Circular Economy: How do businesses communicate about it?

The concept of the circular economy has gained significant momentum in the past couple of years. This win-win $4.5 trillion opportunity^[1] has gained attention around the world, especially within the business community. Most companies are just beginning their circular journey; few have been working toward the circular economy for more than a couple of years. Regardless, companies are now trying to find the best way to communicate about their circular activities. How do companies currently communicate about their participation in the circular economy? Are there significant differences in approach between business-to-business (B2B) and business-to-consumer (B2C) companies?

Communication on sustainability is well established. Whether for advertising, advocacy, or reporting and disclosure, companies are well versed in communicating their sustainability efforts. Available literature^[2] suggests that stakeholders push B2C companies to report and disclose sustainability information due to stakeholder pressures more than B2B companies. Due to fewer interactions with end-users, B2B companies more often find themselves under less scrutiny.

Communication on the circular economy is much more nascent. As part of its annual Reporting Matters initiative, the World Business Council for Sustainable Development (WBCSD) observed that 49% of 2017 sustainability reports reviewed mention the “circular economy.” Companies are increasingly communicating about the circular economy, particularly in professional or non-consumer conversations.

General consumers are not as familiar with the circular economy concept yet. Most B2C companies use accessible and commonly understood terminology to evoke the circular economy. Instead of describing a company or product as “circular,” they use words such as “leasing,” “repaired,” or “reused.” Most company homepages do not mention “circular economy.”

For example, Fairphone’s modular phone could be described as circular or at least responding to some circular principles. Instead the company describes its phone as being “built to last” or “modular.”

When B2C companies mention circular economy, it’s often in the context of broader societal trends or priorities. P&G mentions its Head & Shoulders recyclable shampoo bottle made from beach plastics throughout its sustainability report. Like Fairphone, P&G could have linked this product quite strongly to the circular economy, but it mentions “circular economy” only once in its sustainability report. In the company’s terms, it’s not a circular shampoo bottle but a recyclable shampoo bottle made with beach plastic.

B2B companies on the other hand tend to communicate in a more technical manner, addressing material efficiency, resources saved, greenhouse gas emission reductions, and so forth. Many highlight the business opportunities within the circular economy. Philips, for example, talks about “circular opportunities” and “generating circular revenue.” DSM mentions the opportunity for “increased productivity; improved sustainability and innovation” and describes circular economy as playing a “central role as a business driver.” IFF points to the “mitigation of risks” through the implementation of circular strategies. Veolia highlights circular economy-based revenue targets.

While the circular economy communications conversation is just now developing, we can anticipate that this emerging field will be elaborated on much more in the coming months and years.