Embracing the circular economy will drive customer loyalty and build a sustainable business. Avoid common challenges on your way to environmental responsibility.
As the world population continues to grow, defining environmentally responsible business models is no longer a branding luxury but a necessity.
Scarce resources, rising production costs and stricter regulations will have an increasing impact on every business. A 2021 report listed nine unsustainable business model for nine unsustainable business model archetypes, from the over-exploitation of resources to negative health outcomes.
Even if your enterprise ignores this, the linear economic model of “take — make — dispose” is slowly dying out, simply because it’s not sustainable. So, if your company is still clinging to old habits, you need to define new strategies that prioritize circular economy sustainability and circular economy practices to stay in business.
While you may not believe that sustainable business practices affect your industry yet, sooner or later your company will be affected by related penalties and fees that will negatively impact your revenue or result in legal action and a damaged reputation.
One way to deal with these challenges has been to embrace the circular economy. But what does that entail, and what steps does your business need to take to contribute to it?
To address today’s challenges while staying competitive, countless enterprises are turning to the circular economy. This economic model aims to eliminate waste and pollution by keeping resources in use for as long as possible.
The perception of your operations shifts from a production to a value chain, thus emphasizing the value that’s already contained in each asset. You therefore aim to extract the maximum benefit from every single resource, whether through continuous repairs, regenerating products, or recycling them at the end of their life cycle. This approach can help companies slash costs, improve their environmental footprint, and build a more resilient and sustainable future.
Because the transition to a circular economic model aids in reducing the reliance on virgin resources, it allows enterprises to reduce expenses while minimizing waste and redefining their brand.
The Circularity Gap Report 2025 reveals that the global circularity rate has declined to 6.9%, down from 7.2% in 2023. This indicates that only 6.9% of the materials used worldwide are recycled or reused, highlighting a significant opportunity for improvement in circular economy practices. This indicates a substantial opportunity for improvement and increased circularity across industries.
While the moral and environmental imperative to enter the circular economy is undeniable, there’s no doubt that the transformation comes with unique challenges for each industry.
One consideration that all enterprises face is ensuring customer engagement and loyalty throughout the transition. According to PwC’s 2024 Voice of the Consumer Survey, 80% of consumers express a willingness to pay more for sustainably produced or sourced goods. On average, consumers are prepared to spend 9.7% more for products that meet specific environmental criteria, such as being locally sourced, made from recycled or eco-friendly materials, or produced in a supply chain with a lower carbon footprint.
This makes it a necessity for companies to educate every customer about the environmental and social benefits of circular economy practices. Doing so will not only build trust in your brand and establish you as a credible source, but also ensure a stronger relationship with your customers.
To meet the challenges of the circular economy, companies must commit to several key changes across their business processes.
Depending on the industry, your organization’s objectives and timelines may vary, but there’s no question that they’ll require an organized and structured approach.
In light of our current challenges, many enterprises rely on the abundantly available data across their operations in the hope of filling otherwise vague objectives with tangible KPIs. And while access to an increasing number of data points seems like a guarantee to success, curating and interpreting them reliably turns out to be the real challenge.
One solution that can help to derive valuable insights from your data is a knowledge graph that connects data points from various sources into a single framework. Here’s how this graph can help companies contribute to a circular economy:
Analyzing supply chains: Mapping out their supply chains can help enterprises identify suppliers with high waste levels or inefficient transportation routes. This information can inform the communication strategy with suppliers to reduce a company’s environmental impact.
Understanding product cycles: By observing how customers interact with products from purchase to disposal, companies can consider reusing and repurposing in their product designs.
Identify valuable partners: By sharing data with business partners, enterprises can identify opportunities for future collaborations and benefit from synergies. One company’s waste may contribute to another’s production.
Recent research published in the Business Strategy and the Environment journal highlights that among SMEs, the most adopted digital technologies supporting circular economy models include cloud computing (47.9%) and high-speed infrastructure (33.7%). Meanwhile, technologies like AI (7.7%) and blockchain (3.3%) are still emerging — showing that while digitalization is advancing, there remains significant potential for deeper integration.
Several enterprises have successfully embraced circular economy principles to build a more sustainable business and increase customer loyalty.
Provenance, a U.K.-based software provider for sustainability communication, tracks the origin and environmental metrics of products in knowledge graphs. They use blockchain technology to track the movement of goods and curate this information in a structured format, enabling consumers to see a product’s entire life cycle and make informed decisions.
The circular economy represents a significant opportunity for companies to contribute to a more sustainable and successful future while increasing brand loyalty. As you evaluate your business, it’s important to ask tough questions and be honest about your environmental impact.
Doing so will allow you to make informed decisions moving forward and build a more successful enterprise that prioritizes sustainability.
If you’d like to learn how Brillio can help your organization enter the circular economy, let’s connect! We’d love to hear from you.
