“The circular economy is just rhetoric unless it is put into practice.”

By Cristina Vázquez, CEO of TEIMAS

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Companies understand what circularity means. Regulators have established increasingly demanding regulatory frameworks. Investors are incorporating ESG metrics into their decision-making. Citizens are demanding greater transparency and accountability.

The problem lies elsewhere.

We are still failing to transform the linear economy at the pace required by today’s circumstances.

The figures are striking.

The Circularity Gap Report 2026 estimates that the global economy loses €25.4 trillion in avoidable economic value every year due to linear practices. That is equivalent to almost 31% of global GDP. Put differently, for every three euros of economic value we generate, one is lost through inefficiencies, waste, underutilised assets and resource depletion.

This figure represents not only a clear waste of materials, but also a loss of competitiveness, greater exposure to risk and an erosion of economic resilience.

The report identifies five major sources of value loss: inefficiencies in industrial processes, energy losses, food waste, end-of-life waste, and the premature deterioration of assets and infrastructure. Energy losses alone account for €8.7 trillion annually, while end-of-life waste represents a further €10 trillion.

This leads us to a clear conclusion: linearity is environmentally unsustainable and profoundly economically inefficient.

At the same time, the Global Risks Report 2026 published by the World Economic Forum highlights that we are entering a decade defined by geoeconomic competition, fragmented supply chains and increasing pressure on strategic resources.

The report identifies geoeconomic confrontation as the most significant global short-term risk and warns that environmental degradation, resource scarcity and social polarisation will intensify over the next ten years.

These are not theoretical risks. They are already affecting businesses today.

Dependence on critical raw materials, energy price volatility, regulatory constraints and vulnerable global supply chains are now real operational challenges. In this context, circularity becomes a risk mitigation strategy.

The key question, therefore, is why progress remains so slow.

Part of the answer lies in how the conversation has been framed over the years. We have communicated the circular economy as an aspirational narrative when, in reality, it is an operational discipline.

Circularity is not achieved through public statements or corporate reports. It is achieved by redesigning processes, integrating traceability, measuring material flows, digitising waste management and making data-driven decisions.

Circularity does not happen because a company claims to be circular. It happens when that company knows exactly which materials it uses, where they end up, how much value is being lost and how that value can be recovered.

This is where technology and execution become decisive.

What cannot be measured cannot be managed. Equally, the loop cannot be closed without reliable information, interoperability and analytical capability. The circular transition requires digital infrastructures capable of connecting operations, regulation and sustainability in real time.

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True circularity happens both before and after waste.

The next decade will therefore distinguish between organisations capable of executing circular business models and those unable to adapt to a resource-constrained world.

Companies that embed circularity into their operational decision-making will be more resilient to price volatility, less dependent on virgin raw materials, better protected from regulatory risks and better positioned to access financing and investment.

Across Europe, regulation is moving towards models based on extended producer responsibility, traceability, mandatory reporting and advanced resource management. Yet regulatory compliance alone is not enough, because compliance is not transformation.

Real transformation requires business leaders willing to move from narrative to execution. Today’s reality demands that we translate the circular economy promoted in communications campaigns into a new industrial logic.

And the sooner we understand this, the sooner we can turn a resource crisis into an opportunity for competitiveness and regeneration.

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