Smartphones have become an essential part of our lives. As of 2024, around 4.88 billion people worldwide now own smartphones. But have you ever considered what happens to your phone when you upgrade to a new one? On average, a smartphone lasts just 2 to 3 years before it’s either tucked away in a drawer or tossed into a landfill. There, it can leak toxic chemicals and contribute to the growing issue of electronic waste.
But what if smartphones—and other tech products—were designed differently? Imagine modular devices with parts that can be easily repaired, replaced, refurbished, or recycled. Not only would this cut down on environmental damage, but it would also help manufacturers manage rising raw material costs. This is just an example of shifting away from a linear model of consumption, to what is known as circular transformation.
As businesses face mounting economic pressure, the circular economy offers a smarter, more resilient path forward—one that reduces waste, strengthens supply chains, and opens up new revenue streams. By embedding circular principles into their operations, companies can improve profitability while supporting long-term sustainability.
Yet, the latest Circularity Gap Report reveals a troubling reality: only 8.6% of the global economy is circular. This means that of all the minerals, fossil fuels, metals and biomass that enter the economy each year, just 8.6% are cycled back. The rest doesn’t just harm the environment, it’s a huge burden on industries and economies.
To reverse this trend, businesses, policymakers, and industry leaders must work together to scale sustainable and circular solutions.
EVP Power Products Division, Schneider Electric.
What does circularity look like?
According to the Ellen Macarthur Foundation, “The circular economy is a system where materials never become waste and nature is regenerated.” Essentially, it’s a departure from the linear take-make-waste model, to a more regenerative, sustainable, and resilient one.
To turn this into action, businesses should incorporate the Ecodesign principles “use better, use longer, and use again” into their product and service offerings, operations, and customer engagement. It might not be an immediate transformation, but an incremental one.
Circularity as a competitive advantage
The perception that circular business models are less profitable is outdated. In fact, companies that integrate sustainability into their core strategies can gain a significant competitive edge. Circularity enables businesses to manufacture products more efficiently, with less —an advantage at a time when material costs remain high and businesses look to cut costs.
By adopting circular design principles, companies can ensure greater repairability, reduce waste, and optimize resource use. With over 80% of a product’s environmental impact determined at the design stage, it’s crucial for repairability, reusability, and modularity to be considered right from the start. Additionally, circularity can help mitigate risks associated with geopolitical instability, as businesses become less reliant on volatile supply chains for raw materials.
The key to widespread adoption lies in demonstrating value. Customers must see the tangible benefits of circular models, including cost savings, improved product longevity, and environmental impact reductions. With regulation like the EUs Circular Economy Action Plan, it is becoming increasingly important for compliance.
Investing in education, awareness, and market readiness will be essential in fostering a circular mindset across industries. Larger companies should be working with suppliers and partners to educate them and help implement circular actions.
Scaling circular solutions through industry partnerships
Collaboration is at the core of a successful circular economy. Industry partnerships can accelerate the adoption of circularity by creating shared ecosystems where waste is minimized, and resources are maximized.
Businesses should also look to established ‘recycler’ partners with proven reverse logistics capabilities. At our MasterTech site, MasterPact circuit breakers are collected, disassembled, upgraded, and reintroduced into the market, meeting the same stringent quality standards as new products. This initiative has led to a 45% reduction in emissions per unit, equating to savings of approximately 755kg of CO2 per MasterPact.
Overcoming barriers to circularity: A collaborative effort
Despite its benefits, circularity presents challenges, particularly in reverse logistics, which can be up to 11 times more expensive than traditional supply chains. Costs associated with returns, transportation, and refurbishment can be prohibitive. However, strategic partnerships can help alleviate these pressures by distributing costs and leveraging shared expertise.
Industrial symbiosis—where one company’s waste becomes another’s resource—further enhances efficiency and reduces costs. Moreover, designing products with modularity, upgradability, and ease of repair in mind will make circular business models more viable.
A circular future: The path to economic and environmental resilience
In today’s rapidly evolving geopolitical landscape, embracing circularity is not just an environmental imperative but an economic one. Businesses that integrate sustainable models will be better equipped to withstand supply chain disruptions, manage costs, and achieve long-term profitability.
Achieving a circular future requires a fundamental shift in how we design, produce, and consume. From sustainable product packaging—such as using 100% recycled materials—to developing upgradable, repairable products, every step counts toward creating a more resilient global economy.
For industries worldwide, sustainability is no longer a secondary consideration; it is central to future success. By fostering strategic partnerships and embedding circularity at every level, businesses can drive innovation, strengthen resilience, and pave the way for a net-zero world. The future is circular, and the time to act is now.
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