According to a new report, 92% of industrial businesses within the United States admit to feeling the effects of resource scarcity, especially in terms of raw materials, labor, and energy. In response, about 67% of businesses have increased their investment in circularity initiatives for the coming years.
The report by ABB Motion, Circularity: No Time to Waste, surveyed 3,304 leaders from a wide range of industries, including respondents from 12 countries. Resource scarcity and supply chain disruptions, according to those surveyed, were the top reasons for increased business costs, while about 29% of companies also reported slower production capacity.
About 400 U.S. companies were included in the survey. Some of these companies cited a number of changes made to adopt circular business practices as an option for lowering costs associated with such limited resources. The most popular circularity strategy was using recycled materials in products to some extent -- 81% reported engaging in this strategy.
Although less widespread practices, other companies reported partnering with waste management companies, incorporating energy-efficient technologies, and promoting circularity within their supply chains.
The World Resource Institute has found that the current global way of life depletes over 60% more resources than what can be naturally sourced. The report describes an urgent need to transition to a circular economy in order to reduce this impact towards meeting global climate goals.
“The pressing need to transition to a circular economy has never been clearer,” said Tarak Mehta, president of ABB Motion. “Our current way of life is depleting resources at an unsustainable rate, contributing to emissions and climate change. Embracing circularity is not only essential for safeguarding our environment but also for enhancing business resilience.”
Companies generally agree that circularity has led to measurable benefits for their businesses, although upfront costs are the biggest concern despite long-term rewards. Most companies support increased regulation and reporting requirements along with more government support for adoption of circular business practices.
While no single definition of circularity was accepted by a majority of surveyed businesses, perceptions of circularity are reportedly broadening.
Once a term that mostly encompassed recycling practices, circularity now includes sustainable sourcing, resource-efficient operations, responsible end-of-life practices for products, and more. The report emphasizes that companies will need to use a holistic approach to circularity, making it a company-wide priority.
Energy usage received considerable attention in the survey as over 40% of companies considered energy as their biggest source of waste. Many parties, including the International Energy Association, have found that businesses that adopt energy efficiency strategies and technologies may work to meet their decarbonization goals while saving on energy costs.
