Introduction

The report examines the role of a circular economy within the industrial goods sector, defining it as an economic system focused on reducing waste and reusing resources. The circular economy aims to close the loops of production and consumption, thereby minimising the extraction of new materials and reducing environmental harm.

To understand how companies are advancing towards a circular economy, the report surveys around 50 firms from various regions and industries. It aims to provide a framework for evaluating the circular economy performance of these companies, identifying best practices and key areas for improvement.

Circular design and production

The report highlights that effective circular design and production practices are essential for sustainability. Companies can enhance product durability, recyclability, and ease of repair. Notable examples include Siemens Gamesa, which developed the first fully recyclable wind turbine blade, and Daikin Industries, which has established criteria for environmentally conscious design across its product range.

A critical finding is the push for companies to integrate recycled materials into their production processes. For instance, the report notes that Mitsubishi Electric’s recycling plant improved its plastics recycling rate from 6% to 80%, showcasing significant advancements in material efficiency.

Facilitating life extension and recycling of company products

To ensure that products remain useful beyond their initial lifecycle, companies are encouraged to implement programs for repair, refurbishment, and recycling. Fronius operates repair centres that allow customers to return faulty products for refurbishment, while Hilti maintains a global repair network for tools.

These initiatives not only extend product life but also promote sustainable consumption patterns. Companies like Elgi Equipments aim for zero waste to landfill by 2027, underlining the trend towards comprehensive waste management strategies.

Collaboration with other companies

The report emphasises the importance of collaboration among companies to achieve circular economy goals. Partnerships can lead to innovative solutions and improved resource management. For example, Salzglitter AG collaborates with Orsted to recycle steel from decommissioned wind turbines.

Furthermore, companies are encouraged to form coalitions to tackle common challenges in the circular economy. The report notes the establishment of joint initiatives like the Power for All Alliance, which fosters cooperation across companies to develop standardised products.

Standard setting and policy engagement

A robust circular economy requires systemic changes facilitated by policy and regulation. The report discusses how companies can engage in multistakeholder forums to advocate for better circularity practices and contribute to effective legislation.

Leading firms like Schneider Electric take active roles in developing standards for circular product design, aligning with EU regulations. The report recommends that companies not only comply with existing regulations but also take initiative in shaping future policies to support sustainability.

Public reporting

Public reporting is vital for accountability and transparency in circular economy practices. The report outlines that leading companies should articulate clear visions of circularity, set meaningful targets, and develop credible metrics to measure progress.

Examples include Bosch, which integrates circularity into its core sustainability strategy, and Hilti, which employs the CIRCelligence method to score its circularity efforts. Effective reporting allows stakeholders to assess the company’s commitment and progress towards sustainability.

Overview: Breakdown of companies surveyed

The report’s analysis covers around 50 companies, primarily based in the US, Europe, and Japan, with a few from India and South Korea. Of these, 29 reported significant circularity practices. This highlights a geographical concentration of circular economy initiatives, influenced by regional regulatory demands and sustainability cultures.