Unlocking business opportunities in circular economy

Seven questions and answers about the circular economy

This article explores some of the pressing questions surrounding the circular economy, drawing on insights from renowned experts: Circular Economy Strategist Anne Raudaskoski, Sustainability Director and Author Pasi Nokelainen, and Ulla Luhtasela, our Sustainability Director, who shared their perspectives during our Circular Economy webinar.

1. How can circular economy business be economically viable?

Circular economy businesses achieve economic viability by optimising processes, minimising waste, and incorporating recycled materials, which can lead to significant cost savings. Efficient resource use also enhances financial performance while benefiting the environment. For instance, Lindström has successfully reduced costs and improved profitability by adopting circular economy principles.

The circular economy in Europe alone offers annual cost savings worth hundreds of billions of euros, providing a strong incentive for businesses. Globally, these savings multiply.

Anne Raudaskoski

2. How are the benefits of the circular economy measured for society and nature?

Several metrics assess the benefits of the circular economy. A key measure is the circularity rate, which indicates the proportion of materials recycled and reused instead of discarded as waste. Resource efficiency is another critical metric, measuring raw material consumption per person.

Circular economy is a holistic solution to many challenges of our time, enabling a better life within planetary limits.
Pasi Nokelainen

3. Which business opportunities in the circular economy should companies prioritise?

Companies can explore opportunities such as offering products as services and utilising recycled materials. By offering products as services, businesses retain ownership while providing usage to customers, encouraging them to ensure the product’s durability and longevity. Using recycled materials reduces reliance on natural resources and lowers environmental impact.

Some businesses may also benefit from adopting digital twins—virtual models of physical products that aid in maintenance and optimisation. These innovations open new possibilities for efficiency and cost-effectiveness.

To promote a circular economy beyond their own operations, companies can prioritise service-based solutions in their supplier network. These solutions encourage product owners to focus on durability and lengthening product lifespans.

Ulla Luhtasela

4. How can circular economy design help companies achieve sustainable growth?

Design plays a significant role in this – approximately 80% of a product’s environmental impact is determined at the design stage. Circular economy principles in design enable companies to achieve sustainable growth by creating products and services that are durable, repairable, and recyclable. This approach minimises environmental impact while enhancing economic viability.

For instance, modular product design allows for the replacement and repair of components, extending product lifespans and reducing the demand for new production. Moreover, such designs help companies meet future regulatory requirements and align with consumer expectations for sustainability.

Preserving value—whether functional, financial, psychological, or environmental—is vital to the circular economy.
Anne Raudaskoski

5. How can a circular economy provide meaningful work for people?

Circular economy business models, such as offering products as services, generate jobs in sectors like repair, maintenance, recycling, and reuse. These roles require diverse skills and are less susceptible to automation, providing meaningful opportunities for individuals with varied skills.

The circular economy is labour-intensive, with roles not easily replaced by automation.

Pasi Nokelainen

6. How do we increase motivation to choose circular economy products?

Motivation can be increased through various strategies. Financial incentives, like discounts or tax benefits, make circular economy products more appealing. Sweden, for example, has used reduced VAT on certain repair services to stimulate demand.

Additionally, raising awareness of the benefits of circular economy practices can encourage changes in customer behaviour. Effective marketing and communication, emphasising sustainability and environmental benefits, can help influence preferences.

Setting clear goals is important, but focusing solely on one, like cost-efficiency in procurement, can compromise other priorities, such as sustainability or quality.
Ulla Luhtasela

7. How can companies accelerate their transition to the circular economy?

Companies can accelerate their circular economy initiatives by setting ambitious goals, even if they seem challenging initially. Investing in research and development and identifying value in underutilised resources can drive progress.

Collaboration with other organisations is equally important. Lindström, for example, aims to achieve a 100% recycling rate by partnering with others to recycle products and incorporate recycled fibres into new offerings. By fostering innovation and building partnerships, companies can effectively lead the transition to a circular economy.

Reduce. Reuse. Recycle.

By repairing and reusing, we avoid millions of kilos of unnecessary textile production.

Learn more.