So where do we need to look if we want to significantly reduce the emissions? The current emission reduction efforts mainly focus on the energy transition by moving away from fossil energy sources towards renewable energy sources and taking energy efficiency measures. This can make a huge contribution to the emission reduction, but it also poses a challenge: moving towards renewables will increase resource and material demand. As a recent KPMG report suggests1, the pace in which these resources need to become available to meet the 2-degree scenario requires circular solutions2.
While 55% of current global GHG emissions is related to energy systems, transportation and heating of buildings, 45% can be attributed to the production of products and materials (ranging from heavy industry to food)3. To bridge the emissions gap, companies should ramp up action and drive down emissions by rethinking the use of products and materials. Circularity is the key to achieve the reductions on the product side. This not only drives the companies to reach their carbon ambitions, but it can also make complete business sense. By extracting value from extending rather than shortening product and material lifetime, circular strategies offer compelling strategic and operational benefits to significantly reduce CO2 emissions and garner operational cost savings. Capturing this value requires rethinking of existing business models towards circular models that can serve a world with a growing population.