Enterprises should adopt circular economy models to meet consumer demands and mitigate risks in supply chain systems, said a study released by The Capgemini Research Institute on Monday.
As consumers become discerning and more demanding of businesses to be responsible, they’re pivoting towards companies that engage in circular practices, as per the study titled Circular economy for a sustainable future: How organisations can empower consumers and transition to a circular economy.
More than seven in ten consumers surveyed said they wanted to adopt circular practices, such as reducing overall consumption (54%), purchasing more durable products (72%), and maintaining and repairing products to increase product life (70%).
In contrast to the ‘take-make-waste’ model, a circular economy was regenerative and aimed to gradually decouple growth from the consumption of finite resources. For consumers this meant buying durable products that are recyclable or made with recycled materials; keeping them in use for a long time through effective maintenance and repair, or ensuring responsible end-of-life actions so that little to no waste would be generated, noted the study.
For enterprises, this included developing products and business models that would eliminate waste by design, reducing the use of raw materials, and planning for return/recovery of products and packaging, it added.
As per the study, consumer desire to adopt mindful consumption practices is growing, however, some 50% of consumers believe that organisations are not doing enough to recycle, reuse, and reduce waste across sectors.
Earlier reports from Capgemini showed that organisations were failing to take bold action on their circular economy practices and consequently, consumers were increasingly shifting their spending towards companies that practice circularity. This was especially true in areas where consumer awareness is highest, such as food and plastic waste. For instance, 44% of consumers have increased their spending in the last 12 months on food and beverage companies that focus on recycling, reuse, and reducing waste, and 40% have done so for personal and household-care products, said Capgemini.
Roshan Gya, Managing Director, Intelligent Industry at Capgemini Invent said, “The circular economy is the key to sustainable growth. As of now, consumers already make greener decisions, but they can choose only from what is offered to them: industrial organizations need to bake-in a green life cycle.’’
The Capgemini Research Institute surveyed close to 8,000 consumers globally to understand their interest in and acceptance of circular practices, and their expectations from organisations from the consumer products and retail (including food, personal- and household-care products, fashion and clothing, furniture, consumer electronics, and white goods), and automotive sectors.