Business leaders, consumers and governments alike have discovered that continued wealth generation requires a new industrial model that is less dependent on primary energy and materials inputs, and ultimately able to regenerate our natural capital. In its recent reports, the Ellen MacArthur Foundation has focused on the economic and business benefits of such a circular model of growth.
In this report, the World Economic Forum and the Foundation, with analytics provided by McKinsey & Company, acting as project adviser, joined forces to reconcile the concept of scaling a circular economy within the reality of a global economy and complex multi-tier supply chains. The key objective is to propose a very specific joint plan of action for industry leaders.
The challenge of closing materials loops and regenerating natural assets is an exponential function of product complexity and supply chain length. While more localized production is experiencing a robust renaissance in some economies, we cannot ignore nor fail to tap the power of global division of labour, specialization and economies of scale. This report sets out to emphasize that the circular economy must hold its promise not merely to the village economy, but also to a globalized economy of nine billion.It presents the concept of circularity as a tangible driver of industrial innovations and value creation for the 21st century global economy. In addition, it positions the concept for today’s global CEO as a practical business strategy to “hedge” against the complex and interconnected risks of resource competition, commodity price volatility, new materials technologies and changing consumer demands.