Circular Economy and Sustainability: Driving circularity in business

Why now is the time to Think Circular

Our planet is under increasing pressure from a system that was designed for another era. Each year, the world extracts more than 100 billion tonnes of raw materials, yet only 6.9% of those materials are recycled and put back into use. That means more than 90% of resources are wasted, lost, or locked away in long-term infrastructure, such as buildings and machinery.

This gap between what we extract and what we reuse is known as the circularity gap, and it’s widening. But it doesn’t have to. The shift toward a circular economy is not only an environmental imperative, it’s also a strategic business opportunity. It represents a move away from the outdated “take-make-use-dispose” model toward one that moves towards “design-make-use-collect-transform-reuse”.

As the world continues to embrace sustainability, circular thinking is becoming essential for businesses that want to lead with purpose, remain resilient, and meet the rising demand for responsible practices.

So, what is the circular economy?

So, what is the circular economy? A circular economy is a systemic approach to economic development designed to benefit businesses, society, and the environment. Unlike the traditional linear model that ends with waste, a circular economy is regenerative by design.

At its core, it revolves around three key principles:

• Eliminate waste and pollution
• Circulate products and materials
• Regenerate natural systems

By doing so, it ensures that we extract the maximum value from resources while in use, then recover and regenerate products and materials at the end of each service life.

Why the circular economy and sustainability go hand in hand

Sustainability is often associated with reducing harm, lowering emissions, cutting waste, and minimising resource extraction. Circular economy thinking goes one step further. It redesigns systems to prevent waste entirely and enables positive environmental impact through innovation.

When done right, the circular economy can:

• Extend product lifespans
• Reduce dependence on finite resources
• Cut carbon emissions
• Boost biodiversity by relieving pressure on ecosystems
• Promote social equity by generating new types of employment and local economies

Simply put, sustainability is the “why,” and circular economy is the “how.”

Case studies and projects: Circularity in Action

Real-world examples from across sectors illustrate how concepts in the circular economy and sustainability are being put into practice:

• Repsol Reciclex and Plastics2Olefins: Repsol’s Reciclex line produces circular polymers that incorporate recycled plastics and bio-based waste, maintaining quality close to that of virgin materials. REPSOL The Plastics2Olefins project develops chemical recycling processes to convert plastic waste into circular olefins, aiming to reduce carbon footprint. Plastics2Olefins

• Chemical recycling of polyurethane foam: In Spain, a plant at Puertollano is converting end-of-life polyurethane foam (e.g. from mattresses) into polyols for new foam production, helping close the loop for this material stream. REPSOL+1

• 100% Recycled Asphalt Pavement (RAP): Research shows that asphalt mixes made entirely from reclaimed asphalt pavement can perform at parity with conventional asphalt, under proper mix design. ResearchGate There are also transportation infrastructure projects adopting high proportions of RAP to reduce raw material use, energy consumption, and greenhouse gas emissions.

These case studies serve as part of a growing catalogue of good practices. They demonstrate that circular economy models — from material recycling to full-loop reuse — can work across different industries and scales.

Technological innovation in the Circular Economy

No discussion of circular economy and sustainability would be complete without recognising the role of technology and innovation. Digital tools and advanced science are accelerating the transition to circular business models and creating scalable circular solutions.

Some of the most transformative technologies include:

• 3D printing – enabling on-demand, waste-free production and easier repair of broken parts.

• Internet of Things (IoT) – tracking products throughout their lifecycle for smarter reuse, repair, and recycling.

• Artificial intelligence (AI) – predicting demand, optimising supply chains, and improving material recovery rates.

• Big data analytics – providing the insights needed to design more efficient circular business models.

• Digital twins – creating virtual replicas of systems to test circular solutions before real-world implementation.

• Cloud computing and online platforms – connecting global supply chains and making resource-sharing easier.

Together, these tools are creating the infrastructure needed to make circularity practical, measurable, and scalable.

Resource optimisation: doing more with less

A central pillar of the circular economy and sustainability is resource optimisation — ensuring every product, material, and process delivers maximum value before being retired. In practice, this means reducing waste at the source, extending product lifespans, and creating closed loops for materials that were once considered disposable.

Key strategies include:

• 100% recyclable asphalts: The construction sector is advancing designs that use reclaimed asphalt pavement, reducing virgin aggregate demand and cutting emissions (ResearchGate).

• Ecodesign: Around 80% of a product’s environmental impact is determined at the design stage. Designing for repair, modularity, and recyclability ensures resources circulate for longer.

• Reduce, Reuse, and Recycle: This remains foundational, from reusing asset equipment in industry to recycling packaging at scale.

• Bioremediation and compost techniques: Natural processes are increasingly used for waste treatment, from microbes cleaning contaminated soils to composting organic waste.

• Renewable energy and alternative raw materials: Substituting fossil-based inputs with renewables or bio-based materials reduces dependency on finite resources.

• New consumption patterns: Leasing, sharing, and product-as-a-service models shift ownership and encourage long-term use.

• Process efficiency and innovation: Waste heat recovery, water reuse, and advanced manufacturing methods lower resource demand.

• Waste treatment innovation: Improved separation and recovery technologies are increasing recycling rates and reducing landfill dependency.

Together, these practices highlight how resource optimization goes beyond recycling. It is about designing systems where every input is valued, every output is accounted for, and waste is continuously turned back into opportunity.

The Circularity Gap: A global challenge

The circularity gap is a measure of how far off we are from achieving a closed-loop system. Currently, only a fraction of the resources we use are reused. According to data from the Circularity Gap Report, global circularity has dropped from 9.1% in 2018 to 6.9% in 2024.

This drop is alarming and reflects rising material consumption, increasing complexity in product design, and systemic barriers to reuse and recycling. The vast majority of resources are still disposed of in landfills, incinerated, or locked away in infrastructure that won’t be accessible for decades.

The implication is clear: if we are to live within planetary boundaries, closing the circularity gap must become a central goal for all economies.

The business case for circularity

For many organisations, the circular economy might sound like a lofty ideal. But in practice, it offers real, measurable advantages:

• Cost efficiency: Reusing and recycling materials lowers input costs, especially for manufacturing businesses.
• Supply chain resilience: Circularity avoids reliance on unpredictable raw material markets.
• Innovation and competitive edge: Designing for circularity often leads to product innovation, improving functionality, durability, and consumer loyalty.
• Regulatory compliance: As governments introduce tighter rules around waste, emissions, and product life cycles, early adoption of circular principles ensures future readiness.
• Brand reputation: Sustainability-focused customers are increasingly rewarding companies that align with circular values. This translates to stronger customer loyalty and brand trust.

How can my business start thinking circular?

• Start with an audit – Identify where waste is generated and which materials cost the most.

• Focus on extending product lifespan – Explore repair, maintenance, and upgrade services.

• Opt for circular materials – Choose recyclable, biodegradable, or renewable inputs.

• Train your team – Make sustainability a shared responsibility across departments.

• Measure your impact – Use KPIs to track resource efficiency, waste diversion, and emissions.

The bigger picture: A shared responsibility

The circular economy isn’t just a business trend; it’s a societal shift. As the global population grows and resource constraints tighten, we need to find new ways of producing, consuming, and thinking.

Whether you’re a retailer looking to reduce packaging, a manufacturer aiming to minimise raw material costs, or a tech firm exploring repair and reuse programs, circularity presents a path toward meaningful impact.

It’s a system that rewards innovation, collaboration, and responsibility. And importantly, it doesn’t require perfection to begin, just commitment.

Choosing a more sustainable future

The climate crisis, rising material costs, and increased regulatory pressure all point in one direction: business as usual is no longer sustainable. But change doesn’t have to be overwhelming.

By embedding circular principles into their operations, organisations can reduce risk, unlock new value, and contribute to a more resilient world.

The circular economy offers a roadmap to a better future, one where economic growth and environmental value go hand in hand.

Start thinking circular today

At Reconomy, we believe that the circular economy should be accessible to all. Through our three service loops: Recycle, Re-use, and Comply, we support over 23,000 businesses across 150+ countries to embed circularity into their day-to-day operations.

Our #CloseTheGap campaign is a tangible way to help organisations understand their circularity impact and take tangible steps toward a waste-free future. Whether you’re looking to improve your returns logistics, streamline waste management, or stay compliant with evolving sustainability regulations, we’re here to help.

Want to learn how your business can thrive through circularity?

Visit #CloseTheGap and take the first step toward a more sustainable tomorrow.