Why the Next Decade Belongs to Businesses That Pivot to Circularity

In the coming decade, the question for business leaders will no longer be whether to adopt sustainable practices, but how quickly they can pivot to circularity to stay competitive. A world facing resource constraints, climate risks and shifting consumer preferences is demanding that enterprises break free from the take-make-waste linear economy and embrace a regenerative, circular model. The shift is no longer about corporate social responsibility—it is about business survival.

The linear model has a two-sided impact: rising costs of raw materials due to increased demand and higher costs of waste disposal. In contrast, circular models transform waste into raw material, creating value at every stage of the product lifecycle.

The Circular Imperative

The global economy today is only 7.2% circular, according to the 2023 Circularity Gap Report. This means that over 92% of extracted resources go to waste after a single use. Meanwhile, material extraction has tripled since 1970 and is projected to double again by 2060 if businesses continue as usual.

For companies, this translates into three converging risks:

1.    Resource Scarcity: Rising costs of rare earths, copper, lithium and other critical raw materials threaten supply-chain stability. Alarmingly, scientists have already projected “expiry dates” for several natural resources.

2.    Regulatory Pressure: Over 140 countries have announced net-zero targets, while extended producer responsibility (EPR) laws are tightening globally.

3.    Consumer Activism: Nearly 80% of Gen Z consumers say sustainability influences their purchasing decisions (First Insight, 2022).

The message is clear: the linear model is a liability. Circularity—designing out waste, keeping products and materials in use, and regenerating ecosystems—is the blueprint for resilience.

Growth, Profitability and Risk Reduction

The misconception that circularity is expensive has been dispelled by data. Transitioning to a circular economy could unlock $4.5trn in economic benefits by 2030 (Accenture). Companies embedding circular strategies are seeing both cost savings and revenue expansion.

• Cost Savings: Philips’ “lighting-as-a-service” model reduced material use while boosting customer retention. Its circular revenues surpassed €2bn in 2021. This proves companies can build products with longer lifespans and still grow revenues—by monetising services, reducing costs and minimising emissions and waste.

• New Revenue Streams: Fashion resale platforms like ThredUp and Poshmark have tapped into the $177bn global second-hand apparel market, expected to double by 2027.

• Investor Appeal: ESG-linked funds attracted $120bn in net flows in 2022 (Morningstar), demonstrating capital migration toward companies with measurable sustainability impact.

• The Fashion Business Case: The fashion industry is among the most polluting, generating over 92mn tonnes of waste annually. If brands integrate textile waste back into their supply chains, they could achieve 20–30% raw material cost savings, dramatically reduce waste disposal costs and mitigate the harmful impacts of microplastics. Beyond environmental benefits, circularity in fashion directly addresses cost, compliance and consumer trust—making it a compelling business case.

Circularity is not just an ethical compass—it is a growth engine.

Futureproofing with Circularity

To embed circularity into the DNA of business, leaders need a structured playbook:

1.    Design for Circularity
Products must be reimagined for longevity, modularity and recyclability—for example, mono-material textiles or cellulose-based fabrics that are easier to recycle.

2.    Leverage Digital Tools
AI, the Internet of Things and blockchain can track resource flows and optimize utilisation. The EU’s Digital Product Passport mandate will soon require companies to disclose material composition and repairability—early movers will gain compliance and transparency advantages.

3.    Build Circular Supply Chains
Partnerships with suppliers for take-back, remanufacturing and closed-loop logistics are critical. Consumer take-back programmes not only ensure material recovery but also enhance awareness and brand loyalty.

4.    Shift from Ownership to Access
Leasing, renting, sharing and product-as-a-service will increasingly replace ownership. The future belongs to rental models, refurbished products and thrift markets.

5.    Embed Circular Key Performance Indicators (KPIs)
Traditional financial reporting must evolve. Metrics like resource productivity, material recovery rates and carbon savings should be integrated into performance dashboards, making circularity a core business KPI rather than a side initiative.

India’s Opportunity in Circularity

Every successful economy has a differentiator: China commands efficiency and rare earths, Japan thrives on precision technology, the US leads on innovation. For India, circularity can be the defining advantage.

By 2030, India’s material consumption is expected to double, while waste generation will rise by 165%. The urgency is clear, but so is the opportunity:

• $45bn in annual savings from resource efficiency and circular practices (NITI Aayog).

• Potential creation of 1.4mn jobs in recycling, repair and remanufacturing.

• The world’s largest textile recycling capacity, already at 5,000 tonnes per day.

• A young workforce, vast domestic market, strategic geography and abundant natural resources.

India has the production muscle, workforce depth and market scale to lead globally in circular industries. With the right policy push and collaborative action between government, business and consumers, India can establish itself as the global hub for circular innovation.

From Risk to Resilience

Futureproofing a business is not about hedging against disruption—it is about becoming the disruptor. In a circular economy, waste is eliminated, value is extended and growth decouples from resource extraction.

Business leaders must start by asking:

• What is the material footprint of my products?

• How can I keep resources circulating longer?

• What service-based or circular models can redefine my industry?

The businesses that answer these questions today will own the markets of tomorrow. Circularity is no longer just a sustainability strategy—it is the business case of the future.

The writer is founder-director, Aadi Sustainability Solutions and Global Alliance for Textiles Sustainability Council.