The need for partnerships

The global economy currently consumes 70% more resources than the Earth can regenerate, yet only 7.2% of material inputs entering production processes originate from circular sources. To reverse over-extraction and ease constraints on growth—such as critical mineral shortages—businesses must decouple economic growth from resource consumption.

While circularity offers value through resilience, new revenue streams, and resource efficiency, 94% of executives identify partnerships as a critical enabler for unlocking this value. Solo initiatives are insufficient; organisations must collaborate beyond their immediate value chains to source recycled inputs, find buyers for by-products, and transform operating models.

Three archetypes for circular value creation

The report identifies three strategies for value creation, which can be combined to suit specific organisational goals:

Circular feedstock: Replacing virgin materials with circular inputs. This is vital for short-lifespan goods like packaging. For instance, Ball Corporation recycles aluminium using only 5% of the energy required for virgin aluminium production, securing financial and environmental benefits.

Lifespan extension: Reducing manufacturing output by repairing, refurbishing, or remanufacturing durable goods. Schneider Electric found that 94% of customers were interested in a take-back platform, prompting them to reconfigure product designs for easier disassembly and repair.

Circular platforms and services: Reinventing business models, such as ‘as-a-service’ offerings. Hewlett Packard Enterprise (HPE) transitioned to subscription-based models to reduce IT inefficiencies and waste, partnering with data centre providers to scale these services for mid-sized companies.

Circular partnerships to accelerate the transformation

Successful circular strategies rely on identifying ‘control points’ (critical sources of value like material access) and ‘inflection points’ (factors accelerating cost-competitiveness). Partnerships allow companies to access these points faster and more cost-effectively than developing in-house capabilities.

Archetype 1 (Feedstock): Indorama Ventures partnered with small-scale waste bailers in the Philippines to consolidate plastic waste, and with a major bottling client to build a recycling facility, thereby securing supply and demand simultaneously.

Archetype 2 (Lifespan): Siemens is implementing a product passport and collaborating with a global network of 134 repair centres to ensure traceability and extend product life, increasing customer adoption of circular goods.

Archetype 3 (New Markets): Ralph Lauren collaborates with resale platforms and technology providers to validate product authenticity via digital IDs, overcoming trust barriers in the secondhand market.

Circular coalitions to drive precompetitive agendas

Systemic changes, such as industry standards and policy shifts, require precompetitive collaboration.

The Circular Electronics Partnership (CEP) includes over 20 businesses working to facilitate the cross-border movement of end-of-life electronics, currently piloting a digital prior informed consent (e-PIC) procedure to reduce administrative costs.

The Global Battery Alliance (GBA), with nearly 150 members, developed a ‘battery passport’ to standardize data on material provenance and sustainability, increasing transparency and consumer confidence in the electric vehicle value chain.

Conclusion

To maintain competitiveness and avoid market disruption, CEOs should take the following five steps:

• Determine which value creation archetype best suits their organisation.
• Identify necessary control points (materials or technology) for their future value chain.
• Define levers to influence inflection points, such as lowering production costs.
• Formulate a clear partnership strategy to access control points and accelerate adoption.
• Establish or join value chain-wide coalitions to build necessary infrastructure beyond their individual organisation.