OPINION: Despite reports suggesting companies are dropping or rowing back on their circularity and sustainability commitments amidst a challenging economic and geopolitical backdrop, the reality is the opposite. Businesses are doubling down, recognising that circularity is critical to commercial success, long-term value creation and lowering carbon emissions.
There is a long way to go but the drivers are there
The global circularity metric has continued to fall due to the rapid growth in material extraction which is outpacing secondary material use and is now just 6.9.%. This means that economies are placing unsustainable pressure on the earth’s ecosystems, consuming resources faster than the planet can regenerate them, and the extraction of virgin materials contributes significantly to carbon emissions.
However, consumers are increasingly prioritising sustainability in their consumption practices even as cost of living pressures weigh. Regulation is the other major driving force behind the push towards more circularity and businesses are having to prepare for a raft of upcoming regulation progressing across the EU and UK over the next few years.
Businesses increasingly see circularity as key to lowering costs, unlocking value and reducing carbon footprints
In a challenging macro-economic environment, companies recognise the commercial benefits of circular models. By extracting greater value from fewer resources, they can unlock new revenue streams and strengthen resilience against future economic shocks. This is particularly relevant as global competition intensifies for access to rare earths and critical materials.
Circularity also offers a clear pathway to reducing carbon emissions. More efficient product design through to reduced and redesigned packaging, lower-carbon materials, less energy-intensive manufacturing and reduced waste, can directly cut Scope 3 emissions. PWC research shows that innovation in product design is now one of the top actions companies are taking to address Scope 3, leading to tangible benefits such as longer-lasting products, more efficient use, lower operational costs and reduced end-of-life impacts.
Businesses are also strengthening broader sustainability commitments to build resilience in a 2.5°C world
There remains a strong commitment among businesses to wider sustainability targets viewing it as a key way to reduce risk, respond to evolving customer expectations, and secure long-term growth and resilience. The number of companies making climate commitments continues to grow and 37% of companies increased their ambitions in 2024 according PWC Research.
Many businesses have embedded climate-risk management and climate adaptation into core operational and financial decision-making to manage financial volatility, comply with new regulations and secure affordable insurance coverage.
Businesses are also more alert to accelerating nature loss with more than one million species globally threatened with extinction and significant declines in the UK’s biodiversity since 1970. This rapid deterioration poses risks for the private sector, with UK financial assets highly dependent on robust ecosystems. As a result, organisations are recognising the role of private capital in restoring natural systems and the UK government committed to facilitating the mobilisation of £500 million of private finance for nature annually by 2027, rising to £1 billion by 2030.
Focusing on sustainability commitments also makes companies more likely to attract capital with large asset owners incorporating sustainability goals into portfolios.
Companies that see sustainability as a strategic imperative will bolster resilience and drive long-term competitive advantage
With global momentum coalescing around the International Sustainability Standards Board (ISSB) standards, businesses are likely to see voluntary and mandatory sustainability reporting expectations become more consistent, comparable and embedded in financial and risk decision-making throughout 2026.
Those that integrate circular thinking, climate action, product sustainability, nature and financial commitments, will be best positioned to unlock long term sustainable growth, meaningful revenue and margin upside.
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