Nearly 80 percent of the interviewed companies estimate that their competitors will significantly develop their circular economy activities over the next five years, with Finnish companies currently leading in almost all metrics. Finland is a pioneer in the adoption and implementation of various circular economy strategies.
The report published in December presents a new circular economy index that reflects the level and growth of circular economy activity among the interviewed companies. In Finland, the circular economy index is 25 percent, while in comparison, Denmark’s is only 16 percent. There is room for improvement in all Nordic countries. For example, Finland’s national circular economy strategy aims to double the circular economy rate of materials from 2015 to 2035.
The circular economy generates economic benefits, i.e., income or savings, for 43 percent of the listed companies in the study, especially through repair and re-manufacturing strategies. Finnish companies excel particularly in integrating repair services into their business operations and using procurement criteria to accelerate the circular economy and create markets.
How does the circular economy manifest in the operations of Finnish companies?
Finnish companies are renewing their business models to improve long-term resilience and relevance. They are not only responding to global market trends and regulatory changes, says Michael Hanf, Head of Sustainable Business at VTT. One good example is the Fiskars Group, whose one of the main sustainability goals is that over 50 percent of its revenue will come from circular economy products and services by 2030. In just a few years, this share has risen to 24 percent of revenue. Outokumpu’s entire operation, on the other hand, is based on the circular economy. The stainless steel we produce is made from 95 percent recycled materials and is fully recyclable at the end of its life. Two years ago, we introduced an innovation with a carbon footprint up to 93 percent smaller than the global industry average. This is a concrete demonstration of the impact of a high recycling material rate on minimizing emissions, comments Outokumpu‘s Sustainability Director Heidi Peltonen.
Now we need to ensure that Finnish companies truly gain a competitive edge. The public and private sectors can support the market by setting goals and procurement criteria, for example, in Circular Economy Green Deal commitments, urges Simo Karetie, Project Manager of the Helsinki-Uusimaa Circular Hub.
Business, competition, and climate change drive companies to develop a circular economy
The report examined listed companies in Finland, Denmark, Norway, and Sweden, their circular economy outlooks, and the extent to which they have already integrated the circular economy into their business strategies and operations. The study covered all 809 listed companies in these countries. 38 percent of the companies participated in the study in some way, either by responding to a survey or an interview.
The analysis indicates that the circular economy is rapidly becoming a strategic necessity for companies. Almost all interviewed companies claim to have integrated the circular economy into their business at some level, but only 39 percent have set goals. The survey revealed that the use of commonly used R-strategies in the circular economy, particularly REMAKE (used by 26 percent of companies) and RETHINK (used by 35 percent of companies), are underutilized. These are leading circular economy strategies for generating income and cost savings.
The circular economy is a solution model for halving climate emissions. About half of the world’s climate emissions can be eliminated by minimizing the extraction of raw materials from the earth and maximizing the reuse and recycling of materials. The Nordic countries perform poorly in this regard, and all countries fall below the global average circular economy rate, which is 7.2 percent. This figure is also declining. Material reserves are depleting globally, and most material flows are managed by companies, so their material-related decisions are crucial.
Circular Economy Outlook 2024 Nordics report (in English)
The report was published by the Swedish think tank Cradlenet and the state research center RISE in collaboration with research institutes VTT, NORCE, and DTI. The interviews in Finland were conducted by VTT. The Uusimaa Circular Economy Valley acted as a co-sponsor of the report.
Author: Pipsa Salolammi / Helsinki-Uusimaa Regional Council