Revising the negative impact factors on companies discussed at the beginning of this article, circular business strategies provide an attractive opportunity for companies to ease or even circumvent potential pressures – and further increase their profit potential.
With respect to geopolitical frictions and the problems of the global economy in particular, we see that companies adopting circular pathways benefit from growing deglobalization and better supply chain resilience. By keeping materials in the loop and leveraging “local” suppliers, companies are less dependent on foreign sources, which may be subject to further, negative geopolitical tensions such as invasions, trade wars, pandemic policies or unexpected events such as the Fukushima nuclear crisis or the blockage of the Suez Canal. Organizations can decrease raw material usage, increase stability of their product offerings and meet customer demand for locally sourced, sustainable products. It’s a win-win situation: Companies mitigate volatility of material supplies, increase customer satisfaction and improve margins.
Building on this, incoming ESG regulation and disclosures play to the advantage of companies. By implementing circular business models, companies are already well placed to comply with laws such as the ongoing partial revision of the Swiss environmental protection act which reinforces the circular economy and disclosures such as the counterproposal to the Responsible Business Initiative. Seen from this perspective, sustainability reports, product labels and marketing requirements are not a necessary evil but a preferred tool to communicate organizational activities. Especially where competitors fail to adopt circular, more sustainable business strategies, an organization can secure a unique, leading position. Further, there is no need of coming up with ideas on how to position the company well in such disclosures, which is by the way called green washing, but companies just must report on what they are doing while also considering goals set by countries or federation of states.