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Ivonne Bojoh, CEO of Circle Economy, shares her insights on circular economy’s benefits for businesses
The world faces a triple crisis—climate change, biodiversity loss, and pollution. The circular economy is one of the most effective solutions to address these issues. Our
Circularity Gap Report 2021 shows that 70% of global emissions are tied to material use and handling. By applying circular economy strategies, we can cut excessive material consumption and thereby reduce carbon emissions. Moreover, the Circularity Gap Report 2023 highlighted that embracing circularity can help reverse the overshoot of five planetary boundaries, including those related to water and soil health. Time and again, our analysis demonstrates that a circular economy offers a holistic, effective approach to tackling multiple global crises simultaneously.
Beyond its environmental benefits, the circular economy is simply a smarter, cleaner, and more efficient system. At the dawn of the 20th century, oil overtook coal because it was a more efficient and less polluting energy source. Today, we have found an even better alternative—renewable energy—which is poised to render oil obsolete. However, unlike the past, we no longer have the luxury of time to let this transition unfold gradually. To combat the pressing crises we face, we must accelerate both the energy and circular transitions.
The Netherlands has been a pioneer in embracing circularity. We worked with many local governments leading the transformation, from Amsterdam to Groningen, and are currently working on the Circularity Gap Report Friesland, together with Circulair Friesland. We take pride in guiding the City of Amsterdam on its circular economy journey, which earned it a spot as a finalist for the prestigious Earthshot Prize in 2022. Beyond visionary policymakers, entrepreneurs across these cities and regions are also driving the shift toward the circular economy.
The Netherlands boasts a high circularity rate and a robust policy framework that supports circular innovation. The Circularity Gap Report Netherlands measured the country’s circularity at 24% in 2020. Initiatives like the Dutch National Circular Economy Programme and strong public-private partnerships have provided a strong basis for circular innovation.
However, like many affluent nations, the Netherlands grapples with unsustainable consumption habits—buying and wasting more than necessary. Our recent reports have shed light on these challenges. For example, used clothing exports from the Netherlands totalled more than €193 million in 2022. This is the highest export value in the five years, indicating a strong overconsumption trend. An average Dutch consumer now buys 46 new clothing items and disposes of 40 (!) each year. These striking numbers underscore the need for both the country and its residents to intensify their efforts toward sustainable and circular consumption.
There's a common misconception that sustainability comes at a cost. In reality, circular strategies drive efficiency, reduce costs, and open new revenue streams. For instance, models like product-as-a-service (PaaS) and resale schemes allow businesses to tap into new markets and foster stronger connections with clients.
At Circle Economy, we analyse material flows to identify business opportunities, expose inefficiencies, and provide actionable insights, forming a solid basis for informed decision-making. Beyond optimising operations, we emphasise the importance of resilience and future-proofing. With evolving legislation and true pricing on the horizon, along with the undeniable impacts of our current linear economy, resource-intensive businesses have both an opportunity and an imperative to change.
Swapfiets is a prime example of a successful international business built on the PaaS model. Starting as a Dutch enterprise, Swapfiets now offers its circular services in eight countries. They have redefined mobility by shifting ownership to service and maintenance models, thus extending the lifecycle of their products and ensuring that resources are used optimally.
Additionally, Decathlon, traditionally a linear retail giant, has recently adopted circular business models like resale, tapping into new markets and catering to customers interested in trying new sports without the commitment of purchasing new and expensive equipment.
IKEA has also taken steps toward circularity with its buy-back program, offering second-hand furniture alongside new products. These initiatives illustrate how businesses can successfully integrate circular models, proving that sustainability and profitability can go hand in hand.
It's essential to reshape the narrative and view the circular economy as a powerful risk mitigation tool. Challenges like raw material shortages, supply disruptions, and geopolitical risks can be effectively mitigated through circular strategies—by shortening supply chains, doing more with less and sourcing (recycled) materials locally.
So, the circular economy is not merely about ticking compliance boxes; it's about ensuring a company's long-term viability and resilience. When companies start to see investment in sustainability as a driver of competitive advantage, the shift from mere compliance to proactiveness becomes inevitable.
