Ninety-five percent of executives in industrial sectors consider that circularity will be “important” for their organizations over the next three years; of these, 71% think it will be “very important.” These figures come from a survey conducted by the World Economic Forum (WEF) of nearly 500 executives from companies across 10 industrial sectors. The survey results informed the content of Circular Transformation of Industries: The Art of Scaling Circular Supply Chains, published this November by the WEF in collaboration with Bain & Company and the University of Cambridge.

The report notes that the relevance of circular business models has never been greater: it has become a strategic business issue in the context of shifting consumer demands, resource scarcity, and volatile raw material costs. In this context, the conversation has moved from “why” circularity matters to “how” it can be implemented at scale.

For now, the adoption of circular business models is, according to the authors, “uneven,” and only 20% of companies have fully functional circular supply chains. To address this, the report provides a roadmap to help companies move from ambition to action and prioritize, design, and scale circular supply chains—one of the main challenges of industrial transformation.

According to the report, the main obstacles companies face are:

• – Operations: low product returns, varying quality, reverse logistics complexities, and seasonal demand fluctuations.
• – Customers: unclear demand for refurbished products, quality concerns, and entrenched purchasing habits.
• – Infrastructure and data: limited collection systems, disconnected IT systems, and poor tracking.
• – Regulations: inconsistent rules on waste transportation, warranty requirements, and restrictive international frameworks.
• – Organization: skills shortages, resistance to change, fear of competing with own products, and difficulty splitting costs and profits with partners.

The authors emphasize that “prioritizing well is critical to success” and that no company can tackle circularity alone: an ecosystem is needed to ensure materials, know-how, technology, and markets; moreover, each participant in this ecosystem must be able to capture part of the value created by circularity.

Three key principles for building circular supply chains:

• – Prioritize with discipline: focus initial efforts on the products, customer segments, geographies, and circular value propositions with the highest potential.
• – Design to scale: strengthen operational capabilities, decide what to internalize and what to outsource, and configure supply chains that combine existing and new assets.
• – Enable and influence: leverage regulations, finance, technology, and culture, and involve stakeholders from the start to shape markets.

According to the report, circular supply chains will redefine value creation over the next decade and beyond. Companies that act today with clear decisions, ambitious pilot projects, and scalable infrastructure will lead industrial transformation.

“In the same way that digital transformations redefined business models over the past two decades, circular transformations will determine competitiveness in the decades to come,” concludes the WEF.