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ABB report finds 91 per cent of industrial firms affected by resource scarcity, prompting two-thirds to increase investment in circular solutions
A new report from engineering firm ABB Motion has found that nine-in-10 industrial businesses are feeling the effects of resource scarcity, prompting two-thirds to increase funding for circularity initiatives over the next three years.
The report, entitled Circularity: No Time to Waste, is based on a poll of more than 3,000 industrial decision-makers from 12 countries, including the US, China, India, UK, Sweden, Germany, and France. It found that more than a third are facing challenges securing raw materials, while 34 per cent are experiencing energy security concerns, and 32 per cent face labour shortages. A quarter also raised concerns over the impact on their business of electronic component shortages.
This widespread resource scarcity has led to increased costs for 37 per cent of companies, as well as supply chain disruption for 27 per cent of respondents, and slowdowns in production capacity for a quarter of industrial firms surveyed, the study added.
Moreover, despite energy being rated as one of the scarcest resources, two-fifths of surveyed businesses reported it as their biggest source of waste - flagging an urgent need for greater energy efficiency across industry.
The survey found that a majority of firms are responding to energy security risks by increasing investment in circular solutions that can improve resource and energy efficiency. But the report also highlighted a number of obstacles to investing in such solutions, including the lack of a clear definition for "circularity".
The report found that important circular practices have still only been adopted by a minority of businesses. For example, just 41 per cent of respondents had partnered with waste management companies to reduce waste levels while only 37 per cent said they had incorporated energy-efficient technology, and a third currently promote circular supply chain principles.
More encouragingly 67 per cent are using recycled materials in their products to some extent, while firms investing in circularity have registered measurable benefits including waste reduction and energy efficiency improvements.
Ultimately, 78 per cent of respondents agree the circular economy encourages innovation and drives competitiveness, with around three quarters of those quizzed also backing increased regulation and reporting requirements and more government support for those adopting circular business practices.
Tarak Mehta, president of ABB Motion, said the "pressing need" to transition to a circular economy has never been clearer.
"Our current way of life is depleting resources at an unsustainable rate, contributing to emissions and climate change," he said. "Embracing circularity is not only essential for safeguarding our environment but also for enhancing business resilience.
"This survey highlights the importance of taking a holistic approach, instilling responsibility at all levels of the organisation, and embracing new technologies and collaborations. While there are challenges to overcome, businesses that fully embrace circularity see significant benefits, from cost control to improved reputation. We must act now, to make circularity the norm in global industries. There is no time to waste."
The release of ABB's research coincides with a separate study claiming that "linear systems" for materials can cost businesses tens of thosands of pounds a year - with the bulk of the costs coming from the disposal of dry mixed recycling.
The report by recycling and resource management firm Bywaters claims that implementing more circular models and ensuring the correct segregation of recyclable materials at source can yield savings of approximately 70 per cent on waste disposal costs, equating to approximately £24,000 a year for the average firm.
John Glover Jr, managing director at Bywaters, said the findings clearly show how implementing a circular business model delivers both environmental and financial benefits.
"Moving away from a linear model to a circular model brings all sorts of savings on an annual basis, especially as you can literally reuse equipment that would otherwise be discarded or avoid waste that's expensive to remove and take to landfill," he said.
"Circular models are the future, and a necessity if we're going to put an end to the waste crisis and worsening plastic pollution. That's why we exist; we're here to help make this transition easier for businesses and bring waste levels and costs down. I hope that the findings from this analysis go some way to convincing businesses to take action on circularity."
The two studies follow the release of Deloitte and the Circle Economy Foundation's Circularity Gap Report 2024 earlier this week, which claimed the proportion of virgin materials consumed worldwide rose once again last year, in an ongoing trend that poses a huge threat to human health, biodiversity, and climate.
The study estimates the world has consumed more than 500 billion tonnes of materials - almost as much as throughout the entirety of the 20th century - over the past six years alone.
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