Circular economy

We help clients improve the way they use and reuse natural resources to create value while safeguarding the environment.

Old industrial models of “take, make, dispose” are giving way to new thinking about the circular economy. This profound shift brings opportunities for organizations to create value and safeguard the environment by improving their management of resources, eliminating waste through better design, and maximizing the circulation of products, components, and materials in use.

We support governments, industries, and companies in integrating circular-economy principles into their strategies to support sustainable growth. For governments, implementing circular approaches can boost employment and citizen well-being, reduce resource dependencies, and limit environmental impacts. For businesses, reimagining products, packaging, services, and experiences can bring benefits to makers and users as well as the wider world.

We also help companies implement circular economy principles, professionalize the necessary processes, and skill up teams and managers accordingly.

Examples of our work

Circular economy
We have supported our clients on projects involving aspects of the circular economy, including the following:

Developing sustainable materials for consumer goods

Helping a consumer company to articulate an ambitious but actionable 2030 strategy, set up a world-class research facility for sustainable materials, and develop a plan to earn stakeholder trust while maintaining brand reputation

Finding alternatives to plastics packaging

Advising a multinational food company on the sustainability, cost, supply-and-demand dynamics, and recycling potential of alternatives to plastics and identifying up to €200 million in annual savings from the use of more sustainable materials

Exploring the benefits of a national circular economy

Analyzing how a European country could make the transition to a circular economy to boost competitiveness and economic growth, and pursue opportunities worth €1.5 billion to €2.5 billion

Featured Insights

Article

No time to waste: What plastics recycling could offer

– Plastics waste is hurting the chemical industry as well as the environment. By taking the lead on recycling, chemical players could add a new dimension to the industry and help solve the problem.
Article

A new textiles economy: Redesigning fashion’s future

– The clothing industry’s take-make-dispose model has large economic, environmental, and social costs. A transformation based... on circular-economy principles could lead to better outcomes.
Article - McKinsey Quarterly

Mapping the benefits of a circular economy

– Most European industries can improve financial performance with specific actions to reconfigure product lifecycles.
Article

Developing products for a circular economy

– Cross-functional collaboration and customer-focused design thinking can help companies reap more value from the energy and resources... they use.
Article

Starting at the source: Sustainability in supply chains

– By working closely with their suppliers, consumer companies can lessen their environmental and social impact and position themselves... for strong growth.
Issue

The circular economy: Moving from theory to practice

– A special collection of articles about the transition taking place as companies use circular-economy concepts to capture more... value from resources and to provide customers with better experiences.
Book

Unlocking Industrial Resource Productivity: 5 Core Beliefs to Increase Profits through Energy, Material, and Water Efficiency

– This book explains how companies can adopt new ways of thinking to transform their operations for greater efficiency.
Article

Rethinking the future of plastics

– A new report finds that applying circular-economy principles could dramatically reshape the economics of this workhorse of the... global economy—and help the environment.
Article

Stemming the tide: Land-based strategies for a plastic-free ocean

– Ocean Conservancy and the McKinsey Center for Business and Environment led a comprehensive effort to analyze where the majority... of ocean plastic comes from and how it leaks into the ocean, examine leakage pathways in different regions, and investigate potential plastic waste reduction solutions and the economics of each.
Report

Growth within: A circular economy vision for a competitive Europe

– This report offers a vision for a circular economy in Europe, and argues that it is an inherently attractive alternative to our... current “linear” development path, finding positive employment effects—0.6 percent additional annual growth, and 48 percent reduction of CO2 emissions by 2030.

Featured Capabilities

McKinsey invests heavily in developing proprietary tools, databases, and methods:

Plastics Waste Model

A complete and granular overview of plastic-waste flows across geographies, collection and treatment routes, and final destinations to inform policy makers, technology companies, and private equity firms.

Plastics Recycling Model

Scenario-based analysis of the economics and environmental benefits of key recycling technologies, per resin, to support decision making for petrochemical players, waste operators, and other potential investors.

Circular Economy Academy

A field and forum–based training giving clients practical insights into how to build their capabilities and run circular-economy projects.

RESOLVEr

A tool to help clients identify, quantify, and prioritize strategic circular-economy opportunities, with a particular focus on revenue growth.

McKinsey Design

Adopting design thinking to deliver utility for consumers and companies based on products, services, and experiences that are better fit for purpose and come with a smaller end-to-end resource footprint.

Featured Solution

Energy Insights

A source of analytics, market insights, and performance benchmarking to help businesses and investors manage uncertainty and make effective decisions