30 June 2026

The circular economy as a strategic lever for business competitiveness

How circularity is transforming business models, reducing risk, and unlocking long-term value: key insights from the HSF Kramer (global law firm) and EIG webinar

1. From linear inefficiency to a new competitive paradigm

The circular economy has crossed a decisive threshold: it is no longer an environmental sustainability concept, but a strategic lever for business competitiveness.
This was highlighted by both Herbert Smith Freehills Kramer (HSF Kramer) and Eco Intelligent Growth (EIG) in their recent co-hosted webinar “Circular economy: from regulation to real business”, where they addressed both the economic value of circularity and its legal implications for companies.
In the European Union, approximately 90% of the economy still operates under a linear model. The consequences are twofold: massive waste generation and systematic value destruction.
According to Circle Economy, for every €3 of value created, nearly €1 is lost at the end of the product lifecycle — an economic haemorrhage no company can ignore.
Faced with this reality, the circular economy — as defined by the Ellen MacArthur Foundation — is not simply about recycling more. It is an industrial system designed to be restorative and regenerative, keeping products, components, and materials at their highest utility and value.
This model is based on three key principles:
  • Eliminate waste and pollution at the design stage — not as a downstream fix, but as a primary intention
  • Keep products and materials in use — through repair, reuse, remanufacturing and redistribution
  • Regenerate natural systems — preserving and restoring natural capital

👉 Key insight:Circularity begins at the product design stage: creating durable, repairable, modular, and recyclable goods. This is where the greatest lever for systemic transformation lies, up to 80% of a product’s environmental and economic impact is determined during the design phase. (source)


2. Economic value, risk reduction and strategic autonomy

Beyond environmental impact, circularity represents a major economic opportunity.
The current linear model generates material value losses that, at a global scale, amount to trillions of euros annually. Circular models enable companies to:
  • recover residual value
  • optimise resource use
  • reduce dependence on virgin raw materials
These materials are increasingly exposed to geopolitical risks and supply volatility.

For Europe in particular, circularity is also a lever for strategic autonomy: it reduces exposure to fragile supply chains and price volatility in global markets. As noted by Jannis Bille (HSF Kramer):

“Greater circularity really offers a way to improve supply security, retain value within Europe and reduce reliance on external producing regions.”
👉 HSF Kramer regularly advises businesses on navigating the legal and regulatory dimensions of this transition, from supply chain structuring to compliance with evolving EU frameworks.

3. Regulation and implementation: from obligation to operational reality

The EU is not waiting for companies to adapt voluntarily.
Since the 2020 Circular Economy Act (CEA), Brussels has been building a rapidly advancing regulatory framework, including:
  • packaging regulation
  • eco-design requirements
  • the right to repair
  • a single market for secondary materials
Today, companies face four simultaneous regulatory pressure vectors:
  • Design requirements: durability, repairability, material recoverability
  • Traceability: digital product passports across the lifecycle
  • Extended Producer Responsibility (EPR), with real costs linked to waste management
  • Market standards: harmonised recycling and reuse standards across the single market.

The goal is not only to reduce waste, but to create a competitive market for secondary materials that reduces Europe’s structural dependence on imported virgin resources.

Despite its benefits, the transition to a circular economy presents significant challenges:

  • regulatory complexity and fragmentation within the EU;
  • higher costs of recycled materials compared to virgin ones;
  • difficulties in scaling circular models;
  • lack of adequate infrastructure; and
  • technical barriers in recycling certain materials.

Additionally, many companies still perceive circularity as an obligation rather than a strategic opportunity.

From strategy to execution

Implementing the circular economy is not a statement of intent, it requires a method. The starting point is lifecycle assessment — identifying:

  • where value is lost
  • where waste is generated
  • where recyclability bottlenecks exist
Without this diagnosis, circular objectives remain theoretical.

Cradle to Cradle®: a methodology for redesign

Cradle to Cradle® (C2C) is the main source of inspiration for the circular economy. The Cradle to Cradle Certified® (C2C Certified) programme provides a proven operational framework for redesigning products based on systemic criteria.

It evaluates five dimensions:

  • material health
  • product circularity
  • renewable energy use
  • water stewardship
  • social fairness
👉 Key insight: It is not a marketing label, it is a verifiable and measurable redesign protocol that enables companies to demonstrate, with data, the level of circularity of their products.

Collaboration across the value chain

Collaboration across the value chain is not optional in this context. A manufacturer cannot close material loops if suppliers do not provide traceability, or if customers lack access to return channels.


4. REAL CASES: From pilots to competitive advantage

The webinar demonstrated that circularity is already operational and scalable. The cases presented show a consistent pattern:

  • C2C-Certified® fashion garments have been made with safe and fully recyclable materials, with no significant price difference compared to conventional products;
  • industrial textile recycling processes can transform post-consumer waste into next-generation technical fibres;
  • industrial symbiosis: waste from one production process have been re-integrated as raw material into another, turning a management cost into revenue; and
  • energy-efficient refurbishment in construction that reduces operational consumption from the first use phase.
The common pattern is not short-term cost reduction, but value model transformation:
  • reduced exposure to raw material volatility
  • lower waste management costs
  • greater ability to justify pricing to buyers demanding supply chain transparency.

Conclusion: an inevitable transformation

Adopting the circular economy enables companies to:
  • reduce risks related to resource scarcity;
  • create new revenue streams;
  • optimise costs in the long term;
  • improve regulatory compliance;
  • differentiate themselves in the market; and
  • increase resilience to crises.
Companies adopt circularity not only out of environmental conviction, but because it:
  • reduces supply chain exposure
  • generates new revenue from recovered materials and lifecycle services
  • lowers operational costs within three to five years
  • anticipates regulatory compliance
  • opens access to corporate clients and public tenders that already require circular criteria as an entry condition.

👉 The circular economy will not emerge on its own, nor will it be painless. However, regulatory frameworks, market signals, and supply chains are already reorganising around it.Companies that approach it only as a regulatory requirement risk falling behind. In contrast, those that integrate it into their strategy will be able to lead the transition and position themselves as benchmarks in their sectors.

👉 Learn more by watching the webinar recording

 


About HSF Kramer

HSF Kramer has a market-leading Band 1 ranked ESG practice with more than 30 years of experience. The firm advises multinational companies on the full spectrum of circular economy legal issues, including regulatory compliance, green claims, and greenwashing risk.

About Eco Intelligent Growth (EIG)

Eco Intelligent Growth (EIG), part of Grupo Construcía, is a consultancy specialised in circular economy and innovation. Its three core service areas are business transformation, built environment, and circular products.

EIG acts not only as a strategic advisor but as an operational partner, supporting companies in achieving Cradle to Cradle Certified® certification — as an accredited assessor — and enabling the transition towards verifiable circular business models.x