Sustainability Atlas
Circular Economy·17 min read··...

Interview: the builder's playbook for Circular procurement & buyer requirements — hard-earned lessons

A practitioner conversation: what surprised them, what failed, and what they'd do differently. Focus on data quality, standards alignment, and how to avoid measurement theater.

Seventy percent of companies cite lack of available supplier data as their most significant barrier to circular procurement, according to a 2024 MIT survey of 1,200 sustainability professionals across 97 countries. Yet the global circular economy market reached $656 billion in 2024 and is projected to grow to $2.66 trillion by 2035 at a 13.57% CAGR. The gap between ambition and execution reveals a fundamental challenge: procurement teams are being asked to transform supply chains with incomplete data, misaligned standards, and suppliers who often lack the capacity to measure their own circularity performance.

We spoke with practitioners across procurement, sustainability, and supply chain operations in emerging markets to understand what separates genuine circular transformation from measurement theater. Their lessons reveal that success depends less on sophisticated metrics and more on building supplier relationships, investing in data infrastructure, and accepting that imperfect data today is better than perfect data never.

Why It Matters

Circular procurement sits at the nexus of three converging pressures. First, regulatory mandates are accelerating: the EU Circular Economy Act consultation runs through November 2025 and will create binding requirements for circular public procurement. The EU's Carbon Border Adjustment Mechanism (CBAM), effective Q3 2024, now requires 80% of emissions calculations for complex goods to be based on actual supplier data rather than estimates. Second, investor scrutiny is intensifying—78% of institutional investors now consider circular economy metrics when evaluating companies, according to 2024 market research. Third, operational economics favour circularity: companies implementing circular procurement achieve 15-35% raw material cost savings while reducing supply chain vulnerability to commodity price volatility.

For sustainability leads in emerging markets, these pressures arrive with a twist. The International Finance Corporation has invested $1.9 billion in circular solutions in emerging markets since 2015 and mobilized an additional $500 million for projects spanning design, production, and value recovery. Asia-Pacific is the fastest-growing circular economy region at 13.12% CAGR through 2029. China's resource recycling sector alone processed 401 million metric tonnes of materials valued at $187 billion in 2024, with over 260,000 enterprises participating. Yet financing gaps remain acute—the EU alone requires €55 billion annually in circular investment, with emerging economy gaps far larger.

The practitioners we interviewed emphasized that circular procurement in emerging markets requires adapting frameworks designed for European and North American contexts. Infrastructure gaps, supplier capacity constraints, and different regulatory trajectories demand tailored approaches. As one procurement director at a South African manufacturing conglomerate put it: "We cannot wait for ISO certification before we start. We must build circular capacity while simultaneously measuring it."

Key Concepts

Understanding circular procurement requires distinguishing between related but distinct activities. Circular procurement focuses on purchasing products and services designed for reuse, longevity, and minimal waste—optimizing what is bought and how. Circular sourcing involves using renewable or recovered materials at the start of production. Both are strategic levers, but procurement offers immediate leverage through buyer requirements.

The ISO 59000 series, released in May 2024, provides the first global framework for implementing and measuring circular economy practices. ISO 59004:2024 establishes vocabulary, principles, and implementation guidance including circular procurement specifically. ISO 59010:2024 addresses business models and value networks. ISO 59020:2024 covers measuring and assessing circularity performance—the metrics and KPIs that procurement teams must track.

ISO 59004 defines six foundational principles: systemic thinking, sustainable resource management, value creation and sharing, systemic resilience, resource traceability, and continuous improvement. For procurement teams, the standard organizes actions into three categories. Creating and recovering value includes circular sourcing, design for circularity, and process optimization. Retaining value encompasses reuse, repair, maintenance programs, and product-as-a-service models. Closing loops involves reverse logistics, cascading materials, recycling systems, and waste-to-energy recovery.

Scope 3 emissions—indirect emissions across the value chain—represent the measurement challenge that defines circular procurement. Eighty-three percent of companies struggle to access accurate emissions data according to GHG Protocol research. The distinction between spend-based estimations (using financial data and average emission factors) and supplier-specific data (actual measurements from individual suppliers) determines whether circularity claims represent genuine performance or measurement theater.

Life Cycle Assessment (LCA) provides the methodological foundation for evaluating circular interventions. Environmental Product Declarations (EPDs), which quantify environmental impacts across a product's life cycle, are increasingly required for public tenders. The challenge in emerging markets is that many suppliers lack the technical capacity to produce EPDs, forcing procurement teams to choose between excluding capable suppliers or accepting less rigorous data.

What's Working

Phased Supplier Engagement Programs

The most successful circular procurement transformations begin with high-impact categories and tier-1 suppliers representing 70-80% of spend before expanding to broader portfolios. Unilever's Sustainable Living Plan pioneered this approach, and practitioners in emerging markets are adapting it to local contexts.

A procurement lead at a Brazilian consumer goods manufacturer described their phased approach: "We started with packaging suppliers—our largest material spend category. Rather than demanding ISO 59020 compliance immediately, we provided training on basic circularity measurement. We covered the cost of initial assessments for our top 20 suppliers. Eighteen months later, they're providing quarterly data that enables genuine LCA calculations."

This investment-forward model—where buyers fund supplier capacity building—addresses the fundamental constraint that many emerging market suppliers lack resources for compliance infrastructure. The manufacturer reported that supplier participation in data sharing increased from 15% to 67% after implementing funded training programs.

Product-as-a-Service Contract Structures

Traditional procurement optimizes for lowest unit cost; circular procurement optimizes for total cost of ownership across multiple use cycles. Product-as-a-Service (PaaS) models align incentives by shifting from ownership transfer to performance contracts.

Philips' lighting-as-a-service model has been adapted across emerging markets. In India, a facilities management company transitioned from purchasing LED fixtures to paying per lumen-hour delivered. The contract includes manufacturer take-back obligations, repair services, and end-of-life material recovery. The company's procurement director noted: "We reduced lighting costs by 28% while eliminating disposal liabilities. But the real value was operational—the manufacturer now has incentive to maximize fixture lifespan rather than selling replacements."

Riga, Latvia provides a public sector example. The city's Circular Economy Hub procurement prioritized reuse and second-hand furniture for interior design, demonstrating that circular criteria can function within standard public procurement frameworks without requiring regulatory changes.

Digital Traceability Systems

Material traceability—tracking resources through value chains—enables the verification that distinguishes genuine circularity from greenwashing. Digital circularity solutions are growing at 24.3% annually as companies recognize that paper-based documentation cannot provide the granularity required for Scope 3 reporting.

In Kenya, a mobile phone refurbishment operation implemented blockchain-based tracking for device components. Each phone carries a digital passport recording original manufacture, repair history, component replacements, and material composition. This traceability enabled the company to provide verifiable recycled content claims that unlocked premium pricing in European export markets. "The system cost $340,000 to implement," the operations manager explained. "We recovered that investment in eight months through access to markets that require documented circularity credentials."

The European Investment Bank's October 2025 guide on Circular Public Procurement in Cities documents 43 case studies demonstrating similar approaches across municipal procurement.

What's Not Working

Survey-Based Data Collection at Scale

Many companies attempt Scope 3 and circularity measurement through supplier surveys. The results have been disappointing. Response rates often fall below 25%, and returned data frequently contains inconsistencies that require manual verification. "Survey fatigue" has become a recognized phenomenon—suppliers receiving sustainability questionnaires from multiple customers with different formats and requirements.

A sustainability manager at a Vietnamese textile manufacturer described the frustration: "We sent circularity assessment surveys to 340 suppliers. We received 89 responses. Of those, only 31 contained usable data. The rest had obvious errors—recycled content percentages that exceeded total material inputs, or emission figures that were clearly copied from industry averages without actual measurement."

The solution emerging from practitioner experience is to move beyond surveys toward continuous data integration. Rather than annual questionnaires, leading companies are requiring that circularity data flow through the same systems used for ordering and payment. When suppliers must input material composition data to generate invoices, completion rates approach 100%.

Spend-Based Estimations as Permanent Solutions

Spend-based emissions calculations—multiplying procurement spending by average emission factors—provide a starting point for Scope 3 measurement. However, 70% of MIT survey respondents identified supplier data availability as their primary challenge, and only 15% of companies now rely solely on spend-based methods, down from 30% in 2024. The direction is clear: spend-based estimations are acceptable as baselines but insufficient for demonstrating genuine circularity improvements.

"We spent two years optimizing based on spend data," recounted a procurement director at an Indonesian palm oil processor. "We thought we were reducing emissions by selecting lower-cost suppliers. Then we got actual measurement data and discovered our 'sustainable' suppliers had worse environmental performance than the alternatives—they were simply cheaper because they externalized environmental costs. Spend-based data can actively mislead."

The EU CBAM requirement that 80% of complex goods emissions come from actual supplier data signals the regulatory direction. Procurement teams relying on estimations face increasing compliance risk.

Waiting for Perfect Standards

Several practitioners described delayed circular procurement initiatives while waiting for ISO 59000 adoption, regulatory clarity, or industry-specific guidance. This approach has proven counterproductive.

"We benchmarked against European companies and concluded we couldn't start until our suppliers achieved ISO 59004 alignment," explained a sustainability lead at an Egyptian manufacturing company. "Two years later, we had no circular procurement program, our European competitors had built supplier relationships and data infrastructure, and the competitive gap had widened rather than closed."

The emerging consensus is that directional accuracy matters more than precision in early-stage circular procurement. Companies that establish supplier engagement programs, even with imperfect measurement, develop relationships and data infrastructure that enable more sophisticated assessment over time. Waiting for perfect standards produces neither circularity nor measurement capability.

Key Players

Established Leaders

Veolia Environnement — Global leader in waste management and circular economy services operating across 48 countries. Manages 46 million tonnes of waste annually with increasing focus on material recovery and remanufacturing services. Particularly strong presence in emerging markets through municipal partnerships.

IKEA — Pioneering circular procurement in furniture through take-back programs, spare parts availability, and increasing recycled material content. Committed to using only renewable or recycled materials by 2030. Their supplier capacity-building programs offer templates for emerging market adaptation.

Suez Group — Water and waste management services with circular economy expertise spanning resource recovery, recycling infrastructure, and industrial symbiosis. Strong emerging market operations in Asia, Africa, and Latin America.

Dell Technologies — Reconnect program has recovered over 2.5 billion pounds of electronics. Leads in closed-loop recycled plastics for manufacturing—demonstrating circular procurement from the buyer side through materials specifications.

Emerging Startups

Circulor — Blockchain-based supply chain traceability platform enabling verification of recycled content and responsible sourcing claims. Active in battery minerals, plastics, and electronics sectors.

Rheaply — Asset exchange platform enabling organizations to reuse existing resources rather than procuring new. Addresses the "what we already have" challenge that traditional procurement ignores.

Grover — Consumer electronics subscription service demonstrating product-as-a-service at scale. Refurbishment operations prove circular business models can achieve cost competitiveness with linear alternatives.

Rubicon Technologies — Digital waste and recycling platform connecting businesses with service providers while capturing material flow data. Enables measurement that supports circular procurement verification.

Key Investors & Funders

International Finance Corporation (IFC) — $1.9 billion invested in emerging market circular solutions since 2015. Harmonized Guidelines for circular economy finance launching January 2026 will standardize impact measurement.

European Investment Bank — Major funder of circular infrastructure including H2 Green Steel (€750 million) and numerous municipal circular economy projects. October 2025 Circular Public Procurement guidance signals institutional priorities.

Closed Loop Partners — Venture capital, growth equity, and project finance focused exclusively on circular economy. Investments span materials, packaging, fashion, and technology enablers.

Ellen MacArthur Foundation — While not an investor, the Foundation's Network brings together companies representing $2 trillion in revenue committed to circular economy transition, creating demand signals that shape investment flows.

Action Checklist

  1. Conduct material flow mapping — Before setting circular procurement targets, map current material inflows (virgin vs. secondary), product destinations (reuse, recycling, waste), and supplier capabilities. Use ISO 59020 categories but accept approximations where precise data is unavailable. This baseline enables measuring actual progress rather than theoretical improvements.

  2. Prioritize by spend concentration — Focus initial circular requirements on categories representing 70-80% of procurement spend. Attempting comprehensive circularity across all suppliers simultaneously produces survey fatigue and minimal results. Depth with key suppliers beats breadth with superficial engagement.

  3. Fund supplier capability building — Allocate budget for supplier training, assessment tools, and initial circularity audits. In emerging markets, expecting suppliers to independently fund compliance infrastructure excludes capable partners who lack resources. Consider shared cost models where supplier investment is matched by procurement budgets.

  4. Integrate circularity data into transactional systems — Move beyond annual surveys to embedding material composition, recycled content, and end-of-life responsibility into ordering and invoicing systems. When suppliers must provide data to get paid, completion rates approach 100% and data quality improves through repeated submission.

  5. Pilot product-as-a-service for suitable categories — Identify categories where performance contracts can replace ownership transfer. Start with lighting, IT equipment, uniforms, or other categories with established PaaS precedents. Structure contracts to include take-back obligations and material recovery responsibilities.

  6. Establish circularity KPIs in supplier scorecards — Add circular economy metrics to existing supplier performance evaluation. Sixty-four percent of companies now include sustainability metrics in scorecards, up from 38% in 2020. Weight circularity alongside cost, quality, and delivery performance to signal procurement priorities.

  7. Join industry data-sharing initiatives — Platforms like CDP Supply Chain, EcoVadis, and Together for Sustainability reduce duplication when multiple buyers request similar data from shared suppliers. Participation improves data quality through standardization while reducing supplier burden.

  8. Accept imperfection and iterate — Begin measuring with available data rather than waiting for perfect methodologies. The companies achieving circular procurement success treat measurement as an iterative process. Annual refinement of data quality, scope expansion, and methodology improvements compound into robust systems over 3-5 years.

FAQ

Q: How do we justify circular procurement investments when green premiums increase costs by 15-25%?

A: Material-level premiums of 15-25% typically translate to 1-3% increases in total procurement costs because circular categories rarely represent entire spend portfolios. Frame the business case around total cost of ownership rather than unit purchase price. Product-as-a-service models often reduce costs by 20-30% when maintenance, disposal, and replacement cycles are included. Additionally, regulatory trajectory is clear—the EU CBAM already requires 80% actual supplier data for complex goods, and similar requirements are expanding globally. Companies building circular procurement capabilities now gain 2-3 years of supplier relationship and data infrastructure advantage over those waiting for mandates. Finally, 78% of institutional investors consider circular economy metrics in company evaluation, creating capital cost implications for companies that cannot demonstrate progress.

Q: Our suppliers in emerging markets cannot provide ISO-compliant circularity data. Should we source from developed markets instead?

A: Switching to developed market suppliers rarely improves actual circularity outcomes—it simply substitutes measurable but distant supply chains for unmeasured but local ones. The practitioner consensus favours investing in local supplier capability rather than geographic substitution. Start with simplified measurement frameworks: basic material composition, recycled content percentages, and disposal pathways can be documented without sophisticated assessment infrastructure. Build toward ISO 59020 compliance over 2-3 years through funded training programs. Several practitioners noted that suppliers receiving capacity-building support became more strategically valuable partners than initially compliant alternatives, as the investment created loyalty and collaborative relationships. The IFC's Harmonized Guidelines launching in January 2026 will provide emerging market-specific frameworks that bridge the gap between current capabilities and global standards.

Q: How do we distinguish genuine circular suppliers from greenwashing claims?

A: Measurement theater—impressive claims without verifiable performance—represents the core risk in circular procurement. Three verification approaches have proven effective. First, require transactional data rather than attestations. When circularity metrics flow through ordering and invoicing systems, fabrication requires sustained fraud rather than optimistic survey responses. Second, conduct physical verification on a sampling basis. Even occasional site visits or material testing creates accountability that prevents the most egregious misrepresentation. Third, participate in industry platforms where suppliers report to multiple buyers. CDP Supply Chain and EcoVadis create reputational stakes beyond any single customer relationship, and data inconsistencies across buyers become visible. The practitioners we interviewed emphasized that perfect verification is impossible—the goal is creating sufficient accountability that suppliers invest in genuine performance rather than sophisticated claims.

Q: What circularity KPIs should we track in emerging market contexts?

A: ISO 59020 provides comprehensive metrics, but emerging market implementation requires prioritization. Start with four foundational KPIs: recycled/secondary material input percentage (measures circular sourcing), product/component reuse rate (measures value retention), recyclability rate at end-of-life (measures loop-closing potential), and supplier circularity data coverage (measures measurement capability itself). Track improvement trajectories rather than absolute benchmarks—a supplier improving from 12% to 25% recycled content demonstrates genuine progress even if the target is 50%. Avoid metrics that require sophisticated measurement infrastructure your suppliers cannot support. Industry averages can serve as starting points for categories where supplier-specific data is unavailable, with clear timelines for transitioning to actual measurement. Report both current performance and data quality/coverage to maintain transparency about measurement limitations.

Q: When will circular procurement become mandatory rather than voluntary?

A: The transition is already underway. The EU Circular Economy Act consultation closing November 2025 will create binding requirements for circular public procurement. The EU Ecodesign Regulation (2024), CSRD/ESRS E5 circular economy reporting requirements, and EU Packaging Regulations already mandate specific circular criteria. Germany's Supply Chain Due Diligence Act reform (September 2025) adapts these requirements to supply chain contexts. For emerging markets, the timeline depends on trade relationships—suppliers to European buyers face de facto requirements through buyer mandates even without domestic legislation. The UK Procurement Regulations 2024 and US Federal Buy Clean initiatives signal similar trajectories in other major markets. Practitioners recommend treating 2025-2027 as a capability-building window before requirements become universal. Companies establishing circular procurement programs now will have functioning systems when mandates arrive; those waiting will face compliance scrambles.

Sources

Circular procurement represents a fundamental shift from optimizing purchase transactions to managing material flows across entire value networks. For sustainability leads in emerging markets, the practitioner lessons are clear: start with imperfect data, invest in supplier capabilities, integrate measurement into transactional systems, and accept that building circular capacity and measuring it must happen simultaneously. The companies that will lead circular procurement in 2030 are not those waiting for perfect standards today—they are the ones building relationships, infrastructure, and iterative measurement systems that compound into genuine transformation.

Topics

circularprocurementScope 3LCAsortingcircularity KPIremanufacturing

Related Articles