McKinsey & Company: What is circularity?

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The report by McKinsey & Company explores the concept of circularity, which aims to optimise resource use and minimise waste across production and consumption cycles, contrasting the traditional linear economic model. Circular economies focus on three principles: preserving natural capital, optimising resource yields, and eliminating negative externalities like pollution. Transitioning to a circular model presents significant economic opportunities, potentially unlocking over $1 trillion in revenue in Europe by 2050. Key sectors poised for growth include fashion, electronics, home and living, sports, and fast-moving consumer goods, driven by consumer demand, regulatory support, and technological advancements. Circular business models involve extending product life cycles through strategies like reuse, repair, refurbishment, and recycling. Companies are encouraged to adopt circularity to enhance sustainability and gain a competitive edge, with strategic moves including portfolio realignment, green business building, leveraging green premiums, and improving supply chain sustainability.