91% of industrial businesses are experiencing resource scarcity, which is prompting 67% to increase investments in circular economy initiatives within the next three years, new report shows.
The “Circularity: No Time to Waste” report from ABB Motion shows raw materials are viewed as the scarcest resource, with 37% of industrial businesses reporting they experience scarcity. Raw materials are followed by energy (34%), labour (32%), and electronic components (26%). While 40% reported energy as their biggest source of waste.
The report shows resource scarcity is leading to increased costs, supply chain disruption, and slowdowns in production. 37% of businesses surveyed said that resource scarcity has led to increased costs, 27% said they had experienced supply chain disruption and 25% highlighted slower production capacity.
In response to resource scarcity, 58% of industrial businesses said they expect to increase their circularity budgets in the next year. 67% expect an increase in the next three years and 66% expect an increase in the next five years.
The report also identified obstacles to transitioning to a circular economy. The survey showed that no single definition of “circularity” was accepted by the majority of respondents and only 8% saw circularity as a company-wide responsibility.
Embracing circularity is not only essential for safeguarding our environment but also for enhancing business resilience.
41% of industrial businesses said they partnered with waste management companies, 37% incorporated energy-efficient technologies, and 32% promoted “circular principles” in the supply chain. 67% said they are using recycled materials in their products “to some extent”.
46% of businesses surveyed said they have reduced waste and improved energy efficiency by investing in circularity. Despite these benefits, the report said some businesses expressed concerns about the upfront investment required.
However, 78% agreed that the circular economy “encourages innovation and drives competitiveness”. While 74% supported increased regulation and reporting requirements and 77% want more government support for adopting circular business practices.
Tarak Mehta, President of ABB Motion, commented: “The pressing need to transition to a circular economy has never been clearer. Our current way of life is depleting resources at an unsustainable rate, contributing to emissions and climate change. Embracing circularity is not only essential for safeguarding our environment but also for enhancing business resilience.”
The survey, conducted by Sapio Research in October 2023, collected responses from 3,304 “industrial decision-makers” across 12 countries including the US, China, India, UK, Sweden, Germany, and France.
