Circular economy take-up among publicly listed companies in Finland

Abstract

Economic development has long been prioritized over environmental and social sustainability, and the effects of that are now catching up to us in the forms of climate change, resource scarcity and pollution among others. It is now being increasingly recognized that our future economic competitiveness and resilience are also threatened, if drastic measures are not taken. This has sparked interest in the concept of circular economy, which revolves around "systematically designing out material leakage and disposal" in order to avoid losses of value and negative affects along the material chain (Ellen MacArthur Foundation, 2013). The main reason that countries and companies alike are turning to the concept in question is that besides environmental and social sustainability, it manifests substantial economic potential.

Circular economy now plays a crucial role in the development strategies of many major regions - most recently the European Union. Given Finland's membership in the Union as well as the Finnish Government's recently published circular economy initiative, research on the status of the concept on a national level is warranted.

This study assesses the take-up of the circular economy concept among the publicly listed companies in Finland. The final sample group includes 122 observations. The data was collected from Nasdaq Helsinki as well as annual and corporate responsibility reports of the publicly listed companies. Empirical analysis of the data includes descriptive and inferential statistics as well as content analysis. The aim of the study was to investigate what type of companies have begun to use the term "circular economy" and assess, if the companies in question engage in the inner loop activities of reuse, maintenance and remanufacturing.

The findings of this study suggest that companies who've taken up the concept of circular economy are typically large and operate in heavy industries. Particularly the Basic Materials industry was found to have a strong relationship with circular economy companies. In terms of circular economy activities, the companies mostly deal with raw material flows and waste management. This can be considered somewhat unsurprising, as the roots of the concept are in the aforementioned outer loop activities - at least in terms of implementation. Given that it is now widely recognized that inner loop activities such as reuse, maintenance and remanufacturing offer far more value, building awareness of them among the Finnish private sector should be a high priority for various stakeholders, but particularly the Finnish Government. If the objective of making Finland a top circular economy country by 2025 is to be achieved, the concept needs to be embraced more comprehensively.