A new report looks into current status and development in circular business models and identifies the main barriers for scaling and transforming circular business models within the Nordic manufacturing industry.
The report also sets a range of recommendations for enabling organizations to support Nordic manufacturing companies in their circular transition.
Among the concrete suggestions for cross Nordic initiatives are:
- Documentation requirements to better trace recycled material
- Policies to extend ownership of products
- Standards to enable transparency across value chains
- Guidelines to reduce barriers for entering new partnerships
The report also suggests that research institutes collaborate with manufacturing companies to share knowledge, skills and trends and that finance institutes include circular economy indicators in their sustainable financing investment criteria.
“Transition to a circular economy is one of the critical solutions to address global climate change, with the potential to unlock untapped value potential of $140 bn in the Nordics. But the transition is too slow. Only 7.2% of our global economy is circular", says Anna Töndevold, Nordic Sustainability Strategy lead at Accenture.
"Nordic companies need to accelerate and scale the circular economy, but incentives, collaborations across ecosystems and sharing of material data flows across the value chain are necessary to transition”, she continues.
FACTS: STATUS IN NORDIC MANUFACTURING INDUSTRIES (between 2019 - 2022)
Use of circular input from renewable, recyclable or reused material: increase from 34% - 37%
Product take-back in return schemes: increase from 19% - 34%
Companies recycling over 80% of their waste: increase from 33% to 45%
Four main barriers for circular business transformation
The report has identified four main barriers faced by Nordic manufacturing companies in scaling and transforming circular business models:
People and Culture: are barriers linked to internal resistance to change ways of working, internal prioritization, and customer adoption.
Collaboration: are barriers related to cross functional collaborations and external collaborations.
Financing: are barriers associated with a lack of willingness to prioritize investments to scale circular business models.
Regulations: are barriers linked to unclear legislation or lack of incentivizing legislation.
“The identified barriers are showing that companies face several challenges during their circular transformation journey and that there is a resistance at the companies to make a shift to a circular economy. To support companies, we have together with Nordic Innovation created the Nordic Circular Economy Playbook 2.0 -Transform & Scale which focuses on how companies can prioritize biggest impact areas, how to overcome barriers and accelerate results”, says Sofia Forsberg, Sustainability Consultant at Accenture.
Nordic workshops for the manufacturing industry
Background for the report is the Circular Business Model workshops organized by Nordic Innovation in collaboration with Accenture and Sitra. During three workshop rounds taking place from 2019 - 2022 has more than 140 companies from the sectors: transport, energy, maritime, machinery & equipment and construction learned about circular business models.
The purpose of the workshops has been to develop the awareness, maturity and skill level on circular business models of companies from across the manufacturing value chain.