Article

The linear model—extract, manufacture, dispose—has become a well-documented strategic risk. Raw material volatility, geopolitical dependencies on critical resources, and accelerating regulation (AGEC, CSRD, PPWR): companies that fail to incorporate these dynamics into their strategy expose themselves to growing industrial and financial risks.

The circular economy is not merely a moral response to these challenges. It is a performance strategy tailored to a world of limited resources. This article lays out its foundations: its definition, principles, and what it means in practical terms for businesses.

Qui sommes-nous ? Circul'R est un cabinet de conseil stratégique spécialisé en économie circulaire depuis 2017. +250 missions réalisées, 70 % du CAC 40 accompagné, +100 organisations membres du Club Circul'R, +12 coalitions sectorielles lancées depuis 2018.

1. Definition of the circular economy

The circular economy is an economic model designed to decouple value creation from the consumption of natural resources. Whereas the linear model follows the "extract-manufacture-consume-dispose" pattern, the circular economy organizes material flows into closed loops: products and materials retain their value for as long as possible, primarily through reuse, repair, refurbishment, and recycling.

Définition ADEME : L'économie circulaire est « un système économique d'échange et de production qui, à tous les stades du cycle de vie des produits, vise à augmenter l'efficacité de l'utilisation des ressources et à diminuer l'impact sur l'environnement tout en développant le bien-être des individus. »

Three practical implications for businesses: (1) reducing dependence on virgin raw materials and vulnerability to supply shocks, (2) creating new sources of competitiveness through business models based on usage and product lifespan, (3) complying with regulations whose scope expands every year.

What the circular economy is not

The circular economy is not a peripheral CSR issue. Dependence on critical resources, raw material volatility, and regulatory risks are challenges directly linked to companies’ economic performance. This conviction has underpinned Circul’R’s approach since its inception: we step in where decisions have a lasting impact on organizations’ business performance.

2. The 7 pillars of the circular economy (ADEME framework)

ADEME organizes the circular economy around seven complementary pillars. Their strategic importance varies depending on the sector, the value chain, and each company’s resource dependency profile. An effective circular strategy integrates several of these pillars simultaneously, prioritizing them based on their economic and environmental impact.

• Sustainable procurement: incorporating circularity criteria into purchasing—such as recycled materials, certified suppliers, and reducing reliance on critical resources. This is often the pillar with the greatest immediate financial impact.
• Eco-design: designing from the outset to extend product lifespan, facilitate repairs, limit the use of problematic substances, and facilitate recycling at the end of a product’s life. This is one of Circul’R’s eight core areas of expertise.
• Économie de la fonctionnalité : vendre l'usage plutôt que la propriété (leasing, paiement à l'usage, produit-service). Le producteur conserve la responsabilité du produit en fin de vie.
• Responsible consumption: steering purchasing decisions toward sustainable, repairable, and recyclable products. This is becoming an increasingly important issue with the CSRD reporting requirements on procurement policies.
• Extending the useful life of products: repair, refurbish, and reuse before they reach the end of their life. A key pillar in the construction, textile, and electronics sectors.
• Recycling: transforming end-of-life materials to reintroduce them into new cycles. The last resort in the hierarchy, but essential for waste streams that cannot be treated at earlier stages.
• Waste recovery: recovering energy or materials from non-recyclable waste streams. Dealing with the inevitable—not a strategy.

Circul'R Method Point

In our projects, we consistently use the seven pillars as an analytical framework, but we prioritize the levers based on two criteria: the company’s exposure to material risks and the potential for creating economic value per pillar. The approach is both economic AND environmental.

3. The 3 founding principles (Ellen MacArthur Foundation)

The Ellen MacArthur Foundation, a global leader in this field, defines the circular economy based on three guiding principles that form the foundation of any serious strategy:

1. Éliminer les déchets et la pollution dès la conception : penser la fin de vie dès le design évite de créer des problèmes coûteux à résoudre plus tard. C'est la logique de l'éco-conception : la valeur se préserve en amont, pas en aval.
2. Maintenir les produits et matériaux en circulation à leur valeur la plus haute possible : par ordre de préférence : réemploi, réparation, reconditionnement, recyclage. Chaque niveau préserve davantage la valeur économique et réduit la consommation d'énergie.
3. Restoring natural systems: returning organic nutrients to biological cycles. This is particularly relevant for the agri-food, cosmetics, and bio-based chemicals sectors.

These principles are not mere intentions: they translate into business decisions, sourcing choices, and revenue models. It is this operational implementation that Circul'R supports in its more than 250 projects.

4. Circular economy and recycling: the most common misconception

Equating the circular economy with recycling is the most widespread and costly misconception in terms of strategy. Recycling is the sixth level in a hierarchy of seven options, ranked from most to least effective in terms of value retained:

1. Refuser / réduire (moins de matière dès l'origine = impact maximum sur les coûts et les risques d'approvisionnement)

2. Réutiliser (même produit, même usage, sans transformation)

3. Réparer (prolonger la durée de vie avec intervention minimale)

4. Reconditionner / remettre à neuf (restaurer les fonctionnalités à leur niveau d'origine)

5. Recycler (transformer la matière pour un nouvel usage = consommateur d'énergie)

6. Recover energy (recover residual energy = last resort)

Investing heavily in recycling while claiming to practice the circular economy amounts to focusing on the least effective level of the hierarchy. A serious circular strategy prioritizes levels 1 through 4: where economic value is preserved to the greatest extent and processing costs are lowest.

Greenwashing warning sign

Any communication that equates recycling with the circular economy exposes the company to a clear risk of greenwashing, particularly in light of the Green Claims Directive (scheduled for adoption in 2026), which strictly regulates environmental claims.

5. Why the linear model has become a documented strategic risk

5.1 Dependence on critical resources

The European Commission has identified 34 critical raw materials for 2024 (lithium, cobalt, rare earths, natural graphite, etc.). For manufacturers, electronics companies, automakers, and firms involved in the energy transition, this dependence poses a quantifiable—not hypothetical—supply risk.

At Circul'R, our expertise in supply chain security lies specifically in identifying critical dependencies beyond the first tier, quantifying the revenue at risk, and leveraging circular economy solutions to reduce this vulnerability. The issue is not the material itself, but rather the performance that depends on it.

5.2 Regulation as a catalyst for transformation

The French and European regulatory frameworks make the circular economy a necessity for large companies, with a timeline that is accelerating:

• AGEC Law: Extended Producer Responsibility (EPR) obligations, prohibition on the destruction of unsold goods, and packaging reuse targets. Non-compliance poses direct legal and reputational risks.
• CSRD: Mandatory reporting on process circularity for companies with more than 250 employees. Claims not backed by measured data are now subject to scrutiny.
• Règlement PPWR (Packaging & Packaging Waste Regulation) : objectifs contraignants sur le contenu recyclé et la recyclabilité des emballages d'ici 2030, avec des seuils progressifs.
• European Green Taxonomy: a classification of sustainable activities that incorporates circularity criteria. A key factor in accessing ESG financing.
• Ecodesign for Sustainable Products (ESPR) Regulation: phased-in ecodesign requirements for numerous product categories.

Circul'R continuously monitors regulatory developments and actively participates in institutional working groups—including the European Commission (ECESP), SGPE, DGPR, and DG Trésor—to anticipate changes and help shape them.

5.3 The economic lever: what our missions reveal

Companies embarking on a structured circular transformation are not doing so for abstract environmental reasons. They are doing so because the economic benefits are measurable:

Ce que montrent nos missions : +250 missions réalisées auprès de 70 % du CAC 40 et du SBF120 montrent trois leviers récurrents : réduction des coûts d'approvisionnement par substitution de matières vierges, création de nouveaux flux de revenus via des modèles d'usage et de réemploi et amélioration de la position compétitive face aux exigences d'acheteurs B2B qui intègrent des critères de circularité dans leurs appels d'offres.

6. The Circul'R Approach: How We Work

Circul'R steps in when decisions have a lasting impact on an organization’s economic performance. Our work is structured around two complementary dimensions: four approaches and eight areas of expertise.

6.1 Our 4 approaches

Depending on your organization’s level of maturity and the nature of your challenge, we provide support through one or more of these four approaches:

• Training: Over 10,000 transition stakeholders trained in the circular economy. Programs tailored to executive committees, business teams, and CSR departments, designed to equip teams with the tools needed to integrate circularity into strategic and operational decisions.
• Consulting: circular maturity assessment, strategic roadmap, impact modeling (environmental, financial, regulatory), solution sourcing, and support for pilot projects. We map out the transformation path and help execute it.
• Coalitions : +12 coalitions lancées depuis 2018, +70 entreprises impliquées, +10 livrables en open source. Circul'R structure des coopérations entre acteurs d'une même chaîne de valeur pour lever les verrous techniques, économiques et réglementaires que personne ne peut lever seul.
• Le Club Circul'R : +100 organisations membres, +50 événements depuis 2018, 9,5/10 de satisfaction. Le lieu de rencontre des acteurs économiques engagés dans la circularité : retours d'expérience transsectoriels, décryptage réglementaire, matching qualifié avec des solutions circulaires.

6.2 Our Expertise: 8 Strategies to Accelerate Your Transformation

These eight areas of expertise cover all the strategic and operational decisions you need to organize. They are structured around three key areas: securing resources, transforming business models, and managing performance and credibility.

Priority Area 1 - Securing resources and the value chain

Is your business model exposed to the volatility of a particular commodity? Do your supplies depend on countries facing increasing geopolitical risks? These two areas of expertise are specifically focused on reducing this vulnerability.

• Stratégie, gouvernance et indicateurs : définir des trajectoires de transformation, structurer la gouvernance interne, aligner les métiers et piloter la performance économique et environnementale. Relier la stratégie circulaire à un ROI chiffré et la porter au niveau COMEX.
• Sécurisation des approvisionnements : identifier les dépendances critiques, quantifier le chiffre d'affaires à risque, anticiper les expositions géopolitiques. Le sujet n'est pas la matière : c'est la performance exposée à cette matière.

Priority Area 2 - Transforming Business Models

Are your products designed for a short lifespan, even as regulations push toward eco-design? Is your revenue still entirely tied to the sale of new products, even as your customers demand usage-based models? These three areas of expertise are central to the transformation.

• Eco-design: adapting products and packaging to circular models, selecting materials and technical designs, and ensuring industrial and economic feasibility.
• Circular business models: designing and implementing revenue-generating models such as second-hand sales, rentals, repairs, and refurbishment. Incorporating a multidimensional ROI and evaluating economic and environmental impacts from the design phase onward.
• Réemploi des emballages : structurer des filières mutualisées de réemploi viables à l'échelle d'une chaîne de valeur. Sans approche écosystémique, le réemploi reste expérimental.

Priority Area 3 - Driving Performance and Credibility

Votre direction financière demande un business case sur la circularité avant de valider un investissement ? Vos équipes communication sont exposées au risque de greenwashing ? Ces trois expertises répondent à ces enjeux de mesure, de financement et de communication.

• EPR Models: Supporting public and private stakeholders in understanding, structuring, and implementing EPR obligations. EPR is an essential tool for financing ambitious circular economy projects.
• Communication circulaire : construire des narratifs fondés sur des preuves, sécuriser la conformité anti-greenwashing, valoriser les offres circulaires. La communication n'est pas le point de départ : elle est la conséquence d'une transformation réelle.
• Circular finance: integrating circularity into financial models (CAPEX/OPEX, business cases, full-cost accounting), demonstrating value creation, and securing access to financing. The obstacle is not financing; it is understanding circular risks and dynamics.

Conclusion

The circular economy is a strategy for economic resilience in a world of limited resources. Understanding its definition is the first step. Identifying the key levers for your value chain, modeling the impacts, and developing a credible roadmap is the next step.

This is exactly where Circul'R comes in: with expertise built on over 10 years of exclusive projects, a community of over 100 organizations committed to the Club, and 12 sector-specific coalitions that are leaders in their respective industries.

Contactez notre équipe pour un diagnostic de maturité circulaire adapté à votre chaîne de valeur, ou rejoignez le Club Circul'R pour bénéficier des retours d'expérience de +100 organisations engagées.