According to the study, three factors are crucial for success: a cash- or growth-oriented mindset, strong leadership, and effective risk management. Companies with sufficient financial resources are better able to sustain a circular project through economic downturns. “A strategic vision and consistent communication with shareholders are essential,” the researchers state. External factors, such as political stability and commitment within the value chain, also play a significant role.
Unsuccessful projects often falter due to shifting corporate priorities. When the focus moves from growth to cost-cutting—often due to economic challenges or strategic realignments—circular ambitions are among the first to be abandoned. Additionally, companies operating in low-margin sectors often lack the necessary expertise and risk appetite to complete such transformations successfully.
Notably, the interviewees expressed widespread pessimism about established companies taking a leading role in the circular transition. “The focus is too much on short-term shareholder value,” the study concludes.
To improve the success rate of circular projects, intervention from business leaders and the value chain is essential. Government support, customer engagement, and collaboration with insurance partners could play a decisive role.
Read the full report on the MNEXT website
Image: Chawranphoto/Shutterstock
