Being "circular" makes a company more competitive, our study proves.

The full study is presented in a recent article, which can be requested on my Researchgate webpage:

https://www.researchgate.net/publication/332952831_Drivers_and_approaches_to_the_circular_economy_in_manufacturing_firms

Much of the literature has investigated what the most innovative business models are, in order to successfully implement circular economy principles within a company. However, today the majority of companies are still based on traditional business models, thus it is important to study how to get these companies to adopt more circular practices. Our study analyses a wide sample of Italian manufacturing companies to understand to what extent the existing “conventional” business models have approached the new paradigm of a more circular economy.

The novelty of this study can be summarized as follows. First, the study offers a unique insight into the level of adoption of CE principles in manufacturing firms, highlighting several approaches focused on different elements of the value chain. Second, the study develops a new way of measuring the integration of CE by highlighting the need to explore how the CE paradigm needs to be integrated into several business functions: from logistics to procurement, design, production, marketing and communication. Third, the research contributes to the current academic debate on the antecedents of environmental practices by highlighting that the business case logic is the only driver that is currently able to move a company from a linear to a circular approach.

Data were collected through a questionnaire-based survey of 821 Italian companies. A cluster analysis was performed to classify their current level of implementation of the circular economy principles and a logit regression was carried out to identify the most effective drivers.

The study's results reveal that the internalization of circular economy principles is still at an embryonic stage since just onethird of the surveyed companies had started to change their routines in order to become more circular. In detail, five different levels of adoption of CE practices clearly emerge. The majority of firms (65.6%) still adopt a linear approach or just focus on providing information to end-users in order to maximize their satisfaction during the use phase. In contrast, three circular approaches emerge: 10% of firms are focused on resource efficiency and aim to align cost reduction with a reduced environmental impact; 15% of firms are more focused on a product stewardship strategy, and seek to increase their market competitiveness by offering a product with a higher environmental value. Finally, 8% of firms seem to have approached to CE in a holistic way, by integrating CE principles in all business functions

Five clusters of companies were identified: 1) “information-oriented companies” (24%), the best at communication and marketing-related activities, but the worst in relation to all the other aspects; 2) “linear companies” (41.6%), those that perform poorly in all five phases; 3) “green marketers” (15.5%), which perform well in relation to design, production and consumption; 4) “optimizers” (10.6%), which focus more on production and logistics and 5) “circular companies” (8.1%), those that register a good performance with respect to all aspects.

The bad performers as to "circularity", i.e. clusters 1 and 2, also registered the worst economic and competitive results in the last three years, whereas the “circular champions” reported the best performance.

Finally, the logit regression showed that economic drivers were the most effective at encouraging “linear companies” to adopt more circular business models.

On the other hand, no significant evidence was found of any influence exerted by the drivers related to regulatory pressure, resource exploitation risks, and the pursuit of environmental values.