The Circular Economy Handbook

THECIRCULAR
ECONOMY
HANDBOOK
Realizing the Circular Advantage

FromWastetoWealthto
TheCircularEconomyHandbook
We first articulated the competitive advantage of a circular economy in Waste to Wealth (2015). This book highlighted
the opportunity for value capture by adopting five new circular business models and ten enablingtechnologies.
Copyright © 2020 Accenture. All rights reserved.
Worked for and collaborated with clients
and partners to deliver leading circular
economy strategies around the globe.
Found that efforts mostly focused on
“quick wins,” small-scale initiatives, or
programs can could be retrofitted into
business-as-usual environments.
Rising political and economic tensions, the pace and scale of
technological change, along with the urgency of the climate crisis
and resource scarcity are dramatically altering the landscape.
We have an unprecedented opportunity to transform
these challenges into opportunities, creating financial and
economic value for business and society. Our research
shows the value at stake is $4.5 trillion of upside by 2030.
In seizing the circular advantage, businesses can spur
innovation, create new markets and wisely pivot the global
trajectory toward one that is more sustainable and
resilient. It is time to turn theory into practice and act
now.
SINCE 2015 NOW
Analyzed more than 1,500 circular case
studies via The Circulars program, the
world’s premier circular economy awards
program run in collaboration with the
World Economic Forum.

THECIRCULARECONOMYHANDBOOK
is divided into three parts
WHERE ARE
WE NOW?
WHERE DO WE
NEED TO BE?
HOW DO WE
GET THERE?
Setting the foundations:
Exploring the five circular
business models, and the
disruptive technologies
of the 4th Industrial
Revolution
Scaling industry impact:
Identifying the biggest
challenges and
opportunities for value
capture across ten major
industries
Making the pivot:
Uncovering the path to
circular maturity across the
four organizational
dimensions of Operations,
Products & Services,
Culture & Organization,
and Ecosystem
3Copyright © 2020 Accenture. All rights reserved.

WHEREARE
WENOW?
Setting the foundation
WHEREDOWE
NEEDTOBE?
Scaling industry impact
HOWDOWE
GETTHERE?
Making the pivot
4
1
2
3

Resource
Recovery
Design
Manufacturing
Logistics
Product
of use
End
of Use
Recycling
Reverse
Logistics
Sourcing
Resource
Recovery
Circular
Inputs
Product
Use
Extension
Sharing
Platforms
Product
as a
Service
The circular business models
can bemappedacross the valuechain,focus onboth production and consumption,
and providea provenframework for circulartransformation
Circular Inputs: Using
renewable sources, bio-
based materials and
man-made materials,
that are recycled or
highly recyclable, to
enable partial or total
elimination of waste.
Productas aService: Retaining
ownership of products and selling
benefits through a service model.
5
Resource Recovery:
Using the embedded
materials or energy at the
end-of-use of a product and
recovering through
collection, aggregation and
processing.
Product Use Extension: Product’s
use extended through design
considerations, repairs,
reconditioning, upgrades and
resale for second use.
Sharing Platforms:
Optimizes utilization rates
of products and assets
through shared
ownership, access and
usage.Copyright © 2020 Accenture. All rights reserved.

CONSUMER
ENGAGEMENT
Re-shape what it means to
consume to support
evolving customer
demands and to drive new
behaviors.
There are five key enablers
we found through analyzing 1500+ case studies which are essential to capturing the full
potential of the circular business models
DESIGN
Plan for product clarity
to enable longer use-
cycles and end-of-use
recovery.
REVERSE
LOGISTICS
Create takeback loops
by managing the return
and recovery of
products back into the
value chain.
DISRUPTIVE
TECHNOLOGIES
Accelerate with 4IR
innovations to enable the
smart use of resources and
create new opportunities.
ECOSYSTEMS
Embrace the power of
external engagement and
build new networks to unlock
circularity at scale.

7
DIGITAL PHYSICAL BIOLOGICAL
Technologies based on
computer, electronics and
communication sciences,
which make use of the
increasing volume of
information and
connectedness of physical
resources.
Technologies based on basic
properties of materials,
energy, forces of nature and
their interactions.
Technologies based on
biological aspects, including,
but not limited to: biological
systems and living
organisms (or derivatives
thereof), to make products
and processes for specific
uses.
Disruptive 4IR technologies
are the single most important enabler accelerating the transition to a circular economy

The most competitive businesses deploy combinations
of technologies to achieve the best performance
Design
Manufacturing
Logistics
Product
of UseEnd-of-Use
Recycling
Reverse
Logistics
Sourcing
Digital Physical Biological
Data Analytics
Using aeroponics and
predictive analytics for
agricultural productivity,
reducing resource
consumption & waste
generation while
increasing quality output.
Aeroponics
8
Machine Vision
Using AI-enabled robotics
and machine vision to
fundamentally change the
costs of recycling. The
accuracy of waste
sorting system has
improved over time to
reach 99%.
Robotics

WHEREARE
WENOW?
WHEREDOWE
NEEDTOBE?
HOWDOWE
GETTHERE?
Making the pivot
9
1
3
2

Cross-cutting themes are driving the circular
transition of industries
The need to sustainably meet challenges of growing demand – to do more with less, while reducing
negative impact – is being felt across industries (e.g. produce more food with less deforestation).
Policymakers are targeting industries with regulations focused on accelerating transition
(e.g. regulations focused on appliance recovery and recycling).
Public awareness of waste-related issues (e.g. plastics, ‘fast fashion’) is driving
consumer pressure on both B2C and B2B industries – from FMCG to
chemicals and mining – to address their concerns through circular solutions.
Technology advancements are happening across industries, enabling
new circular opportunities, from machine vision to reduce food waste,
to pressurized CO2 to eliminate water from the textile dyeing process.
Opportunities for industry cross-over and transformation (e.g. at
the intersection of end-of-use recovery and circular inputs) are growing,
as technology and infrastructure unlock new possibilities.

Industries can generate financial value
and maintainor improvemarket share through circularopportunities
Value addition through reducing costs, such as through
designing leaner products, sourcing circular materials,
improving forecasting to reduce unsold product or
producing more efficiently.
Value migration between industry players or from one
type of product/service to another, driven by growth in
alternative products (e.g. EVs in automotive; renewables
in utilities) and refurbished/second-use markets (e.g.
fashion, electronics devices).
Value addition through new sources of revenue, such as
circular business models, brand differentiation and
market share or premium pricing in some industries.
VALUE AT STAKE BY 2030 TYPES OF CIRCULAR VALUE
Value
Addition:
Cost
Value
Migration
Value
Addition:
Revenue
$USDBillion
$500
$400
$100

12
Each industry is at a different stage
intheircircular transition withuniquewaste challenges,but there ispotential to realize
significantvaluethrough large-scaleadoption
2%
Oil and Gas Household Electricity ME&I
$80 bn $5 bn $300 bn $135 bn
Devices/ICT Personal Mobility FMCG Fashion
$30 bn $385 bn $65 bn $55 bn
Copyright © 2020 Accenture. All rights reserved. *Average industry value at stake by 2030

WHEREARE
WENOW?
WHEREDOWE
NEEDTOBE?
HOWDOWE
GETTHERE?
Making the pivot

01 Transform the existing value chain to
remove waste, reduce value erosion and
drive up investment capacity.
The wise pivot provides a roadmap for the
transition to a circular business
02 Grow the core business organically with
circular offerings embedded to sustain
fuel for investments.
03 Invest in disruptive growth opportunities
that will take organizations’ circular
journeys to the next level.

Organizations must mature across
four fundamental dimensionsinorder to successfully pivotto circularity
15
OPERATIONS PRODUCTS & SERVICES
CULTURE & ORGANIZATION ECOSYSTEM
Collaborating and partnering with
public- and private-sector actors to
create an enabling environment for
collective transformation.
Addressing the value lost through
the operations and by-products of
business processes across energy,
emissions, water and waste.
Rethinking the design, lifecycle and
end-of-use of a product or service to
optimize usage, eliminate waste and
close product loops.
Embedding circular principles into the fabric
of an organization through redefined
working practices, policies and procedures.

Investors and policymakers must help remove barriers
to support organizations in the global transition
by targeting newapproaches whichovercome linearstructures and systems
Copyright © 2020 Accenture. All rights reserved. 16
INVESTORS
POLICYMAKERS
Reevaluating
measurements of financial
risk
Adapting the
“corporate finance
toolkit” 1
Mobilizing the required
capital, $3.9tn a year in
developing countries alone 2
Steering regulations towards
practices that yield the highest
value of waste & scarce materials
Incentivizing circular
behavior through taxation
Investing in infrastructure to
recover & recycle materials and
integrate back into production
Redefining waste definitions
to avoid discarding material
with unlocked value
Refining product quality and
safety regulation to reduce
limits on product reuse
1 Katherine Garrett-Cox, CEO of Gulf International Bank (UK)
2 UNCTAD, “Promoting investment in the sustainable development goals,” 2018,

global value at
stake by 2030$4.5 trillion business models
27 disruptive
technologies
5
industries
10
1500 case studies analyzed, 300+ featured
17
THECIRCULARECONOMYHANDBOOK

1818
Howcan you
capture your
circular
advantage
today?
Contact us to learn more at
circularadvantage@accenture.com
www.accenture.com/circulareconomyhandbook

The Circular Economy Handbook

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