A study on how the circular economy is implemented in the strategies and operations of the Nordic publicly listed companies has been published for the first time. Finnish companies performed the best on almost all metrics, although there is still much work to be done in all Nordic countries.
The study Circular Economy Outlook for the Nordics explores the adoption and execution of strategies for material and resource efficiency among publicly listed companies in the region.
The report indicates that the main drivers of the circular transition are new business opportunities and the reduction of climate emissions. Most companies expect their competitors to develop significant circular capabilities, and many also believe that EU circular regulations will provide a competitive advantage.
The study was conducted by Cradlenet and RISE, in collaboration with the Danish Technological Institute (DTI), Research Centre of Norway (NORCE), and the Technical Research Centre of Finland (VTT). VTT was in charge of the interviews in Finnish companies.
“Finland is clearly a leader—we’re best in class—but we still have work to do,” says Michael Hanf, Sustainable Business Lead at VTT.
Sustainable Business Index – New method for measuring circular activity
The report introduces a new method for measuring circular activity in companies: the Circular Business Index. This metric assesses the intensity and scope of collective circular efforts across all publicly listed companies. Expressed as a percentage, with a maximum value of 100%, the Circular Business Index for Nordic public companies is currently 21%.
“This indicates a significant potential for improvement. The majority of all material flows are managed by companies, so their actions decide the speed of transition in society. This gauge is a leading indicator that enables us to assess expected scope of efforts in the near to mid-term future, says Michel Bajuk, director of Cradlenet and co-author of the report.
Finland leads with a Circular Business Index (CBI) of 25%, the highest among Nordic countries, outpacing Sweden (22%), Norway (19%), and Denmark (16%).
“Finland had as early as 2016 already a country-level roadmap for circular economy, which has had a positive effect. It gave companies the signal to take this seriously and created an operational environment that set the stage—something other countries don’t have yet,” says Michael Hanf.
Measured strategies get done
Almost all companies claim to have integrated circularity to some extent in their business strategy. However, 42% have defined a target for at least one circular strategy and even less than a third measure performance and progress.
Ambitions and outlook apart, many companies feel stuck in linear business models. The most widely indicated obstacle is a perceived lack of demand: customers are not making circular requirements. Ironically, only a small fraction of companies indicates that they themselves present circular requirements to suppliers in all or most purchases. Worse, one-fifth of companies only set circular requirements in their purchases when customers or authorities demand it.
Circular transition gains momentum, but is not automatically sustainable
VTT has been conducting research on circular business models, and Michael Hanf points out that while circularity is essential for companies to develop, it is not synonymous with sustainability.
“We recently published a white paper on circular business models in Finland, and one of our key findings was that circular economy is not necessarily sustainable. You need to consider circularity from the point of view of sustainability, and you always need an ecosystem to make it work,” says Michael Hanf.
The main finding of the Nordic study is that more and more companies understand the power of circular strategies and are incorporating circular goals into their strategic agendas.
“The circular transition of business gains momentum. 79% of the companies believe that their competitors will develop significant circular capabilities within the coming years. If you want to future
About the report
Circular Economy Outlook 2024 explores to which extent public companies in Denmark, Finland, Norway and Sweden have integrated circular strategies into their business and operations. The study addresses 809 unique companies on the main lists (LargeCap, MidCap, SmallCap) at the stock exchanges in Copenhagen, Helsinki, Oslo, and Stockholm. 283 companies (35%) have responded to the survey and 64 companies (8%) have been interviewed. The total participation rate is 39%.
The study has been led by Cradlenet and RISE in a collaboration with Danish Technological Institute (DTI), Research Centers of Norway (NORCE), and Technical Research Centre of Finland (VTT).
The project is co-financed and supported by: Avfall Sweden (Swedish Waste Management), Foxway, Helsinki Circular Valley, Håll Sverige Rent, Industriens Fond, Nordic Circular Hotspot, Nordic Innovation, Ragn-Sells, RE:Source, Sirk Norge (Avfall Norge), Skanska Sweden, Södra Skogsägarna, Teknikföretagen (Technology Industries of Sweden) and Återvinningsindustrierna (Recycling Industries of Sweden).
Read the report here: Circular Economy Outlook 2024
