Four shifts in financial practices to boost the circular economy

The concept of a circular economy appears to be reaching a tipping point, but progress is slow: current management practices are not in sync with circularity, starting from financial and accounting tools and approaches.

Key to understanding why organizations are still struggling to launch and scale circularity is the concept of value and how the current dominant way of thinking about value is linear.

If the circular economy is to move from enthusiasm to achievement, we need to shift from a theoretical debate about the strategic benefits to concrete business innovations powered by new financial models and metrics that enable people to write successful business cases – to understand and price risks, and to financially account for the transition to a nonlinear model.

Our research and consulting experiences with pioneering companies demonstrate that this change is not only necessary, but possible.