Is 2026 The Year Circularity Finally Breaks Through?
Circularity has long sat at the edges of corporate sustainability – logical, useful, but rarely prioritized. While it hasn’t yet managed to break through to the mainstream, several shifts suggest the conditions will be different in 2026.
First, sustainability has shifted from narrative to ROI.
By late 2025, sustainability discussions have become centred on measurable value. Circularity fits this shift. Designing for durability, reuse and material efficiency offers a rare combination of reduced operational costs over the product life cycle, lower consumer costs through longer-lasting products, and decreased environmental impact. As scrutiny over sustainability budgets grows, circularity provides one of the clearest investment cases. In many ways, product sustainability can become the entry point to wider business sustainability.
Second, circularity aligns with broader transformation agendas.
As digital, operational and energy-related transformation efforts gain momentum, they are creating more pathways to integrate circular design. Packaging, material efficiency and operating-model initiatives are gradually aligning with these broader programmes, allowing circularity to move from a standalone sustainability effort into an integrated aspect of core efficiency and optimization agendas.
Third, supply chain volatility has made resource efficiency a strategic priority.
Geopolitical uncertainty and shifting tariffs have pushed firms to re-evaluate supply chain exposure (see Strategic Focus: Mitigating ESG And Sustainability Risk In The Supply Chain). Circular supply chains – those that reclaim or reuse materials – reduce reliance on constrained inputs and unpredictable commodities. Critical minerals are an obvious example: as countries tighten export controls on lithium, nickel and rare earths, firms that can instead reclaim these materials internally will gain a structural advantage.
Fourth, regulation is accelerating circularity.
The policy landscape now promotes circularity, both directly and indirectly. Regulations such as the EU Ecodesign for Sustainable Products Regulation (ESPR), the Packaging and Packaging Waste Regulation (PPWR), and California’s SB 707 (for which implementation is underway) introduce explicit requirements for durability, reparability, recycled content and end-of-life systems. At the same time, lifecycle analysis, digital product passports and disclosure obligations makes material flows more visible, reinforcing the economic rationale for circular design.
The EU Circular Economy Act (CEA), expected to enter into force in 2026, strengthens this trajectory. Despite broader adjustments to sustainability regulations through the Omnibus Proposal under the Competitiveness Compass review, the CEA has retained institutional support, as the review reinforced the EU’s ambition to lead in circularity by 2030. Momentum is also emerging globally: from Australia’s Circular Economy Framework, which sets national direction, to the WBCSD’s Global Circularity Protocol, which provides common metrics and guidance.
Together, these measures shape both the design of products and the analytical capabilities businesses must build, driving sustained investment in circular practices.
Last, AI and robotics are lowering practical barriers.
Historically, circularity has been limited by operational complexity, requiring granular material visibility, sophisticated end-of-life pathways and precise operations. New technologies are easing these constraints:
- AI improves material tracing, product-level carbon modelling and LCA automation.
- Robotics enable high-precision sorting, disassembly and remanufacturing at scale.
- Generative design tools incorporate durability and circularity criteria from the outset.
As these technologies mature, circularity shifts firmly from an operational burden to an innovation driver.
Taken together, these trends point to a turning point.
Circularity now intersects with dominant business priorities – resilience, efficiency, digital transformation, compliance and innovation – which are increasingly shaping how sustainability itself is evaluated. If earlier years were about signalling intent, 2026 may just be the year circularity becomes execution.
For insights on how to make your business more circular, please read:
If you are interested in what else might happen in the world of sustainability in 2026, tune in to our Sustainability Predictions Webinar.
About The Author
Priyanka Bawa
Senior Analyst
