What went wrong? Is there no money to be made in the circular economy? Much suggests that this is (or at least should be) not the case. Dr Piotr C. Sosnowski from the Department of Logistics, Faculty of Management, University of Lodz, comments on the topic.
Kenneth Boulding drew public attention to the limited resources of the Earth and the need for efficient management almost 60 years ago. Shortly thereafter, Barry Commoner was the first to present the scientific basis for closing the loop on materials and energy. Since then, a multitude of ideas, possibilities and press and academic articles have been developed in the field of the circular economy (CE). Many companies have attempted to implement the CE in practice, with varying degrees of success. The European Union has made the transition to a CE one of the Community's strategic pillars. What has happened so far? Still not much.
The report "From Talk to Action: Paving the Way for a Circular Economy in the Consumer Goods and Retail Industry" by KPMG indicates that there are sectors of the economy where circularity is crucial – such as consumer electronics, luxury goods and fashion. The benefits of implementing a circular economy in a company include:
- savings in raw materials and energy;
- reduced waste management costs;
- improved corporate image;
- benefits from new business models based on providing services instead of selling tangible products;
- increased resilience to resource crises.
According to KPMG, the use of circular economy models has allowed companies to reduce operating costs by 20% and increase customer loyalty in the retail and FMCG sectors.
There are global companies that claim to have successfully implemented circular business models in their operations. Apparel manufacturer Patagonia has implemented programmes to repair and reuse its products. Ford recovers over 70% of its production waste by reusing scrap metal and used plastics. The recycling system used by Dell aims to enable the use of 50% recycled materials in its production by 2050. FMCG manufacturers such as Colgate-Palmolive, Coca-Cola, Procter & Gamble and Unilever are successfully increasing the percentage of recycled plastics used in packaging. This indicates that there are companies whose management is effectively implementing the circular economy on a large scale.
Unfortunately, challenges that impact the pace and effectiveness of the transition to a circular economy are emerging. These include the COVID-19 pandemic and military conflicts impacting economic realities, including the war in Ukraine. It's important to note that both the COVID-19 pandemic and the war beyond our eastern border have had both negative and positive impacts on the level of circularity in Poland and globally – assuming, of course, that one can even consider the benefits of such tragic events.
On the one hand, the COVID-19 pandemic has caused a sharp increase in demand for personal protective equipment, which is largely disposable (e.g., protective masks and latex gloves) and whose recycling is difficult, if not impossible. Furthermore, lockdowns around the world have led to a significant increase in e-commerce sales, which in turn has led to an increase in the use of disposable packaging for courier shipments.
On the other hand, difficulties related to the availability of many goods in international markets and the disruption of global supply chains during the pandemic have led to an increased importance of short supply chains, local sourcing and cooperation with local (rather than foreign) business partners (onshoring).
No sooner had the world overcome the greatest pandemic threat in a century than Russia launched a full-scale invasion of our eastern neighbour. This led to disruptions in global supply chains, instability in the energy market and a setback to the EU's green energy transition.
However, the volatility of the energy market has increased the profitability of investing in renewable energy sources, independent of fossil fuels. Furthermore, initiatives have been launched to rebuild Ukraine by reducing various types of negative environmental impacts, including promoting a circular economy and implementing circular business models (EU4 Green Recovery East, EU4GRE). Support for Ukraine under this initiative amounts to €21.3 million for the period 2025-2028.
It remains questionable what effects other ongoing armed conflicts (the war between Israel and Iran and the conflict between India and Pakistan) and the controversial international policies of US President Donald Trump will have on the circular economy.
Source:
1. BloombergNEF. (2023, January 18). The Leaders and Laggards in the Quest to Reach a Circular Economy | BloombergNEF. https://about.bnef.com/insights/finance/the-leaders-and-laggards-in-the-quest-to-reach-a-circular-economy/
2. Circle Economy Foundation. (2018). The Circularity Gap Report 2018.
3. Circle Economy Foundation. (2025). The Circularity Gap Report 2025.
4. EU NEIGHBOURS east. (n.d.). EU4Green Recovery East (EU4GRE). Retrieved June 27, 2025, from https://euneighbourseast.eu/projects/eu-project-page/?id=2684
5. Kessaria, S. (2020, October 29). Covid-19 Reshapes Global Circular Economy Practices. https://ksapa.org/covid-19-reshapes-global-circular-economy-practices/
6. KPMG. (2024). From talk to action: Paving the way for a circular economy in the consumer goods and retail industry. https://assets.kpmg.com/content/dam/kpmg/pl/pdf/2025/04/pl-gospodarka-cyrkularna-w-sektorze-dobr-konsumenckich-i-handlu-detalicznego.pdf
7. Maj, M. (2023). Gospodarka cyrkularna kołem się toczy. Puls Biznesu - Pb.Pl. https://www.pb.pl/gospodarka-cyrkularna-kolem-sie-toczy-1184776
8. Polska Agencja Rozwoju Przedsiębiorczości. (2025). Gospodarka o obiegu zamkniętym. https://www.parp.gov.pl/goz
9. Slachmuylders, H. (2021, June 10). Building back better after Covid-19 – the role of circular business models — Consumer Competition Market Blog. https://www.law.kuleuven.be/ccm/blog/posts/building-back-better-after-covid-19-the-role-of-circular-business-models
10. Turn your Waste into Value thanks to Circular Economy | Sfridoo. (2025). https://www.sfridoo.com/en/
Author: Dr Piotr C. Sosnowski, Department of Logistics
Edit: Faculty of Management, University of Lodz
