovation

Business model innovation is themost challenging concept towards
a more circular economy because
it can change the entire value cycle,
including how products are marketed
and sold to customers. Thus,business model innovation is moredifficult to accomplish, especially forlarge corporations in conservative
industries.
Only 18% of the companies from oursample are successfully engaged
in business model innovation. Evenamong the circular leaders, only
about one-third are successful withbusiness model innovation.

18%of companies are active
and successful in businessmodel innovation“Process innovation is always
tough to implement but we havebeen doing it for decades andhave gained valuable experience.
Product innovation requires new
ways of thinking from designers andcollaboration with new partners andsuppliers and is thus more difficult.
We are in the process incorporating
circular ingredients into products,
such as recycled and renewable
content in plastic products andmaking spare parts available forrepairs. In contrast, businessmodel innovation is an even greater
challenge. We are testing and piloting
circular initiatives, but still struggle tofind scalable solutions,” says Nordin
of IKEA.

Unlike process or product innovation,business model innovation also
touches on how the product isbeing sold—the “sell” stage of thevalue cycle. To make the transition,companies often need to devote a lotof time and resources to educating
customers, trying to change
consumption habits that are deeply
ingrained (e.g., leasing or sharing
instead of buying). Only 12% of thecompanies are active in this stageof the value cycle, though somecompanies are making inroads.
Cohealo is a US-based technology
company founded in 2012 thatdeveloped a cloud-based platform,
which allows healthcare systems toschedule, track and share medical
equipment. That’s a big deal in theindustry because health systems
usually spend millions of dollars onpurchasing and renting equipment,
yet utilization rates for owned
equipment is often below 50%.
Because hospitals have limited
resources and can’t afford to buy all
available equipment, they will often
rent equipment on a case-by-casebasis. This can result in astronomical
rental costs. Additionally, hospitals
don’t have hard data on equipment
utilization, making it difficult todetermine whether the patient case
volume exists to justify the purchasefor new, cutting edge technology.
From the beginning, Cohealo’s
founders believed technologysupported collaboration amonghospitals could help to facilitate
positive clinical outcomes and lower
costs. Today, the company is growing
by over 1000% year-over-year.

Michelin, the French manufacturerof tires, is pressing forward with
innovations such as selling tires
as a service. Trucking, airline andmining companies can choose to
be charged based on the numberof kilometers travelled, the numberof landings made or the weighttransported using the Michelin tires.
As part of the service, the company
takes care of every aspect of tire
management, including selection,
mounting, maintenance, assistance,
retreading and end-of-life recycling.
These solutions use onboard
pressure monitoring systems tooptimize preventive maintenanceand reduce vehicle downtime. Wellmaintained tires last longer, whichis good for the planet and good forcustomers’ business.
Because transportation customers
are very price sensitive, Michelin has
spent significant time educatingthem about the benefits of tiresas-a-service. By 2017, Michelin
solutions managed the tires of morethan 400,000 trucks and light trucks
in 18 countries. The goal is to double
revenue from their services andsolutions businesses by 2020.
“Circularity has an impact on
every aspect of our product’s
lifecycle - from the design of ourcycles to recovery and recycling.
Our sustainable growth strategy
particularly relies on circular
economy levers which help us todevelop innovative processes andproducts,” said Michelin CEO JeanDominique Senard.

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 17

5. Success factors andrecommendations

18 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

SUCCESS FACTORS AND RECOMMENDATIONSEach company is different, of course, with its own unique challenges.
But in our discussions with managers, especially those who consider
themselves leaders in the circular economy, we have identified
several common success factors and best practices that every
company should bear in mind as it initiates, implements and markets
circular solutions to customers.
Here are 10 recommendations
to implement circular economy
principles into any business:#1: Engage with external
stakeholders

External stakeholders often play
an important role in pushing thecircular economy to the top of
the corporate agenda so it makes
sense to be proactive. Customers
have their own sustainability goals.
Government agencies and regulators
are setting requirements. NGOs andlocal communities are embracing
sustainability to improve local qualityof life. Investors are prioritizing
sustainability and will divest fromindustries/companies that are notsustainable; meanwhile, suppliers andcontractors face similar pressures, aswell as from the media, public opinion
and opinion leaders.
More than 50% of survey
respondents said customers were
one of the most influential externalgroups.

50%of respondents stated that
customers are the mostinfluential external group

For example, customers areencouraging AkzoNobel and Solvay
to develop chemical products thatare more sustainable.
And LafargeHolcim, a construction
materials company, conductedfocus groups to better understandcustomers’ needs and concerns
around the circular economy, anapproach that is still remarkably rare.
While survey respondents said
that media, suppliers and local
communities generally play a minor
role in bringing circular to the agenda,
our survey found that the influenceof stakeholders varies a lot fromindustry to industry. For example,
regulations are strongly influencing
circular adoption in construction andpulp and paper. “It is important not
to rely on the market, but to enforce
the change by regulation,” stated Dr.
Dirk A. Schwede former manager at
the consulting firm energy design inShanghai and currently Robert Bosch
Junior Professor for Sustainable
Building at the University of Stuttgart.

#2: Ensure consistentand strong top
management support

Respondents cited management
as the most important internal
stakeholder for driving circular
initiatives. Without leadership fromtop management, the organization
will not deploy the necessaryfinancial and human resources.
Most circular projects are financed
internally: almost 61% of thecompanies in our survey fund theircircular projects internally, while 21%
receive grants or public support for
their circular activities.

61%of the surveyed companies
fund their circular projects
internally

21%of the surveyed companies
receive grants or public
support for their circular
activities

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 19

SUCCESS FACTORS AND RECOMMENDATIONS

In half of the surveyed companies, top
management made the decision to
engage. This vocal and visible support
is also vital to maintain momentum
and build enthusiasm for the circular
initiatives among the rank-and-file.
Engaged leadership understands
the potential relationship of circular
initiatives—that decrease costs
or unlock new profit pools—andcompetitive advantage.
For example, Solvay’s top
management brought sustainability
to the agenda, emphasized
its importance and secured
executive committee support todrive implementation. “Our senior
executives wanted to unlock new
business potential by closing theloops,” stated Dominique Debecker,
Deputy CSO at Solvay.

#3: Define “circular” andcommunicate the vision

As basic as it might sound,management must take the timeat the outset to clearly define what“circular” means for the company—
both strategically and operationally.
This will ground the circular concept
and make it easier for management
to communicate with employees. The
definition is unique for every company
and helps to foster a common viewinternally. According to Malin Nordin,
Development Leader for Circular IKEA:“From the beginning, we had clear
communication of what the circular
economy means to IKEA.”
Figure 7: Incorporation of circular
economy strategy into othercorporate strategies
Where is your company’s circular economy strategy incorporated?
# of respondents

Figure 6: Internal stakeholder groups
giving impulse to bring circular
economy to the agenda
Which internal stakeholder groups were the most importantto give the initial impulse to bring circular economy to yourcompany’s agenda?

15

60

10

19
10

10

Em
pl
oy
ee
s

HS
SE

Bu
s
un ineit esde Strpa atertm gy
en
t

m
an To
ag p
em
en
t
Su
st
a
de bo inapa ar brtm d/ ility
en
t

0

1

2%

Calculated based on survey results: For each ”top 1” rating, 3 points
were given, 2 points for each “top 2” and 1 point for each “top 3”

su P
s a
st tain rt ora a fte bilgy ity

25
20

7%

0

0%

0%
Do
n’t
kn
ow

5

40

bu P
s a
st ine rt ora ss f
te u
gy ni
t
No
ne
ab o
ov f th
e e

60

co Pa
st rpo rt ora ra f
te te
gy

64

49%
42%

ci S
rc ta
ul nd
st ar e alo
ra co nte n egy om
yScore125
20Management also needs to explain thestrategy and rationale. In most cases,
the circular strategy is incorporated
in companies’ overall sustainability
strategy (49%) or corporate strategy(42%). Only 7% have a standalone
circular strategy.

#4: Quantify specificambitions and develop
a business caseAccording to our survey findings, 81%of companies with a circular strategy
also have a clear business caseunderlying it. Among those companies
who do not have a circular strategy,
only 39% have a circular businesscase. Given the higher costs often
associated with circular activities
compared to traditional activities,
the business case for circularity is
usually strongly linked to acquiring newcustomers, strengthening existingcustomer relationships (increasing
volumes, cross-selling, long-term
contracts, etc.) or opening newmarkets.

81%

of companies with a circular
strategy also have a clear
circular business caseTo build enthusiasm and focus
among employees to pursue thisbusiness case, leaders should
quantify their ambitions and set
goals to get the organization moving.
Ambitious, measurable goals drive
action, create accountability andemphasize the need for change. “We
endeavor to disrupt ourselves –rather
than be disrupted by others,” saidMarkus Laubscher, a director in the
Sustainability Department at Philips.
Figure 8: Frequency of sustainability
and circular economy strategy
Overall, has your company developed a clear business case ofproven value proposition for its approach to CE?
(%) of respondents

66%
60

34%

40
20
0

20 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

Yes

No

SUCCESS FACTORS AND RECOMMENDATIONS#5: Educate youremployees

Particularly in the first year of change,
leadership should consistently
reinforce the importance of thecircular idea with employees—who
must bring the circular vision to life.
These communications should
aim to change the mindset of
employees from thinking in value
chains to thinking in value cycles. It’sa transformation that in all likelihood
will require the corporate culture tochange. It’s never too early for thisindoctrination. At GREEN HOME,
for example, the importance ofsustainability is put front and center
during the recruiting and interviewing
process.
And companies need to back up
talk with training. For example,
those in operations neededucation in dematerialization
and remanufacturing, while thosein design need to be trained inpractices to extend productlifetime, eco-design (including theconsequences of using certain
materials in the design) andrecyclability. Companies must also
train employees on the merits andthe practice of cooperation. As
noted earlier, product and businessmodel innovation in particular require
cooperation between different
functions and departments.

Philips has developed training
materials and tools to educate
business leaders on design for reuse,recycling and refurbishment. This
spurs them to generate their own
ideas for sustainable products andservices. After all, education andtraining are not just about developing“technical” skill, they are also about
encouraging creativity and outof-the-box-thinking. “Flexibility inthinking and the way you do things isrequired,” said Martijn van Loon, RD&I
Operations Manager at AkzoNobel.

16%

of survey respondents say
it’s easy for employees tosuggest specific circular
activities or projects
Many of the leaders surveyed noted
how receptive employees are to
being educated about the circular
economy, how much they enjoy being
involved in circular economy projects,
and their cooperation in adapting thecorporate culture accordingly. “Ouremployees are very proud to work at‘Mihila’” said Nikhil Hirdaramani. “Theywere highly involved in the circular
economy activities right from thestart and very motivated to develop
sustainable solutions.”

An open culture that supports
internal cooperation is needed soskills and competences from various
backgrounds can be combined todeliver new, sustainable solutions
and implement circular economy
projects. This is something that many
companies struggle with. Only 16%
of survey respondents said thatit’s easy for employees to suggest
specific circular activities or projects.

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 21

SUCCESS FACTORS AND RECOMMENDATIONS#6: Engage andempower business units

Although sustainability departments
may initiate and incubate circular
economy projects (46% do so), thecore business is responsible for
implementing and scaling these
initiatives. This is smart because
sustainability is not an isolatedcompetency, but a mindset that
potentially impacts all types ofbusiness activity.
Almost half of the companies in thesurvey said business units ultimately
take over project responsibility anddrive the change, while only 18% of
the sustainability departments took
responsibility for implementation.
For this handoff to succeed, top
management must make certain thatsustainability departments involvethe business units early.
This handoff is made smoother whencircular principles are integrated
into the project teams. And, indeed,most companies in our survey (54%)
have integrated circular economy
principles into existing project
teams within the business units. For
example, at Solvay, circular principles
are embedded into daily business:“We do not have a standalone
sustainability roadmap but rather
embed sustainability and circularity
in each business unit and into our‘normal customer relation,’” stated
Dominique Debecker. “The circular
economy is not a change process
anymore but an integral part of ourcore business activities.”

Figure 9: Transformation of circular economy activities from top-down
to bottom-up
Please state which stakeholder group inside your company ...
24%... first
recognized CE
opportunity

40%
6%
49%

... took
decision to
engage in CE

19%
13%
13%

... incubated
CE

46%
15%
6%

... took over
responsibility andimplemented

Top management
18%
49%

0

10

20

#7: Start with process
innovation, then moveto product innovation
and business model
innovation

30

Given the previous section’s
discussion on product, process
and business model innovation, thisrecommendation needs the least
explanation. It suffices to say that it
makes sense to start with the least
disruptive change first. Then basedon that foundation of early success,it’s easier to explore new productopportunities. Only after circular
thinking is well-established, does itmake sense to consider the big step ofbusiness model innovation—an area
where even many circular leaders are
struggling.

40

50

Sustainability board
Business Units(%) of respondents#8: Collaborate withexternal partners

It takes an array of skills and new waysof thinking to develop circular products
and processes. The most successfulcompanies do not try to develop or
acquire all of these skills internally-a
probably fruitless task. Instead theycollaborate with a variety of external
partners, from suppliers to research
institutions to NGOs, which has theadded benefit of expediting circular
projects. Sometimes this collaboration
can even span across industries. Afterall, one industry’s waste could be
another industry’s raw material.
Time and again, managers at leading
circular companies extoled the valueof collaboration. Nordin at IKEA said:“You can’t do it on your own!” At C&A,
Donald Brenninkmeijer said: “Finding
the right partners and suppliers
and having the ability to bring thosepartners together was a key successfactor to develop the C2C t-shirt.”
A further example is AkzoNobel’s
effort to turn waste into chemicals.
The project, which started in 2014,is investigating the feasibility ofusing waste as a feedstock to makechemicals. A consortium of partners
with different backgrounds andcompetences aims to establish afunctioning plant in the Netherlandsin the near future, which would be thefirst such facility in Europe.

22 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

SUCCESS FACTORS AND RECOMMENDATIONS#9: Define and alignKPIs for goals andaccountability

The circular economy promises
improved sustainability,competitiveness and profitability.
In our survey, two-thirds of thecompanies had a clear business caseor proven value proposition; among
circular leaders, 95% reported having
a business case. However, the only
way a company can prove a businesscase is by having the right KPIs inplace to measure progress. Regular
reporting both internally and externally(to customers, investors, public,etc.) is also important to maintainaccountability. Among companies
in our survey, about half have KPIs inplace to measure circular progress,
but only a third regularly report those
KPIs.
KPIs do not necessarily need to be
circular specific, especially not at firstsince they are often measured against
traditional projects with traditional
metrics such as ROI or NPV. Today
most companies use general KPIs
such as ROI (51% from our survey),
amortization rate (41%) or net present
value (31%) to track their circularjourney. At the moment, there areno generally accepted circular KPIs,
though some leaders are working todevelop them. And some companies
are trying to track the “true costs” oftheir goods or services to society (e.g.,
by applying internal carbon pricing toquantify the cost of pollution).

One company active in thedevelopment and use of circularspecific KPIs is Solvay, which has
created the Sustainable Portfolio
Management tool (SPM) that links
strategy and sustainability. The toolassesses two aspects of Solvay’s
portfolio: (1) the monetized risk of its
environmental impact (i.e. Where isSolvay “part of the problem?”) and (2)the extent to which it helps consumers
to address their own sustainable
development concerns (i.e. Where
is Solvay “part of the solution?”).
Today, an internal team analyzes theentire portfolio with the SPM tool ona yearly basis; then each business
unit and the company’s sustainable
development function discusses
next steps. According to Dominique
Debecker, “measuring environmental
and social impacts is key and a means
to detect potential next challenges andopportunities. It makes our strategy
more robust. Solving a problem
here while creating another problem
somewhere else isn’t good enough.”Solvay and other circular leaders
are also starting to align their annual
reporting with Global Reporting
Initiative (GRI) standards to bringgreater transparency to their circularefforts. GRI is an international
independent standards organizationthat helps businesses, governments
and other organizations understandand communicate how their activities
and supply cycles impact climatechange, human rights and corruption.

#10: Do good and talkabout it

When circular initiatives are pursued
correctly, they create tangible
business and social benefits: among
them, more efficient processes,
compelling new products andservices, adjacent growth andenhanced brand equity. Circular
products and services generally
don’t support a price premium
over traditional offerings; however,sharing information about circular
initiatives can attract new customers,
strengthen existing relationships andsatisfy investors.
Today, just 42% of the companies
specifically market their circular
products as such. But given thatcircular initiatives can translate into
greater profits (although there is nota green price premium), promoting
a company’s circular projects iswell-worth the effort. Moreover,as noted, investors increasingly
consider sustainability when making
investment decisions and will divest
from companies if they consider acompany’s non-sustainable practices
too risky. The bottom line is thatcompanies who “do good” should talkabout their efforts.

42%of companies specificallymarket their circular products

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 23

6. Case Studies
Overview of Case Studies:
BUSINESS CASEINNOVATION TYPE MENTIONED IN CASE STUDY
INDUSTRYCOMPANY

Chemicals

AkzoNobel

TextilesC&A

VALUE CHAIN

PROCESS

BUSINESSMODELPRODUCTROLE OF TOP
MANAGEMENTKPI
SYSTEM

COSTRELATEDGROWTHRELATED

Sell

Use

Collect & Recycle

Wood & Packaging CMPC
HealthCare

Cohealo

Wood & Packaging GreenHome
TextilesHirdaramani

Wood & Packaging IKEA
Construction

LafargeHolcim

Transport

Michelin

HealthCare

Philips

Transport

RubiconConstruction

Skanska

ChemicalsSolvayATTRIBUTE

SCALE

Value Chain
Buy

DesignMake

Role of Top Management
Recognized
opportunity

Took decision to
engageIncubated CE

Took over
responsibility andimplemented

KPI System
No CE KPI's and/or
reporting

Reporting based on
general KPIs

Dedicated CE
report and/or KPIs

24 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

COLLABORATIONAPPENDIX: CASE STUDIES

20%

These included improving resource
efficiency across the value cycle by, forexample, reusing packaging to reduce
waste, and increasing revenues fromdownstream eco-premium solutions
to 20% of total revenue by 2020. The
long-term goal is to eliminate carbon
emissions.

“

After senior management put the
topic on top of the agenda, it tasked
the individual BUs with driving theimplementation and encouraged
a strong sense of ownership forsustainability initiatives across theorganization. To track progress, thecompany settled on a set of KPIs andincorporated a sustainability report
into the annual corporate report.
Today, people from different
departments collaborate to develop
circular solutions, and the company
cooperates with external partners toaccess the necessary expertise forsustainability innovations. “Flexibility
in thinking and the way you dothings is required,” states Martijn vanLoon, RD&I Operations Manager at
AkzoNobel.

Additionally, AkzoNobel develops
new sustainable products in close
cooperation with customers andsuppliers who are trying to meettheir own customers’ demands forsustainable products. For example, it
introduced the first fully compostable
and recyclable coating for paper cups.

The circular economy is a key element of the necessaryroute towards a sustainable society. At AkzoNobel,
we use circular principles to achieve radical resource
efficiency and to design out negative externalities.
This approach offers clear benefits for the environment,for our customers and for ourselves.

Credit:Hummel Fotografie

Thierry Vanlancker
CEO, Akzo Nobel“

AkzoNobel is a global leader
in coatings and specialty
chemicals. Sustainability
is well embedded in theorganization and is a core
operational principle, with
the CEO as a high-profile
ambassador, AkzoNobel
dubbed its sustainability
strategy “Planet Possible”
and set ambitious goals.

of AkzoNobel’s total revenue
to come from eco-premiumsolutions by 2020

One example of flexible thinking andstrong collaboration with external
partners is AkzoNobel’s effort to turnwaste into chemicals. The project,which started in 2014, is investigating
the feasibility of using waste as afeedstock to make chemicals.
A consortium of partners with different
backgrounds and competences aims
to establish a functioning plant in the
Netherlands in the near future, which
would be the first such facility
in Europe.

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 25

CASE STUDIESThe company’s recent circularity
journey started when the
Brenninkmeijer family asked William
McDonough, founder of Cradle
to Cradle (C2C), to speak about
C2C at C&A’s annual shareholder
meeting. His presentation sparked
excitement for how fashion could
contribute to sustainability, and thecompany created a task force toassess potential circular activities andcreate an “ecosystem” of internal andexternal stakeholders to pursue these
activities.

“

The C&A’s first circular productinnovation was a C2C-certfied
t-shirt. Even though a t-shirt is one of
the easiest products to design andproduce, meeting C2C standards
was challenging. C&A needed tofind alternatives for polyester ornylon stitching, new care labels, aswell as dyestuffs. Despite thesechallenges, employees were
enthusiastic and proud to participate
in the sustainability effort alongside
management and in close cooperation
with new and existing partners (e.g.,
suppliers, manufacturers, Fashion forGood).

Ultimately, C&A launched a mass
market, price-competitive C2C t-shirt
in the summer of 2017 in its retailstores in Europe. It proved immensely
popular—indeed it was one of thebest-selling products in the company’s
history—and enjoyed margins on
par with conventional products.
Furthermore, the t-shirt helped attract
new customers and increase the valueof the average shopping basket. It alladded up to a very powerful businesscase that will pave the way for more CE
products.

2017

The year in which C&A
launched their first mass
market, price competitive
C2C t-shirt

To help other fashion brands with theirsustainability efforts, C&A publisheda “how-to guide” and shared insights
and lessons learned. On an industrylevel, it is a first step towards more“good” fashion.

The journey towards circularity is a change that we shouldmake for future generations. It is a journey that requires
strong collaboration within and across industries. We as
C&A can be a leader and that’s our clear ambition. But
we cannot do it on our own. The more stakeholders join
forces, the more of a change can be achieved.
Alain Caparros
CEO, C&A

26 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation“

Founded more than 170
years ago as a Dutch
textiles company, C&A isa family-owned businessthat today is at the forefrontof circularity in the fashionindustry.

The task force created the “Fashion forGood” initiative based in Amsterdam.
It aims to encourage and help thosein the fashion industry adapt good
circular practices in five areas:materials, economy, energy, waterand lives. Fashion for Good embodies
C&A’s belief that the fashion industry
must work together toward circularity.
“We cannot roll the stone all the way up
by ourselves,” Donald Brenninkmeijer
said.

CASE STUDIES“The company has been incorporating
circular principles into its strategy by,for instance, using recycled fibers andefficiently consuming raw materials
and water.
Last year, CMPC created a corporate
sustainability area and one of themain goals is to support the circular
economy efforts on both thecorporate and the BU level. Every
BU has one dedicated sustainability
manager.

While CMPC does not market its
circular products explicitly as such,and cannot pass along higher prices,it considers these projects necessary
as a way to attain sustainability. For
example, its partnership with Vida has
given the company the possibility ofcreating 180 local jobs.

At CMPC, circular solutions are not only a mean to dogood for the environment by establishing sustainable
processes but also a mean to make our company morevaluable. By changing our recycling practices, we wereable to turn production waste - that created a financial
loss before - into profit.
Hernán Rodríguez
CEO, CMPC“

Empresas CMPC
is a Chileanbased producerof solid wood
products, pulp,
paper, packaging
and tissue withcustomers in 45
different countries
across the world.

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 27

CASE STUDIES

Additionally, hospitals do not have hard
data on equipment utilization, making
it difficult to determine whether thepatient case volume exists to justify
the purchase for new, cutting edge
technology.

That’s a big deal in the industry
because health systems usually spend
millions of dollars on purchasing andrenting equipment, yet utilization rates
for owned equipment is often below
50%. Because hospitals have limited
resources and cannot afford to buy
all available equipment, they will often
rent equipment on a case-by-casebasis. This can result in astronomical
rental costs.

“

From the beginning, Cohealo’s
founders believed that technologysupported collaboration amonghospitals could help to facilitate
positive clinical outcomes and lower
costs: “Our hospital partners arealways working on ways that they
can do more and better, with less,”
explained Brett Reed, co-founder and
CEO at Cohealo. Besides offering
technological support to facilitatesharing, Cohealo works closely withcustomers on using the analytics
generated from the platform for
smarter, data-driven capital expense
planning. With sharing in place,hospitals can collectively purchasea single piece of equipment, or makefewer purchases overall, because what

Cohealo’s model has a clear businesscase for itself and its customers,
helping to push the industry towards
more sustainable solutions. “Cohealo
partners with hospitals to help solvefor one of the most overlooked
challenges in healthcare: how
hospitals can make the most of their
medical equipment. By allowing
hospitals to share equipment between
facilities, we’ve been able to deliversignificant cost savings to our clients.
Our sharing capabilities, as well as theresulting equipment utilization data,
has been attractive to investors,” said
Reed.

Cohealo partners with hospitals to help solve for oneof the most overlooked challenges in healthcare: how
hospitals can make the most of their medical equipment.
By allowing hospitals to share equipment between
facilities, we’ve been able to deliver significant costsavings to our clients. Our sharing capabilities, as wellas the resulting equipment utilization data, has been
attractive to investors.
Brett Reed
CEO, Cohealo“

Cohealo is a US-based
technology company
founded in 2012 thatdeveloped a cloud-based
platform, which allows
healthcare systems toschedule, track and share
medical equipment.

a hospital might need is already in the
network and has excess capacity.

28 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

CASE STUDIESFounder Catherine Morris got the idea
for “circular packaging” during a trip
to Thailand where she saw packaging
made from organic material. She
started her business less than ayear later, at first doing research on
potential raw materials by herself andeventually hiring designers to develop
the products.

“

Some of GREEN HOME’s customers
purchase the products to meettheir clients’ growing demand forsustainable solutions (e.g., cafés,
restaurants, and corporate canteens).
Other customers are not motivatedby sustainability per se but by theefficiencies of composting. For
example, mines that can compost
green waste on-site instead ofshipping it elsewhere.

GREEN HOME’s commitment toeducation extends to its recruitment
and training process. Most new
employees don’t arrive with a deep
environmental awareness, so
educating them about the importanceof sustainability and circularity has
proven crucial to the company’s
success.
Given the comparably higher cost for
the raw materials that go into GREEN
HOME’s products, the margins are a bit
smaller than conventional, high quality
plastic packaging. Even so, they are
priced competitively, and the businesscase is strong given the growing
demand for sustainable packaging
solutions. Indeed, growth has notbeen limited by demand, but by thecompany’s own production capacity.

Circularity is at the core of our corporate strategy. When I
founded the company, still a lot of education of customers
had to be done. This has changed a lot in recent years
and both business and private customers are more awareof sustainability and circular economy today and demand
for recyclable products.
Catherine Morris
CEO, Green Home“

Established in 2007 in
South Africa, GREEN HOME
produces and sells plantbased, biodegradable
food packaging using raw
material such as sugarcane,plant starch, wood and woodfiber.

Early on there was little demand forbiodegradable food packaging inSouth Africa, but Morris worked toeducate potential customers andhas helped to make biodegradable
products more mainstream. Today,
B2B and end customers generally
know what biodegradable andcompostable mean and companies
advertise their use of such materials.

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 29

CASE STUDIES

Hirdaramani was foundedin the early 1900s as atailor and retail store in
Colombo, Sri Lanka. Today, it
partners with many leadinginternational apparel brands
including Levi’s, Patagonia
and Tommy Hilfiger. With
38 production facilities
across Sri Lanka, Vietnam,
Bangladesh and Ethiopia,
the company is involved
in all aspects of the value
cycle: product development,
manufacturing, printing,embroidery, washing andpackaging.

“

Hirdaramani is a family-owned
business and has been involvedin corporate social responsibility(CSR) for many years, largely bysupporting local communities andempowering their employees. But theenvironmental dimension of CSR got
a big push around 2005. At the time,with the industry quickly consolidating,Hirdaramani saw sustainability as away to differentiate itself and createdan environmental sustainability
agenda based on four pillars: energy,
water, waste and biodiversity.
The company involved local
communities early-on byeducating students on eco-friendly
manufacturing, and it built internal
enthusiasm by empowering
employees. “We tried to make it a
topic that employees are interested
in. It is a mindset that needs tochange,” states Nikhil Hirdaramani, amember of the Board of Directors. To
accomplish these goals, the company
avoids a heavy handed top-down
approach and instead makes surethe business units are involved in all

circular activities, with support from a
dedicated sustainability department.
Admittedly, lower production costs do
not offset the higher building costs.
However, the factory confers otherbenefits. As Hirdaramani had originally
hoped, its sustainability offering is adifferentiator that few competitors canmatch. This has helped the company
grow its business by evolving manycustomer relationships from beingtransactional in nature to more longterm and strategic. Furthermore, thecompany’s focus on sustainability has
improved recruitment and retention.
People want to work for the company;
employees are proud and want toremain.
Given the multitude of interconnectedstakeholders in the global fashionindustry, no single company can makethe change to sustainability on its own.
Looking forward, Hirdaramani wants
the industry to cooperate across theentire value cycle, and to this end iswilling to share insights to develop
sustainable solutions.

Today the fashion industry is very fast moving andcost-driven. Building our ‘Mihila’ plant was a long-term
investment that helped us to push customer relations to
the next level. Our circular production is a unique selling
proposition which helped us to establish new, long-term
partnerships with customers instead of transactionbased relations.

“

Nikhil Hirdaramani
Member of the Board of Directors of Hirdaramani Group

30 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

CASE STUDIES

IKEA’s sustainability journey
started 50 years ago,spurred both by an internal
conviction that sustainability
was a matter of corporate
responsibility and, if done
correctly, a way to lower
costs.

“It’s about seeing products as ‘materialbanks’ for the future. And from the very
beginning, designing them so they canbe repurposed, repaired, reused, resold
and recycled in any other way.” To thisend, IKEA is constantly developing,
testing and implementing new offerings
that deliver true value for the money.

Those early first steps toward circularity
succeeded in lowering production
costs by reducing packaging material
and using waste as a resource. IKEA
also began cooperating with the World
Wildlife Fund (WWF) to study its waste
stream to understand which materials
ended up where and how they could be
used alternatively. That work paid off.
By 2016, 89% of waste was recycled
or energy recovered. As Malin Nordin,
Development Leader for Circular IKEA,
puts it: “We need to be resource smart
to keep low costs.”

At IKEA, BUs implement circular
projects using their own project teams(e.g., for material innovation, purchasing,design). According to Nordin, circular
economy process innovation is thefirst step and IKEA has been engaged
in traditional process innovation foryears. (Although circular is a morecomprehensive framework for process
innovation). Product innovation, on
the other hand, requires a new wayof thinking. Designers, partners andsuppliers need a deep understandingof customer needs and be able totranslate those needs into products
and business models. For both typesof innovation IKEA demands a clear
business case, including non-monetary
benefits such as higher customer
acquisition and retention.

Today, top management is committed
to continuing the transformation of
IKEA’s offering and business modelusing circular principles, especiallygiven customers strong awarenessaround consumption and waste anddesire for more value in what they buy.
The company sees circularity principles
as a way to reach more customers,
being more affordable and enabling
more people to live a sustainable life
IKEA wants to create.

To foster innovation and confidence
in the entire circular effort, IKEA
leadership has taken the time to clearly
define what it means by circular andarticulate a comprehensive change
management strategy. IKEA has also
introduced design principles for internal
use to develop products that canlast longer by being reused, repaired,recycled, resold based on renewable
and recyclable materials. “You can’t do iton your own,” Nordin said.

IKEA has set ambitious circular goals
that it tracks using agreed upon KPIs.
For example, one aim is to eliminate
waste from all operations by 2020.
The IKEA Sustainability Strategy,
People & Planet Positive, is currently
being updated with new ambitious
commitments and goals on circularthat will guide the transformation intoa circular business to by 2030. Targets,
progress, challenges and solutions
are detailed in an annual sustainability
report available to the public.

over 9500

articles will have circularcapabilities to fulfill ourambition to become fully
circular

At IKEA, we aim to create a better everyday life for the many
people that are impacted by our business. The circular
economy helps us to rethink our processes, products,
customer meetings and even our business model to create amore sustainable future. Despite the great progress we havealready made in the past, transforming IKEA into a circularbusiness remains a big challenge that we can only achievethrough collaboration. We need to work together to achieve
faster and greater success than we ever could alone.
Torbjörn Lööf
CEO Inter IKEA Group““

However, IKEA has found that businessmodel innovation is the biggest
challenge, and today it’s testing
different business models in order toextend product lifetimes. Examples
include: taking back old furniture,providing spare parts for furniture,organizing refurbishment workshops
for customers and reselling usedfurniture. The challenge is to findscalable solutions with a clear businesscase. Any new business case-evenone built on clear customer needs
and demands--must factor in how
customer interactions will change, andhow this change will affect the entire
value chain and costs.

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 31

CASE STUDIESHeadquartered in
Switzerland, LafargeHolcim
is a leading global
construction materials andsolutions company witha presence in around 80
countries employing nearly
90,000 people.
The company first took up thesustainability cause in the mid-1990s
thereby differentiating itself anddriving the emergence of a sustainable
construction sector. Solutions
designed to help customers meet EU
targets for recycling and reuse underthe Horizon 2020 program is just one
example.
Prior to starting the circular initiativein the area of product innovation,
LafargeHolcim conducted focus
groups to understand customer needs
and concerns.

They learned that customers wereprimarily worried about the quality ofmaterial derived from recycling, andso the company addressed this issue
from the start.

80 million tons

amount of waste
LafargeHolcim aims to reuseeach year by 2030
Today, LafargeHolcim’s sustainability
strategy is articulated in The 2030
Plan which describes the company’s
ambitions and, among othercommitments, defines targets totransform waste into resources for
production processes. By 2030, thecompany aims to reuse 80 million
tons of waste each year, and to supply
four times more recycled aggregatesfrom construction, demolition waste
and reclaimed asphalt pavementcompared to 2015.
One specific circular solution is thecompany’s aggneo offering, which
provides high quality aggregatesprocessed from recycled concrete.

A LafargeHolcim global brand, aggneo
is managed by a dedicated team of
specialists who help set up projects
in a country and then the local teams
drive the actual implementation.
For example, in 2016 Bouygues
Construction partnered with thecompany in France to renovate two
heritage buildings in Paris. Thanks toaggneo they converted 100% of theconstruction and demolition waste
into ready-to-use concrete products(18%) and road gravels (82%).
Even with this kind of demonstrated
success the construction industry
remains conservative when it comesto sustainability. According to MarkTomlinson, Business Development
Manager at LafargeHolcim, this may
persist until regulations really comeinto force. “Enforcement of regulation
is fundamental” to kick-off circular
initiatives in construction. In the future,
Tomlinson expects that urbanization
will steadily drive disposal prices
higher and with it the demand for morerecycling solutions.

32 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

CASE STUDIES

Circular principles can impact allstages of the tire lifecycle, starting withthe design of the product and ending
with its recycling. This continuum isreflected in Michelin’s “4R strategy,”which it developed to educate clientsand anchor circular principles within
the organization itself: Reduce (develop
tires that are lighter, last longer andsave fuel); Reuse (repair, re-groove
and retread tires); Recycle (improvematerial and energy recovery); andRenewable (use renewable materials
for manufacturing). According to B.
Bonhomme “introducing CE is more
a question of behavior and not about
technical training.”“

20%

percentage by which Michelin
aims to further reduce thecarbon footprint of their tiresby 2030This 4R framework also helps
Michelin’s circular economy
transformation committee track thecompany’s progress toward becoming
an industry leader in performance andsustainability by 2020, a goal inspiredby the global climate deal adopted
at the Paris climate conference. To
better measure progress toward thesegoals and make regular reports to the
executive committee, the company
uses tailored KPIs developed in part bysharing insights with other companies.

While process and product innovationpose challenges, it’s been businessmodel innovation that’s proven themost difficult to implement. Evenso, Michelin is pressing forward with
innovations such as selling tires as aservice. Trucking, airline and mining
companies that choose this businessmodel are charged based on thenumber of kilometers travelled, or thenumber of landings made or the weighttransported using the Michelin tires.

Michelin began its circular
implementation by focusing on
process innovation to improve
production and resource efficiency,
and then moved onto productinnovation. By developing durable tires
that offer long-lasting performancewith less weight and material, Michelin
hopes to continue shrinking its tires’carbon footprint by 20% between 2010
and 2030.

As part of the service, Michelin
takes care of every aspect of tire
management, including selection,
mounting, maintenance, assistance,
retreading and end-of-life recycling.
These solutions use onboard pressure
monitoring systems to optimize
preventive maintenance and reduce
vehicle downtime. Well-maintained
tires last longer, which is good forthe planet and good for customers’
business.

Achieving that goal would reduce CO2
emissions by 30 million tons while also
lowering material and production costs.
For example, the company developed
an all-season tire called CrossClimatethat uses less raw materials, improves
fuel efficiency and lasts longer thancompetitors’ tires (6,430 km longer
on average). The product launchedwith great success in 2015, and thefollowing year sales volume jumped
30% in Europe, Turkey and Russia.

Because transportation customers arevery price sensitive, Michelin has spentsignificant time educating them about
the benefits of tires-as-a-service andby 2017 Michelin solutions managed
the tires of more than 400,000 trucks
in 18 countries. The goal is to double
revenue from its services and solutions
businesses by 2020.

Circularity has an impact on every aspect of our product’s
lifecycle - from the design of our cycles to recovery andrecycling. Our sustainable growth strategy particularly
relies on circular economy levers which help us todevelop innovative processes and products.
Jean-Dominique Senard
CEO, Michelin“

Michelin, the French
manufacturer of tires,produces 187 million tires
per year and operates in
170 countries. It’s helped
shaped the market for morethan 125 years, and now
the company is working todevelop innovations that
address environmental
challenges associatedwith transportation. “The
whole company strategy
is sustainable,” statedBertrand Bonhomme, Headof Sustainability and Chairof the circular economy
working group at Michelin.

To stimulate new thinking and new
partnerships, the company schedules
regular meetings on circular economy
projects that bring together employees
from different backgrounds and featureexternal speakers.

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 33

CASE STUDIES

Its credo is that one “cannot have
healthy people on an unhealthyplanet,” and, with that in mind, Philips istransforming its business toward being
green. This includes an accelerationin the innovation process to develop
solutions that help customers respondto operational and competitive
challenges while also becoming moresustainable.

“

Besides appealing to customers,
sustainability needs to appeal toemployees. Getting the whole
company on board is critical for
success. To this end, the company
works hard to communicate the valueof circular thinking.

It’s now widely understood thatcircular thinking is not an inconvenientnecessity, but a driver of innovation
for more efficient processes, valuable
products and new business models.
Philips invests in training and tools
to educate employees on reuse,recycling and refurbishment—andthen encourages them to come up
with their own ideas for sustainable
processes, products and businessmodels.
For example, with healthcare
provider budgets coming underincreasing pressure, Philips is looking
for solutions to extend resources
without compromising productquality. In response, Philips created its
Refurbished Systems business unit,
which offers refurbished products
such as MRI systems that reuse
components like magnets, and costjust 60% to 85% of a new system.

We expect the circular economy to replace the traditional“take-make-dispose” scheme. At Philips we aim to takeback all capital equipment from our hospital clients. We
expect this to become a win-win business model. Thereis much residual value to recover. We endeavor to “disrupt
ourselves” by rethinking and redesigning the way we dobusiness. This will contribute to a better world.
Frans van Houten
CEO, Philips

34 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation“

Headquartered in the
Netherlands, Philips isa global leader in healthtechnology. More than two
decades ago, Philips began
to ask itself questions
concerning sustainability,
such as: What is ourfootprint and how can we
reduce it? Since then,the company’s focus onsustainability and circularity
has steadily increased.

The initial drive for circular economy
thinking came from the Executive
Committee, which decided it wanted
to drive transformation with asustainability agenda at the core.
Philips looks for opportunities where
social and environmental benefits
can translate into a strong businesscase and competitive advantage,
with the ultimate goal to shift thebusiness model from selling products
to selling services and solutions.
According to Markus Laubscher, aPhilips Director of Sustainability andCircular Economy, developing a clear
value proposition for customers is key
for commercial success: “If you havethe same product in green and nongreen alternatives, the customer isoften unwilling to pay a price premium;
you have to deliver a new value
proposition.”

CASE STUDIES“As part of its mission, Rubicon
educates its customers’ employees
on waste separation and recycling.
It also connects clients with its
independent hauler network, which
offers competitive prices, on-demand
pickups, billing transparency and evena report on the customers’ recycling
efforts. And Rubicon collaborates
with other companies along thecircular economy value cycle tocreate sustainable offerings for its
small business customers, such as
Michelin, which offers discount pricing
on new commercial tires and retreads,
and TerraCycle, an expert in hard-torecycle waste.
Rubicon’s growth outlook is brightas more and more companies,
customers and regulators push toward
the circular economy. The company
employees close to 300 employees
and has raised over $200 million offunding to date. In 2016, Forbes named
Rubicon one of the next Billion-Dollar
Startups, and in 2017, Inc. named it oneof the Top 25 disruptive companies.
“The circular economy laid thefoundation for building a company thatis reinventing the waste industry - Ourbusiness model is circular by design,”
said CEO Nate Morris.

The circular economy laid the foundation for building
a company that is reinventing the waste industry - ourbusiness model is circular by design.
Nate Morris
CEO, Rubicon“

Rubicon is a technology
company that was founded
to help companies
reduce costs andincrease sustainability
by improving their waste
and recycling practices.
Today, the Atlanta-based
company supports small
businesses across awide range of industries,
such as restaurants
and food service, retailstores, hospitality andmanufacturing.

Using technologies such as visual
recognition and machine learning, thecompany conducts an initial screeningof a client’s waste streams to identify
types of waste and quantities,
develops a waste separation system,and then tailors a waste collection
schedule. This helps customers
improve their recycling rates, lower
costs by reducing the frequency ofwaste collection, and sometimes
earn extra income from selling therecyclable products (e.g., carton,
paper).

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 35

CASE STUDIESSkanska is one of theworld’s leading construction
and project development
companies, focused on
selected home markets in
the Nordics, other European
countries and North
America. Sustainability isimportant to how Skanska
builds for a better society.
Skanska’s strategic work withenvironmental aspects of sustainability
started about 20 years ago. In the
beginning, Skanska’s circular activities
focused on reducing materials
used in constructing buildings andinfrastructure, and diverting fromlandfills the significant amounts ofwaste traditionally generated byconstruction projects. This has evolved
to include more sustainable uses ofmaterial through reuse, recycling andrenewable materials. Since 2000, all
Skanska business units have beencertified to ISO 14001 standards-the requirements for a certifiable
environmental management system.
To guide and measure environmental
performance, in 2009 Skanska
developed the Skanska Color
PaletteTM. This strategic tool focuseson guiding activities and projects
toward near-zero environmental
impacts by reducing uses of energy,materials, water and embodied carbon.

“

Environmental responsibility isembedded into all parts of Skanska’sbusiness processes and project
operations. For example, Skanska
business units have environmental
plans fully integrated into businessplans, and most projects havetailored, measurable key performanceindicators, such as ones for chemical
usage and waste. Another proactive
aspect to Skanska’s green efforts iscollaborating with universities andother external institutions and partners
when developing solutions.

Concrete is a massive resource on thisproject; at the end of 2017, more than
40,000 cubic meters of concrete had
been used, with more to come. With
all those concrete pours, sometimes
there is leftover concrete. Rather than
the traditional practice of wastingthat concrete, Skanska re-purposes
leftover concrete to create concrete
blocks usable in other construction
projects. The concrete blocks areprimarily sold on the market. Instead ofcreating waste, a new product is being
made.

In a major step, Skanska hascommitted to significantly reducing
carbon emissions by 2030 inalignment with the Paris agreement.
Increasing circular economy activities
is expected to be an important part ofthis reduction. Ultimately, Skanska is
striving to be the leading green project
developer and contractor, while also
creating shareholder value and helping
improve society.

Sustainable materials is also an
important area for this project. Asmuch as possible, materials are to be
free of substances with a negative
impact on the environment, both tocreate a healthy work environment andto facilitate future recycling and reuseof materials.

An example of Skanska collaboratingwith customers and suppliers to raise
environmental achievements is theEuropean Spallation Source (ESS),
which aims to be the world’s firstsustainable research facility. Skanska
is designing and building this panEuropean research facility, which has
ambitious goals such as zero waste tolandfill and zero concrete waste.
To meet this mega project’s goals,
Skanska and the customer are
focused on being preventative. “Think
about solutions, not about problems,”
said one Skanska manager.

ESS is committed to using energy
wisely and in a responsible way. The
excess heat from the research facility
will be captured and distributed in
the local district heating system.
Also, all electricity is from renewablesources, during construction and later
during facility operation. “Skanska
focuses on the sustainability areas
through which we can make the mostsignificant positive contributions tosociety. Important to this is using – andre-using – materials in smart ways.
Taking a circular approach helps lower
environmental impacts and costs,
helping our customers achieve theirown environmental ambitions,” said
Skanska CEO Johan Karlström.

Skanska focuses on the sustainability areas throughwhich we can make the most significant positive
contributions to society. Important to this is using – andre-using – materials in smart ways. Taking a circularapproach helps lower environmental impacts and costs,
helping our customers achieve their own environmental
ambitions.

“

Johan Karlström
CEO, Skanska

36 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

CASE STUDIES

organization’s mindset by emphasizing
training and acquiring the right skills.
Today, sustainability and circularity areembedded in each business unit andin customer relations.

To this end, they created a guide—
the “Solvay Way”—to translate
Solvay’s ambitions for sustainablevalue creation into clearly assigned
responsibilities and concrete action at
the operational level.
Once Solvay’s leaders recognized thatsustainability and circular economy
principles created an opportunity forlong-term competitive advantage,
they worked hard to integrate theprinciples of circularity into the“

To measure its progress on
sustainability, Solvay also developed
the Sustainable Portfolio Management
tool (SPM) that links strategy andsustainability. The tool assesses two
aspects of Solvay’s portfolio: (1) themonetized risk of its environmental
impact (Where is Solvay “part ofthe problem?”) and (2) the extent towhich it helps consumers to address
their own sustainable development
concerns (Where is Solvay “part of thesolution?”).
As with the sustainability initiative
itself, leadership played a key role byendorsing the SPM methodology andsetting clear goals. Today an internalteam analyzes the entire portfolio with
the SPM tool on a yearly basis; theneach business unit and the company’ssustainable development function
discuss next steps.
In 2016, 43% of the revenues wereassociated with sustainable products,
whereof two-thirds deliver on circular
economy objectives. During thattime the company grew revenue

43%of Solvay’s revenues in2016 were associated withsustainable products
Besides process and productinnovation, Solvay is exploring ways
to use circular economy principles
in business model innovation. As
Dominique Debecker, Deputy CSO
at Solvay put it, “At some point you
need a system that is self-sustained.
Where you have a tangible productfor consumers, you don’t need to wait
for new regulation. The increasing
consciousness became the driving
force for sustainability.”

The circular economy has the potential to change theway we create value, and the relations with our customers
and other partners - for the better. Thinking circularstrengthens our innovation capabilities to further develop
more sustainable solutions that unlock Solvay businessgrowth while doing good for the planet.

Jean-Pierre Clamadieu
CEO, Solvay“

At Solvay, a global chemicalcompany headquarteredin Brussels, sustainability
has moved from being a
regulatory necessity to adriver of product innovationand growth. Solvay’s CEO
led the charge and put
sustainability at the topof the agenda, winningsupport from the executive
committee to become aleader in circularity.

from products where Solvay is “partof the solution” by 9%, and shrunkrevenue from products where Solvay
is “part of the problem” by 3%. Solvay
managed these results despite thefact that customers are unwilling to
pay a premium purely for sustainability.
Part of Solvay’s success is because
it doesn’t redesign existing products
in a more sustainable way, instead it
looks for niches and unmet demand tocreate new, sustainable products fortheir customers.

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 37

CONCLUSION

7. Conclusion
The need to use resources
more sustainably in orderto guard against priceswings and scarcity, toconform to regulations andto satisfy increasingly vocal
local demands to protect
the environment might be
all the reason a company
needs to embrace thecircular economy. Yet, there
are still other compelling
reasons to do so.

The circular economy is a driver for
innovation and competitive advantage,
and recent experience shows there
is room to improve performanceby creating sustainable processes,
products and business models. Thatmeans that companies who pursue
circular principles first could gain asignificant competitive advantage as
they drive the transformation of theirown industries and put competitors on
their heels. Companies at the forefrontof the circular economy are alreadyseeing a clear business case, often in
the form of new customers, deeper
relationships and more steadfast
investors.

The time to act is now. As Donald
Brenninkmeijer, whose family owns
C&A, a Dutch textiles company, put it:“We still have a long way to go but it is
the way forward.”

38 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation

ABOUT THE RESEARCH

8. About the research
In 2017, the World BusinessCouncil for Sustainable
Development (WBCSD)
and The Boston Consulting
Group (BCG) joined forces
to study key successfactors in circular economy
implementations based ona quantitative survey of 78
managers and more than adozen qualitative interviews.
The global sample wasdrawn from a variety ofsources including WBCSD
member companies andBCG clients.

We purposefully reached out tosustainability leaders from manyindustries around the world to gain
insights into successful circular
economy implementations. Of the
respondents, 95% said their company
had a sustainability strategy inplace. Based on a self-assessment
comparing themselves to othercompanies in their industry, mostsurvey respondents evaluatedthemselves as either an industry
leader in the circular economy (29%)
or above average (31%).
In addition to the survey results,
we conducted interviews withpractitioners to gain a deeper
understanding of success factors
in a circular implementation. These
interviews offered valuable insights
into the roles of internal and external
stakeholders, organizational
integration of circular principles,decision processes and so forth.

Based on the findings from thequantitative and qualitative data
sources, we developed case studies,derived key success factors andidentified hands-on recommendations
for the implementation of circular
projects.
This is the third guide in WBCSD’s
circular economy series. The first was“The CEO Guide,” which explains thecircular economy and its benefits; thatwas followed by “The Practitioners
Guide,” which describes circular tools,
resources and practices for different
functions (e.g., sales, product design,and manufacturing). Together thesethree guides can advise the entire
organization along its entire circular
economy journey.

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 39

INTRODUCTION

40 THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementationACKNOWLEDGEMENTS

CONTRIBUTORSWBCSD would like to thank the following
authors and editors for this report:

BCG Contributors		
Kristina Blinda, Consultant
Sophie Zielcke, Consultant
Coralie Grau, Associate
Hanna Marie Asmussen, Associate
Frederik Brandis, Associate
Lena Bayer, Visiting Associate
Sonja-Katrin Fuisz-Kehrbach,Knowledge Expert for Sustainability
Miriam Benedi Díaz, Senior Knowledge
Analyst for Sustainability
Matthew Clark, Global Marketing
Director, Strategy
Michael Sisk, Writer

Holger Rubel is a Senior Partner andManaging Director in the Frankfurt officeof The Boston Consulting Group andis BCG’s global topic leader for green
energy & sustainability. You may contact
him by email at rubel.holger@bcg.com
Marc Schmidt is a Partner and Managing
Director in the Singapore office of
The Boston Consulting Group and isleading BCG’s Asia-Pacific sustainability
activities. You may contact him by email at
schmidt.marc@bcg.com
Alexander Meyer zum Felde is a Principal
in the Hamburg office of The Boston
Consulting Group and is BCG’s expert
principal on the sustainability topic. You
may contact him by email at meyer.zum.
felde.alexander@bcg.com
Maria Mendiluce is Managing Director
at the WBCSD. You may contact her by
email at mendiluce@wbcsd.org
Andrea Brown is the Director of Circular
Economy at the WBCSD. You may contact
her by email at brown@wbcsd.org
Brendan Edgerton is Manager of Circular
Economy at WBCSD. You may contact
him by email at edgerton@wbcsd.org.
Juliet Taylor is Manager ofCommunications at WBCSD. You may
contact her by email at taylor@wbcsd.org

The authors would also like to thank the
many participating companies and theirrepresentatives, who greatly enhanced
the outcome of the report with theirvaluable insights and contributions.
DISCLAIMER
This report is released in the name of
WBCSD. Like other reports, it is the resultof collaborative efforts by WBCSD staff,
experts and executives from member
companies. Drafts were reviewed by awide range of members, ensuring thatthe document broadly represents the
majority view of WBCSD members. It
does not mean, however, that every
member company of WBCSD agrees
with every word. Please note that thedata published in the report are as ofDecember 2017.

ABOUT THE WORLD BUSINESSCOUNCIL FOR SUSTAINABLE
DEVELOPMENT (WBCSD)
WBCSD is a global, CEO-led organizationof over 200 leading businesses working
together to accelerate the transition toa sustainable world. We help make ourmember companies more successful andsustainable by focusing on the maximum
positive impact for shareholders, theenvironment and societies.
Our member companies come fromall business sectors and all major
economies, representing a combined
revenue of more than $8.5 trillion and 19
million employees. Our Global Networkof almost 70 national business councils
gives our members unparalleled reachacross the globe. WBCSD is uniquely
positioned to work with member
companies along and across value chainsto deliver impactful business solutions to
the most challenging sustainability issues.
Together, we are the leading voice ofbusiness for sustainability: united by our
vision of a world where more than ninebillion people are all living well and within
the boundaries of our planet, by 2050.
www.wbcsd.org
Follow us on Twitter and LinkedIn
Credits
Copyright © WBCSD January 2018

WBCSD and BCG thank the following companies for their active participation

THE NEW BIG CIRCLE – Achieving growth and business model innovation through circular economy implementation 41

World Business Council
for Sustainable Development
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Chemin Eugène-Rigot 2B
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