Jamie Butterworth, Partner at Circularity Capital, discusses the growing corporate demand for digital solutions which can unlock the commercial advantages of the circular economy at scale.

Solutions like Circularity investee Trustrace bring a new level of insight into the ability to improve the sustainability of corporate supply chains

In the ongoing push for efficiency and productivity, companies are increasingly turning to data and software driven insights. This doesn’t just serve the purpose of closed system efficiency, but is an enabler of what we believe is the next frontier; the transition to more sustainable, circular economy.

The digitisation of product and supply chain infomation is driving significant commercial advantages for business. We are are also now in a rapidly evolving regulatory environment with increasing focus on ‘social licence to operate’, where corporates are increasingly incentivised to provide governments, shareholders, employees and consumers with accurate and timely information about their emissions and supply chain sustainability[1].

Aside from greenhouse gas emissions, supply chains are increasingly under scruitiny for their wider impacts on people, the environment and the economy. Companies are increasinly looking to implement and report on a variety of measures to improve supply chain resilience and sustainability, with the traceability of material, inventory auditing, environment impact assessments, fair treatment of workers, waste management, and energy and water consumption all needing to be tracked and reported on.

This is where the benefit of sound data management lies. With such vast streams of sustainability information available, corporates need a way to aggregate and evaluate data to fully unlock its full potential.

A digital-first approach

A growing number of technology solutions are making it easier to collect, sort and analyse data faster [2]. It’s only with the data consistency and transparency offered by these services that business will be able to effectively execute the transition from today’s linear, carbon intensive, take-make-dispose methods of production and consumption and into a more sustainable, circular economy model.

And this is a viewpoint increasingly shared amongst business leaders. The Tomson Reuters Institute found that 71% of C-suite and functional leaders anticipate a growing significance of sustainability in business performance, and the use of digital solutions to provide fresh insights was found to be one of three main priorities for businesses, the other two being AI and global regulations.

At Circularity, we have invested in several companies that leverage data insights to drive positive commericial and environmental outcomes.

- Trustrace provides a SaaS solution for leading brands in the fashion and textiles industry like Adidas to enable the traceability of products; from sourced material to finished product.

- Winnow provides AI technology for commercial kitchens to half food waste by measuring waste streams and drive optimisation in procurement.

- CEMAsys provides SaaS and consultancy services to provide companies with a granular understanding of their carbon and waste footprints and insights into how to optimise and reduce.

Growth-stage capital funding

When we founded Circularity Capital in 2015, we did so with the firm conviction that the entrepreneurs of businesses like Trustrace, Winnow and CEMAsys, who are developing the data-driven innovations to make the circular transition a reality, deserve a specialist investor with the right knowledge and network to unlock their full potential. While there is significant VC funding available, there is limited access to growth equity to help take these business to the next level.

We have worked hard to develop a firm with the right capabilities to make this a reality and are currently deploying our second dedicated circular economy private growth-equity fund – it is the largest of its kind globally. Our portfolio already includes a diverse range of leading circular businesses across Europe, but our ambition is to further grow this investment base by supporting leading, innovative, circular businesses where we can add value as a domain expert investor.

It’s clear to see that the circular economy provides a strong framework for decoupling business growth from resource constraints, enhancing resource productivity and driving competitive advantage. It also highlights a subset of business models which are enabling this transition and can generate premium returns for investors. Indeed, circular economy thinking will drive industry for years to come.

The supply chain is set to experience rapid change over the coming years. At Circularity Capital, we’re looking forward to playing a leading role in the transition towards a more resource-efficient future utilising the power of data.

[1] https://www.virginmediao2business.co.uk/sustainability/esg-survey-results/

[2] https://www.newscientist.com/article/2376512-deepmind-ais-new-way-to-sort-objects-could-speed-up-global-computing/

Accelerating the circular economy through DATA