The circular economy is gaining more power on the corporate agenda. Challenges like resource availability, volatile commodity prices and changing consumer preferences are forcing us to rethink wasteful and inefficient models of production and consumption. In our view, shifting from a linear to a circular economy means preserving existing value, protecting the environment and making optimal use of resources, materials and products. This brings economic, as well as social and environmental, value.
More companies are now designing products or services from the start for longer-term use, reuse and recycling. Markets are increasingly disrupted as leasing and sharing business models challenge traditional “linear” models of product manufacture, ownership and disposal.
Moreover, authorities are recognizing the potential of the circular economy to drive business competitiveness, sustainable economic growth and job creation. China, Japan and the EU are among those with circular policy strategies and programs.
For businesses adopting circular models, benefits include greater efficiency and profitability, less waste and cost, better innovation and stronger relationships with customers. Research suggests that the economic opportunity for business is huge. In Europe alone, adopting circular principles could generate a net economic benefit of €1.8 trillion (US$2 trillion).[1]
However, unlocking these benefits demands a dramatic shift from business-as-usual to blue-sky circular thinking. Strong specialist capabilities in developing and implementing circular policies and strategies is critical.
How we can help
Our experts combine skills in strategy, innovation, business modeling and finance to help you understand the challenges you face. They have the knowledge and experience to help you move from linear to circular.
Our team can help your business, no matter what stage you are at on your circular journey:
1. Research and trend analysis:
- Analyze the market and conduct benchmarking: Our analysis provides insights into how other businesses in your sector and beyond are approaching circularity and implementing circular strategies;
- Understand regulatory trends: Our professionals analyze the regulatory landscape and identify the risks and opportunities for your company;
- Engage stakeholders: We can help you engage your stakeholders, both internal (e.g. senior management, business units) and external (e.g. suppliers, customers, investors) to identify their needs and expectations regarding circularity and your business.
2. Identify and assess circular risks and opportunities:
- Identify circular risks and opportunities: Our specialists conduct a material flow analysis to identify and map circular risks and opportunities in your business. Based on this analysis, they identify the circular solutions – ranging from process and product to business model innovation – that are most suitable for your company;
- Model the impact of the circular opportunities: Our analysts use advanced modeling tools to assess the costs, benefits, risks and effects of the identified circular solutions;
- Measure the impact on your balance sheet: Our professionals use financial modeling tools and simulations to help determine the financial implications of circular solutions on your business.
3. Develop strategy:
- Select the most appropriate circular solutions to implement: Our advisers work with you to identify which circular opportunities are strategically right for your business. They help you determine what is needed to implement these solutions, including skills and competencies;
- Design the circular strategy and implementation plan: Our professionals help you to design a strategic approach to make your business more circular. They work with you to quantify your ambition level and set goals, targets and performance monitoring metrics. They help you create an implementation roadmap for your circular strategy;
- Build capability: Our specialists help your business build its circular capabilities through internal training and education programs;
- Collaborate with external organizations: You can accelerate circularity in your business by collaborating with trusted universities, research bodies, NGOs, vendors and others. We can help you forge the right partnerships to drive your circular strategy forward.
4. Implement strategy:
- Execute circular strategy across business functions: Our advisers help you put your circular strategy into practice. This includes supporting change management activities;
- Monitor, track and report on performance: Our analysts use advanced digital tools to help you measure and report on the impact of your business's circular strategy;
- Our professionals can also measure and value the positive impact your circular initiatives have on people and the environment using the KPMG True Value impact measurement and valuation methodology;
Continue to build capacity across the organization: We can work with you to continue to identify training needs across your company and build on your circular capabilities.
[1] Working Group FINANCE (2016) Money makes the world go round (PDF 3.45 MB)
