Circular on paper, linear in practice

By Larissa Ogera D’Otaviano

The circular economy is one of the most elegant ideas sustainability thinking has produced. Instead of extract, use, and dispose, it proposes a continuous cycle: materials that return, energy that renews, and waste that ceases to exist as such.

It is such a coherent idea that it is almost difficult to disagree with it. And that is exactly where the problem lies.

When an idea is too good to be questioned, it risks becoming rhetorical consensus—widely cited, rarely practiced. Circularity has reached this point in many organizations: it is in the narrative, in the strategy, and in the reports. But when budgets tighten, it quietly moves into a parallel column: important, but not urgent; desirable, but not a priority. Circularity does not fail due to lack of intention. It fails due to excess friction.

What theory doesn’t tell you

In theory, the circular cycle is simple: the used material returns to the process, replaces virgin material, and reduces impact. In practice, each step in this cycle carries costs that theory does not detail.

Collecting post-consumer material requires reverse logistics infrastructure, collection points, transportation, and sorting. Reprocessing that material requires energy, equipment, and much stricter quality control than working with virgin material, which arrives standardized and predictable. Incorporating recycled content into the final product may require formulation adjustments, new tests, regulatory approvals, and sometimes accepting variations in color or mechanical properties that customers must approve.

Each of these steps has a real, measurable cost that appears in the spreadsheet before any environmental benefit appears in the report.

The logic of the parallel column

Within organizations, there is a well-known management phenomenon: initiatives without clear ownership tend to be indefinitely postponed. Circularity, in many companies, exists exactly in this limbo.

It appears in strategy as a pillar. But when resources are allocated, it competes with goals that have numbers, deadlines, owners, and direct consequences for performance evaluation. In this game, circularity almost always loses—not because no one believes in it, but because internal incentives have not been redesigned to make it inevitable.

The result is what could be called a parallel strategy: circularity exists in planning, but operates on a separate track from real operations. In good years, it advances. In times of pressure, it pauses. It is never canceled—that would be politically costly—but it is never central enough to survive budget cuts unscathed. An initiative that can be paused without immediate operational consequences was never truly integrated.

Cost as argument—and as excuse

There is an honest tension at the center of this discussion, and it must be acknowledged.

The higher cost of recycled material compared to virgin material is real, especially when oil prices drop. It is not perception or cultural resistance—it is a structural economic reality driven by immature markets, insufficient infrastructure, and a value chain that has not yet reached scale. Ignoring this would be naïve.

But cost can also become a comfort narrative—a justification that renews itself every budget cycle, expanding when markets tighten and shrinking when ESG pressure increases. When this happens, cost stops being a constraint and becomes a choice disguised as one.

The difference is subtle but critical: in one case, the company is genuinely trying to make circularity viable within its constraints; in the other, it is using those constraints as an excuse not to try.

What makes it work in practice

Companies that have made circularity operational—not just strategic—share some common traits.

They internalized cost as an investment with a defined horizon. Instead of comparing recycled material to virgin material today, they modeled the long-term cost of dependence on virgin inputs, including regulatory risk, price volatility, and reputation with customers and investors.

They redesigned internal incentives. Circular targets were tied to real performance indicators and included in management evaluation. Circularity stopped being the responsibility of sustainability teams alone and became a decision criterion in procurement, product, and operations.

They built the supply chain before they needed it. They invested in recycled material suppliers, certification, and traceability—not when regulation required it, but earlier, when there was still room to learn.

Circularity is difficult not because it is a flawed idea, but because it requires organizations to change before the market forces them to. And changing early costs more—at least in the short and medium term.

The real question companies must answer is not whether they believe in circularity, but whether they are willing to pay the price to truly integrate it—or prefer to keep it comfortably in the parallel column, where it neither disrupts nor transforms.

Being circular on paper is easy. Being circular in operations is a costly choice—and one that reveals how real the commitment actually is.

*Larissa Ogera D’Otaviano is Sustainability Director at Valgroup, with over 8 years of experience in circular economy and decarbonization. A chemical engineer from USP, with an MBA and postgraduate studies in ESG, she leads strategic initiatives in recycling, LCA, and carbon management in the packaging industry. Instagram | LinkedIn

**This text was automatically translated with the help of artificial intelligence and reviewed. Still, there may be slight differences compared to the original version in Portuguese.