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These 10 companies excel at marrying net-zero and circular economy goals

Tech conglomerate Cisco, equipment maker, John Deere and food and beverage company PepsiCo stand out. Read More

Circular economy concept. Source: Shutterstock/Blue Island

More than half the world’s publicly traded companies have set a net-zero goal for reducing greenhouse gas emissions. Far fewer have adopted operational practices from business models centered on reusing resources and materials, and reducing waste — the concept of “circularity.”

That disconnect is impeding progress toward net zero, according to new research from Indeed Innovation, shared exclusively with Trellis.

Just 35 percent of the biggest U.S. companies by revenue stand out for integrating comprehensive strategies for circular processes and product design with credible emissions reduction strategies, the design and consulting firm said in its USA Circularity Index

The report analyzes 60 companies in the 2024 Fortune 100, chosen because of their public commitments for emissions reductions and circular economy practices such as product take back, remanufacturing, recycling, recommerce/resale and reuse. 

Transformative strategies

Of that bunch, just 10 companies — led by networking and videoconferencing equipment maker Cisco Systems — consider circularity throughout the entire life cycle of a product or service, said Sarah Crooks, managing director, North America, of Indeed Innovation and a report author. Indeed calls these “Circular Transformers” that prioritize the following: 

  • Closed loop ecosystems for controlling the life cycle of products and finding value at every state.
  • Sales models that rethink product ownership, such as rental, refurbishment services and remanufacturing.
  • The introduction of take-back programs that help manage product life-cycle stages.
  • Product redesigns that embrace materials or components simpler to replace or renew.
  • Strategies that help with efficiency, such as energy, water or packaging reuse.

“This requires innovation on a business model level,” Crooks said. “You can’t optimize for sustainability and expect circularity as a result.”

Source: Indeed Innovation

Cisco stands out for comprehensive vision

Here are the 10 companies described as “Circular Transformers,” along with strategy highlights:

These companies are also making a “significant contributions” toward emissions reductions aligned with the Paris Agreement, Indeed Innovation’s analysis suggests.

Source: Indeed Innovation

Circular economy practices lag

The other 50 companies named in Indeed’s report are characterized as:

  • Circular Followers that are on the right track with circularity but lagging on climate progress.
  • Linear Optimizers who are making strides on climate goals but haven’t hid their stride with circularity.
  • Linear Traditionalists, lagging in both areas.

Just 7.2 percent of global economic practices are considered “circular,” off from 8.6 percent in 2020, according to the separate estimates by analysts at Deloitte and Circle Economy. Most of today’s economic activity is “linear,” meaning resources are extracted, processed, used and then disposed of as waste.

The potential for cutting emissions by using circular economy principles to extract fewer virgin and raw materials is particularly tangible in the textiles, packaging and automotive sectors, according to the Deloitte/Circle Economy report. Automakers, for example, could reduce materials emissions 57-70 percent by remanufacturing parts and recycling components such as batteries, the research suggests.

[Discover innovative solutions to advance your organization’s decarbonization goals at GreenBiz 25, February 10-12, Phoenix.]

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