Foreword We are experiencing a transformation of business models as many linear models1 reach their limits and manufacturers and value-chain partners turn to circular solutions to improve sustainability, resilience, revenues and costs. Linear business models are increasingly challenged by shortages of inputs, global disruptions and the triple planetary crisis.2 While linear business models are unlikely to disappear, new circular ones are emerging. The need for transformative change has never been more pressing and the market will favour those who embrace change and new sources of value. Circularity offers a path forward. In a circular economy, products and materials are kept in circulation, resource extraction is slowed down, and economic growth is decoupled from resource consumption.3 Circularity allows businesses to increase their resilience – the ability to prepare, respond to and recover from disruptions – and reach new markets and customers, while reducing the impact of climate change, resource tensions and environmental degradation. The shift towards a circular economy requires the participation of a diverse set of stakeholders, and accelerating momentum at the business level is vital to transform the entire system. While many of the capabilities needed for circular transformation are available today, a change in mindset is needed to transition from linear to circular business models. Jenny Davis-Peccoud Senior Partner; Founder Sustainability Practice, Bain & Company Hernan Saenz Senior Partner; Global Head, Performance Improvement Practice, Bain & Company Fernando J. Gómez Head, Resource Systems and Resilience; Member of the Executive Committee, World Economic Forum Jagjit Singh Srai Director, Research; Head, Centre for International Manufacturing, Institute for Manufacturing, University of Cambridge Kyriakos Triantafyllidis Head of Growth and Strategy, Centre for Advanced Manufacturing and Supply Chains, World Economic Forum Circular Transformation of Industries: Unlocking Economic ValueJanuary 2025 Circular Transformation of Industries: Unlocking Economic Value 3

Circular Transformation of Industries 2025