Circularity Pays Off, When Done Right

A growing number of companies are exploring circular business models. But few succeed in turning those ambitions into scalable, profitable operations. According to a new report from Boston Consulting Group (BCG), the key to unlocking the full potential of circularity lies in strategic integration, not isolated initiatives.

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“There’s enormous potential in circular business models. But to succeed, companies must move beyond isolated initiatives and integrate circularity throughout the entire business.”
— Nanna Gelebo, Managing Director and Partner at BCG

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Circularity as a Growth Engine

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The report, Scaling Circularity into Profitable Business, makes a compelling business case:

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• Companies that successfully scale circular models can achieve up to 20% revenue growth.
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• Material costs can be reduced by 15%.
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• Climate impact is significantly lowered across the value chain.
  
  

However, the path to profit is not without barriers. BCG highlights three major challenges:

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1. Consumer behaviour – the gap between sustainable intentions and actual purchasing behaviour
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2. Operational complexity – circular logistics, repair, and reuse require significant investments
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3. Lack of integration – many companies run pilot projects in silos, which limits impact
   
   

Despite these challenges, the report provides clear evidence that with the right product design, pricing models, and operational focus, circularity can drive both growth and customer satisfaction.

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The Three Key Challenges in Scaling Circularity

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However, the path to profit is not without barriers. BCG highlights three major challenges:

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• Consumer behaviour: While 70–80% of global consumers express concern about sustainability, intent doesn’t always translate into action. In Europe, only 19% are willing to pay more for sustainable options, compared to 2–7% globally.
  
  
• Operational complexity: Managing reverse logistics, repairs, diagnostics, refurbishment, and resale requires new systems and capabilities. Even small inefficiencies, such as long lead times for spare parts, can disrupt the process.
  
  
• Lack of integration: Many organisations run isolated circular initiatives that struggle to deliver value or scale due to misalignment with existing linear business structures.
  
  

Despite these hurdles, the report provides clear evidence that with the right product design, pricing models, and operational focus, circularity can drive both growth and customer satisfaction.

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Circularity as a Competitive Advantage

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As the economic climate shifts and companies seek more cost-effective, future-proof solutions, circular models offer a clear advantage. They’re not just good for the planet—they’re good for the bottom line.

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“The circular economy is no longer a future scenario. It’s already here—and it can be a competitive advantage for those who dare to commit at scale and long-term,”
— Nanna Gelebo, BCG

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Making Circularity Work

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According to BCG, the companies that succeed in circularity adopt a clear, organisation-wide strategy from the start. Key enablers include:

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• Defining an ambition that balances growth, sustainability, and profitability
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• Aligning the organisation with clear circular goals
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• Investing in enablers like pricing tools, circular product design, reverse logistics, and digital solutions

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Companies can unlock circularity’s full business potential by getting these fundamentals right.

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Read BCG’s full report: The Business Gains of Going Circular

This is the second article in BCG’s three-part series on circularity. The first article explores the growing opportunity in circular business models. The final instalment will focus on integrating circularity into core strategy and operations.

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*All data, insights, and images referenced are from Boston Consulting Group’s report “Scaling Circularity into Profitable Business.” Full credit to BCG and the report’s author, Nanna Gelebo, Managing Director and Partner at BCG, for the research and findings shared.

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