McKinsey Reports Global Material Circularity Has Shrunk 10%

McKinsey & WEF celebrate Schneider Electric, Holcim and Interface’s sustainable circularity solutions as ingenious ‘Circularity Lighthouses’

McKinsey reports that for every person in Europe, more than two metric tons of materials such as metals, cement, plastics, and wood are used per year. The impact of materials on our lived environment and climate health can’t be understated — materials usage contributes around one-third of total CO2 emissions globally, which is more than six times the emissions of Switzerland over the past 50 years.

As companies around the world work to reduce their environmental impact and boost sustainability materials, circularity is crucial, however the global consultancy giant has found that materials circularity has shrunk by more than 10%, from 31% in 2018 to 20% in 2023.

This decrease is due to a range of factors leading to the increase of extraction rates and material use including increased waste streams from rapid urbanisation and growing populations.

“Our analysis shows that circularity in the built environment is a critical pathway towards reducing carbon emissions and creating value,” says Fernando Gomez, Head of Resource Systems and Resilience and Executive Committee Member at the World Economic Forum.

The World Economic Forum Annual Meeting 2024 highlights circularity

The 54th World Economic Forum Annual Meeting in Davos, Switzerland saw major organisations, over 100 governments, thousands of Forum partners, and individuals focussing on the fundamental principles driving trust, including transparency, consistency and accountability.

At the event, McKinsey hosted a panel discussion titled ‘Transitioning from trials to triumphs in building materials circularity’, which featured participants across the built environment value chain, including major global construction and real estate companies, and highlighted three key themes: 

  • The clear opportunity for environmental impact and a business case for circularity in the built environment
  • The critical importance of value chain integration and digitalisation
  • The urgency to scale and invest in new circular business models.

The company partnered with WEF to find industry-leading solutions to enable the shift towards circularity and serve as aspirational models that can inspire others to follow suit, or Circularity Lighthouses, as they are being coined. The three solutions heralded so far are: 

  • Schneider Electric’s end-to-end circularity solution.
  • Holcim’s global recycling platform
  • Interface’s circular supply chain for the global production of carpet tiles

“Circular business models offer compelling sustainability and commercial benefits,” shares Peter Herweck, Schneider Electric’s Chief Executive Officer. 

Schneider Electric was awarded the most sustainable company 2023 by Sustainability Magazine, which featured talks from Schneider Electric and Holcim at Sustainability LIVE 2023. 

“We look forward to the opportunities this new Circularity Lighthouse network offers to learn, share, and accelerate action.”

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