Chemical businesses may use the circular economy to achieve long-term value, resulting in tremendous social and environmental advantages.

Over the last five decades, the world population has doubled, while natural resource use has tripled. If current trends continue, global resource usage will double by 2060, while greenhouse gas emissions will increase by 43%. Currently, all 7.8 billion of us create over two billion tons of garbage every year, which equates to approximately 256 pounds per person. 

This rate of resource consumption jeopardizes the planetary limits, which determine humanity's safe working zone inside Earth's systems. Governments, corporations, investors, and consumers are now broadly in agreement: If we survive as a species, we must learn to live sustainably within the Earth's restrictions.

Although the objective is shared, most of the effort necessary to achieve it will rest on the shoulders of enterprises, which must dissociate economic development from the consumption of finite resources. One method replaces conventional linear value chains (based on the classic take-make-waste paradigm) with cycles that keep goods and materials in use at the item, component, or molecule level.

Chemical businesses may play an essential role in driving the development of these circular value chains, allowing for genuinely circular economies. Many chemical firms are already testing novel models for chemical "leasing," improved recycling technology for plastic-to-plastic repurposing, and the conversion of solid wastes to hydrogen.

However, enterprises must also demonstrate that these pilots can be financially successful at scale, necessitating major long-term expenditures in R&D, infrastructure development, engagement with new upstream and downstream partners, and a clear return on investment.

Chemical firms are aggressively pursuing circular business innovation now, and incorporating it into their short, medium, and long-term development plans will be well-positioned to benefit from the increased interest and investment of governments, regulators, and even consumers. Companies that fall behind in this area risk being overtaken by peers that acquire first-mover advantages by selecting like-minded value chain partners and establishing new supply networks.

Accelerating value chain collaboration to accomplish mutual goals for supply chain resilience and net social benefits is driving the development of new income streams that are proving to be long-term sustainable.

Chemical companies should look to their operational processes and value chains in the near term to identify opportunities for circular material loops that enable reuse and minimize waste and evaluate potential strategies where could substitute feedstocks (including energy) for bio-based or recycled sources.

For those who are less adaptable, the rate of change may soon pose a threat to conventional chemical business models and profits. Investor and consumer excitement for classic take-make-waste enterprises may decrease as customer tastes shift toward recyclable items and packaging, and authorities reinforce their views on single-use levies and expanded producer duties.

The moment has come for businesses to recognize the pressure on planetary boundaries caused by society's current path and identify the strategic possibilities that will genuinely position them as leaders of the future circular economy.