Why are companies moving to a circular economy?

Why are companies moving to a circular economy?
A . allows companies to develop new environmental regulations
B . helps mitigate risks and increase supply chain resilience
C . saves time when ordering products on autorenewal
D . represents a small monetary opportunity

View Answer

Answer: B

Explanation:

Companies are moving to a circular economy because it helps mitigate risks and increase supply chain resilience. In a circular economy, companies reduce dependence on raw materials by reusing, recycling, and remanufacturing products, which helps them buffer against supply chain disruptions caused by resource scarcity, price volatility, or geopolitical issues. By keeping materials in use longer and reducing waste, companies also lessen their environmental impact and build more resilient, sustainable business models.

This transition not only decreases environmental risks but also promotes innovation in product design, enhances resource efficiency, and reduces overall production costs. As companies face increasing pressure to align with sustainability regulations and customer demand for greener products, adopting a circular economy becomes a crucial strategy for risk management and operational continuity.

Environmental Sustainability References:

Ellen MacArthur Foundation. (2020). Circular Economy in Business: Risk Mitigation and Resilience. World Economic Forum. (2021). Building Resilient Supply Chains Through Circular Economy Practices. McKinsey & Company. (2020). The Business Case for a Circular Economy: Risk Reduction and Competitive Advantage.