WEF – Climate Governance and the Circular Economy, 2023

The report highlights the importance of transitioning to circular business models in order to achieve climate commitments and reach net-zero emissions. It states that almost half of the greenhouse gas emissions reductions needed to meet the United Nations Climate Goal can be achieved by changing how goods are produced and consumed through circularity. The existing linear economic model, known as "take-make-waste," is extractive and resource-intensive, leading to environmental consequences such as land destruction, biodiversity loss, and greenhouse gas emissions. In contrast, a circular economy keeps materials in productive use and cycles them back into the system, thereby protecting and restoring the environment. Embracing circularity not only brings environmental benefits but also delivers financial value, operational efficiency, and resiliency. The report estimates that the circular economy could generate $4.5 trillion in value by 2030. Consumers also support the business case for circularity, with 40% considering values-driven qualities in their decision-making process. Circular business models strengthen supply chains, reduce waste streams, and minimize resource scarcity risks. Implementing circular models requires collaboration, partnerships, and sharing of infrastructure for reverse logistics and recycling. To successfully transition to circularity, companies need to embed it at all levels and functions, with clear governance, leadership, and accountability. Incentives, key performance indicators, and training should be provided to empower staff with the necessary skills and knowledge. Standardization of frameworks, emerging regulations, and stakeholder demand for transparency also emphasize the need for accurate ESG reporting, including the link between circularity and emissions. Board directors play a crucial role in initiating and inspiring circular transformation, leading to financial value realization, supply chain decarbonization, and operational resiliency.