The Circular Economy and What It Means for Your Business

Sage has released a White Paper that begins with noting that, “while CE strategies lead to greater profitability, the rewards extend well beyond financial gains. For example, greater sustainability can improve resource usage and operational efficiency, as well as enhancing brand image and reputation.”

It adds that, “although the road to sustainable practices can be challenging, our study found that organizations want to take advantage of sustainability and CE benefits. About one-third of respondents (43% in North America) said their organizations are already seeing the benefits. Another 32% said they expect to achieve gains from their CE investments in the next three years.”

According to the report, businesses across industry sectors are recognizing they must advance their CE and sustainability strategies to drive down waste, pollution, and energy use, and to create more cost-efficient operations. In doing so, they can minimize resource consumption, which increases the security of the supply chain by reducing dependence on global raw material supplies. And CE holds the potential to create new business models. For instance, Software as a Service (or similar on-demand shared services such as cloud computing) use centralized data centers and shared software platforms to reduce wasted capacity and shrink the environmental footprint.

“Ultimately, companies that make CE changes are seeing the benefits as they pursue what has been termed the four Rs: reduce, reuse, recycle, and recover,” it says.

In the Sage/Foundry survey, North American companies ranked themselves highly for their CE capabilities, with 67% saying they need minimal or no operational transformation, and only 7% saying major changes are required.

Conversely, European (30%) and South African (52%) companies said their organizations require moderate to major transformational changes to support a CE strategy. “Greenwashing” may be skewing those results. With greenwashing, a business reports it is environmentally or sustainability focused, when, in actuality, those efforts are only for the sake of appearances.

 The survey found that improved brand image and reputation was the No. 1 motivation for pursuing CE strategies. “Greenwashing can however, spur the organization into action to bolster its sustainability posture and reach the intersection between environmental and business goals. For instance, companies might be motivated to gain energy efficiencies and consequently reduce their carbon footprint.”

For much more, get the report at