Levers for a corporate transition to a plastics circular economy

With the global economy not yet 10% circular, businesses are key stakeholders in designing new forms of resource use, especially large multinationals. However, compared with the wealth of studies on ‘ born sustainable ’ start-ups, there is minimal case study or interview based research into how incumbent companies are approaching this transition. Focusing on plastics, we ask: how does one incumbent multinational company approach the circular economy transition? This paper presents a case study of the incumbent multinational chemical company Dow, a leading plastics manufacturer. Varied external stressors and drivers for the circular economy act upon a company (which also has its own imperatives), resulting in tentative steps towards circular economy. To date, these steps have tweaked the existing system rather than radically altering the business model. For companies, like for the entire global economy, this transition has only just begun. This paper identifies key drivers, enablers and barriers of the circular economy, none of which are fixed or immutable. Knowing which levers for change are available and effective could help policy makers to shift gear to enable quicker progress towards circularity. Overall, broad based support and engagement is needed to progress the circular economy, hence all stakeholders have roles to play in demanding and enacting circular practices.

insight into what circular economy means in practice for one incumbent multinational business. We also refer to the approaches to circularity of two other multinational companies, Dell (computing) and Glaxosmithkline (pharmaceuticals). This paper focuses specifically on plastics and circularity.
The past decade has seen considerable development and popularisation of circular economy thought and practice. The first Ellen MacArthur Foundation report on the circular economy was published in 2012. In December 2015, the European Commission launched the 'Closing the loop' action plan, followed by the 'New Circular Economy Action Plan' in March 2020, and as of March 2022, work is underway to draw up an international treaty on the lifecycle of plastics (EC, 2015(EC, , 2020Hobson & Lynch, 2016;McVeigh, 2022). In the wake of this activity, corporate interest in the Circular Economy has increased dramatically (Stewart & Niero, 2018). The concept of circular economy holds three principles: (1) preserving and enhancing natural capital, (2) optimizing yields from resources in use and (3) fostering system effectiveness (minimizing negative externalities) (EMF, 2015). To this, we add (4) restoring and regenerating workers and society (Barford & Ahmad, 2021). This contrasts with linear approaches, whereby value is created as virgin materials are extracted, processed, manufactured, used and then disposed of ( Figure 1). Moves towards circularity have been characterized as altering material flows-with materials completing one useful life (or loop) and then beginning another. Increasing circularity could involve slowing (e.g., long life models), narrowing (using less) and/or closing (by finding new uses for materials) these loops (Bocken et al., 2016).
Many activities fall under the broad definition of circularity, because different materials, uses and contexts need different processes. Amongst companies processing plastics, recycling is popular.
However, other more circular activities for synthetic items include sharing (Hobson & Lynch, 2016), extending producer responsibility (Levänen et al., 2018), eco-design (Mendoza et al., 2017) and product service system models, which replace customer ownership with payment for performance (Tukker, 2015). Industrial symbiosis also enables circularity, through the efficiency of sharing infrastructures, waste, by-products, materials or energy (Fraccascia et al., 2019).
These technical cycles can also include maintenance, repair, reuse, remanufacture and recycling (EMF, 2015). Despite the multitude of possible circular models, a focus on resource recovery through recycling persists. Recycling forms the outermost and least desirable loop of the technical cycle of material reuse (Figure 2), requiring more processing, labour, energy and new materials than other circular processes, with the end product usually being of less value than its predecessor (EMF, 2015). In addition, recycling low value materials, such as plastics, is becomes financially unviable when oil is cheap (Webster, 2021).
Despite the need for rapid change, the levers of change remain underexplored. While there is some theorisation of the field, scholars repeatedly point to absences and fragmentation of circular economy knowledge (Chen et al., 2020). More research is needed into how circular economy agendas relate to corporate sustainability, and how circular performance or transitions can be measured (Schröder et al., 2019;Stewart & Niero, 2018;Urbinati et al., 2017). While new 'born sustainable' companies are better understood (e.g., Rizos et al., 2016), considerable resources, impact and large scale operations characterise understudied multinational F I G U R E 1 Plastics in a linear economy. This diagram shows how in a linear (take-make-waste) economy, virgin raw materials are extracted and used to make plastics, which are then thrown away or incinerated at their end of life. As a result, communities can be impacted by plastic and air pollution F I G U R E 2 Circular loops for plastics. This diagram highlights the degrees of change required to implement different types of circularity. Bear in mind that according to the Ellen MacArthur Foundation model, the inner loops are the most circular and therefore the most desirable. Yet they often require the biggest amount of change and redesign, so are more disruptive. This figure builds upon the EMF's (2015) butterfly diagram and UNEP's (2019) formulation of circular economy that includes the option of refusing consumption incumbents (exceptions include Gandolfo & Lupi, 2021, on paper and pulp;and Todeschini et al., 2017, on fashion). Large multinationals also have the potential to bring economy-wide leadership and influence in diverse sustainability topics, by setting minimum standards for their suppliers (e.g. Barford et al., 2022 on living wage value chains). 'Born sustainable' and incumbent companies face different constellations of barriers and enablers given their size, possible linear path dependency, histories and processes.
Specifically, incumbent companies may see less immediate economic opportunity due to their reliance on linear modes of production. Comparing SMEs and incumbents in the fashion industry, incumbents were less agile at identifying new opportunities and shifting towards these (Todeschini et al., 2017). How incumbent companies transition towards circularity is critical to achieving greater sustainability; it is also intellectually interesting given the need for entire businesses, predicated on unsustainable practices, to change (Chen et al., 2020).  (Katz, 2010;Müller, 2018;WRI, 1994), they have a history of engaging in what could now be seen as circular economy activities, such as their 'waste reduction always pays' program (WRAP) announced in 1986 and their corporate Sustainability Goals announced in 2006. Dow recently launched their third-set of 10-year Sustainability Goals for 2025 onwards and aim to 'close the loop by enabling 100% of Dow products sold in packaging applications to be reusable and recyclable by 2035' (Dow, 2019, p. 29). As an incumbent multinational with a vision for widespread circular transformation, but also as a major plastics producer, Dow is an ideal case study to further understandings into what enables and prevents a circular transition. We also draw upon interviews with two other major companies, Dell and Glaxosmithkline, to understand how Dow compares to other incumbent multinational companies who have also committed to greater circularity.

| CONCEPTUAL FRAMEWORK: BUSINESS TRANSITIONS TOWARDS CIRCULAR PRACTICES
A large volume of literature exists on corporate sustainability strategies and sustainable business models; within this, the literature on circular business models is relatively recent and research draws heavily upon corporate reports, other secondary sources and surveys Chen et al., 2020;Linder & Williander, 2015;Prieto-Sandoval et al., 2018;Rizos et al., 2016;Stewart & Niero, 2018;Urbinati et al., 2017;Veleva et al., 2017). Qualitative research methods can deepen and extend this existing literature, by accessing people's insights, reflections, and conceptual frameworks (e.g., Dey et al., 2020;Barford, 2020a). Further, the circular business strategies literature largely focuses upon small and medium enterprises (SMEs) or 'born sustainable' companies and start-ups (García-Quevedo et al., 2020;Joustra et al., 2013;Todeschini et al., 2017); in other words, firms often designed for circularity from the outset. These gaps led us to use semi-structured interviews to investigate incumbent corporate transitions towards circularity. The conceptual framework below sets out the relationship between circular economy and sustainability within a business context, outlines business models for circularity and reviews the nascent literature on current drivers, enablers and barriers to circularity across industries.

| Circular economy, sustainability and growth
Various sustainable business models co-exist alongside the dominant, extractive and waste-generating mainstream business models. Circular economy is a new addition to an older trend of business sustainability, which builds upon an earlier emphasis of business responsibility in recognition that a myopic focus on customers and shareholders must be extended to include society and the environment as key stakeholders (Bozcken et al., 2013). Sustainability and circularity are complementary but non-interchangeable concepts. The Circular Economy prioritises economic systems and environmental benefits, with minimal reference to the social (Barford, 2020b;Barford & Ahmad, 2021;Geissdoerfer et al., 2017), while sustainability offers a more holistic concept which treats the environment, the social and the economic with equal weighting (Brundtland, 1987). There are various perspectives on how circular economy relates to sustainability: conditional (circularity is a condition of sustainability), beneficial (circularity is one of several pathways to sustainability) and trade-offs (circularity leads to sustainability trade-offs) (Geissdoerfer et al., 2017). Importantly, a transition to both sustainable and circular business models requires a leadership strategy that delivers more than just long-term business success. In the context of systemic pressures, leaders must be equipped to reframe their business' purpose, strategy, culture and approach to achieve change quickly and at scale (CISL, 2018). Businesses need to lead in reconciling commercial success with positive outcomes for society and the environment (CISL, 2018).
Most circular business practices are predicated upon economic growth, while a small number of companies have adopted the more radical degrowth approach, such as Patagonia and Riversimple (Khmara & Kronenberg, 2018). The degrowth movement aims to downscale production and consumption to increase human and ecological well-being, calling for open, localised economies and with democratic resource distribution (Hobson & Lynch, 2016). This concept is peripheral to the mainstream circular economy approach, yet it responds to the risk that improvements in efficiency from circular technology and eco-innovation are offset by increased usage and demand, known as Jevon's Paradox . If prices fall, this could stimulate consumption, potentially increasing energy use and demand for secondary/recycled materials that would be better designed out . The Jevon's paradox highlights that technology alone is insufficient to address the ecological crisis (Zhang et al., 2018). While advocates of the circular economy often prioritise technology, proponents of degrowth emphasize the need for radical political, economic and social transformation (Kallis et al., 2018).
Degrowth advocates warn that the circular economy could form the next round of the endless cycle of capitalist Schumpeterian 'creative destruction' (Hobson & Lynch, 2016), enabling further wealth accumulation by some and driving inequality throughout society (Dorling et al., 2008;Piketty, 2014).

| Drivers, enablers and barriers for circularity
Corporate steps towards greater circularity are influenced by a variety of factors, internal and external to the company. Before reviewing the details, we contextualise these transitions of companies which operate within and across neoliberal economies, embedded within an ideology of consumerism . Neoliberal ideology promotes open, unregulated markets with mobile international capital as the optimal mechanism for socio-economic development (Harvey, 2007). Neoliberalism impedes certain moves towards a circular economy (Huckle, 2012), as it renders government regulation unpopular despite its efficacy in reducing harmful processes and consumer choice editing (Kopnina, 2019). Limited government intervention has also facilitated 'fake' corporate commitments to sustainability (greenwashing) and social responsibility (bluewashing) which legitimise 'take, make, dispose' approaches (Bigge, 2004;Laufer, 2003). It is possible that the legacies of other social and economic systems compromise circular economy efforts (Schröder et al., 2019). Despite embedded neoliberal ideology presenting a structural constraint to corporate transitions, circular business models are being adopted (Urbinati et al., 2017). Below we explore six influences on corporate transitions towards circularity: employees, regulation, consumers, collaboration, viability and technology.
Employee awareness and engagement in 'zero waste' and circular economy is underdeveloped in many firms, yet can be pivotal in effecting change (Veleva et al., 2017). Employees at all levels of a business can play a key role when equipped with the skills to nurture innovation and manage risk, and when inspired to transform the economic systems within which they operate (CISL, 2018). A study of 30 SMEs transitioning to circularity found 'company environmental culture' (mindset and commitment of staff) to be a key enabler, mentioned by 68% of the companies studied (Rizos et al., 2016). Further, Liu and Bai (2014) found that a stable employee base is a precondition for long term circular transitions; whereas high staff turnovers tend to leave circular development overlooked. However, employees can pose a barrier to change if, for example, managers have a strong aversion to risk or resistance to change (Dekoninck et al., 2016). Importantly, resilient management teams committed to long-term circularity targets are needed to evolve circular business models; as they can preempt possible clashes between siloed departments, for example, planning versus production or admin versus operations (Liu & Bai, 2014).
Our research explores this in greater detail, with a focus on Dow's circular economy strategy and employee engagement.
Regulation is widely recognised for its potential to drive circularity. National, regional and international legislation and agendas have  (Qu et al., 2019). Future policies to support corporate governance to embed circular business models could include: credible penalties for failure, strengthened boards of directors, shareholder empowerment and improved disclosure (Liu & Bai, 2014).
Policy can also constrain circularity, particularly when waste management rules sometimes block reuse of waste. While regulations define higher standards and stimulate reactive behaviour, policies can constrain the choice of circular solutions leading to unevenness between countries (Taddeo et al., 2017). For example, the limited transposition of Directive 2008/98/EC in Italy means that industrial companies cannot use scraps from other companies as raw materials, hindering economic and environmental gains of industrial symbiosis (Taddeo et al., 2017). Similarly, EU waste legislation holds no coherent definition of waste materials (Koch & Roberts, 2017), thus limiting the cross-border transportation of waste and rendering closed-loop supply chains less feasible. Policy can both drive and block moves towards circularity, this paper considers the role of policy alongside other factors.
Consumers can drive and block corporate circular implementation.
Research drawing upon 4000 facilities in seven OECD countries evidences the strong influence of market pressure upon firms' environmental commitment (Johnstone & Labonne, 2009). In the fashion industry, consumer awareness is a key driver for business model innovation (Todeschini et al., 2017), with a recent surge in demand for sustainable fashion pressuring 'fast fashion' incumbent businesses to shift their brand image and operations (Todeschini et al., 2017). While consumer pressure drives business circularity in developed countries (Liu & Bai, 2014), in China, market pressure does not influence the environmental behaviour of industrial firms (Wang et al., 2007).
Although rare, consumer-facing initiatives can be pivotal for transitions towards circularity (Stewart & Niero, 2018). For example, in the fashion industry, innovative business models need to convince consumers of the benefits of sustainable clothing (Todeschini et al., 2017). Given that companies operate at different scales with diverse purposes, and some are not consumer-facing (i.e., they supply other companies, not individuals), the influence of consumers varies.
Innovative partnerships and collaboration are necessary to advance the circular economy (Veleva et al., 2017). Key stakeholders include multinationals, entrepreneurs, governments, non-governmental organisations and academic institutions (Veleva et al., 2017). Collaboration enables the sharing of the driving forces embedded in people and organisations, such local knowledge and operating processes, which can enable change (Jacobsen & Anderberg, 2004). Partners can serve as 'knowledge brokers' in non-commercial collaborations where the context is unfamiliar to a company (Brown et al., 2020). A study of 10 fast-moving consumer goods companies with both 'circular' and 'enabling' business models points to the benefits of horizontal communication for cross-industry and cross-organisational innovative reform (Chen et al., 2020;Unilever, 2016). Commercial collaboration within industry is also an enabler of circularity, where supply chains align with values to allow collaboration, and knowledge or resource sharing (Todeschini et al., 2017). Conversely, misalignment in organisational values between partners or overly complex operational collaboration hinders circular transitions (Todeschini et al., 2017).
Issues of viability and risk can prevent change, yet various factors influence viability in terms of what is possible and profitable. When researching eco-industrial chains, Liu (2008) found that the cost of establishing these often exceeded potential profits. Hence, focusing on resource scarcity and the environment yet disregarding economic implications is detrimental to circular transitions, since circular design and implementation are predicated on profitability (Lieder & Rashid, 2016). The economic risks associated with change, such as uncertainty about the marketplace, alongside complexity of current production systems create further barriers (Veleva et al., 2017). For example Tang and Wang (2002) found that only 13.3% of consumers in China considered eco-labelled products to have an influence on their purchasing behaviour. Therefore, if consumers resist change this could inhibit profits, preventing the extension of more circular processes. However, risk assessment that accounts for time horizons, internal and external factors can ensure that long term benefits are not overlooked (Chen et al., 2020). Circular economy models could balance short-term losses against long-term benefits.
Technology and knowledge can improve firms' adaptive capacity.
When assessing the transition from linear to circular production by 30 SMEs, insufficient capital was a barrier for 50% of firms, insufficient technical and technological know-how limited 21% (Rizos et al., 2016). The integration of new sustainable technologies into existing business models may be stalled by long procedures to meet standards, or by gaps in employees' skills and knowledge (Rizos et al., 2016). Circular (re)design strategies can reduce resource consumption; increase reliability and durability, dematerialise products; promote product life extension; recover resources and regenerate systems (Stewart & Niero, 2018). Using technology to measure circular design can support a transition, for example measuring waste reduction through "output" indicators tracking reuse, recycling, composting, energy recovery, incineration and landfill (Veleva et al., 2017).
Improved user interfaces (e.g., an app) could also improve services of remanufacture, reuse and repair (Manninen et al. (2018).

| Research question
The literature review above demonstrates how diverse factors create the context in which decisions about, and progress towards, circularity are made. Some factors, such as policy, can act both as barriers and enablers depending upon the details and intersection with other factors. We now turn to our own case study research, to answer: how does one incumbent multinational company approach the circular economy transition?

| METHODS
A series of semi-structured interviews produced one detailed case study of Dow, to access context specific knowledge and detail (Yin, 2009 1. Protect the climate. As part of our action plan to put us on a path to carbon neutrality by 2050, we are committed to implementing and advancing technologies to manufacture our products using less resources. Target: By 2030, Dow will reduce its net annual carbon emissions by 5 million metric tons versus its 2020 baseline (15% reduction). By 2050, Dow intends to be carbon neutral (Scopes 1 + 2 + 3 plus product benefits).

Stop the waste.
We are collaborating to invest in key technologies and infrastructure to significantly increase global recycling.
Target: By 2030, Dow will enable 1 million metric tons of plastic to be collected, reused or recycled through its direct actions and partnerships.
3. Close the loop. We are committed to redesigning and promoting reusable or recyclable packaging applications.
Target: By 2035, Dow will close the loop by enabling 100% of Dow products sold into packaging applications to be reusable or recyclable.

| Policy engagement
The companies were involved in policy discussions, with the potential to influence and guide discussions. There was hope that governments would consult them: South Africa 'have a very good consultative process, with all of their stakeholders and the private sector etc. and so through the associations that we are part of on the ground, we have the opportunity to shape policy with governments and be involved on platforms to get that done. … Kenya is very forward looking in the policy space so Kenya has some of the strictest plastic management policy in the region, lots of bans, lots of restrictions around plastics. However, I feel that it is less consultative, and we do not really have a direct platform to approach the government'. (Adwoa Coleman, Dow) 4.4 | Customer demand and viability

| Customer power
Dow is a business-to-business (B2B) company, hence interviewees stated that other businesses set the demand for circular alternatives.
Dow support their customers in meeting their sustainability commitments.
Given the brands goals that they want to achieve

| Economics of circularity
One perennial challenge for the recycled plastics market is the fluctuating price of oil: when oil is cheap, virgin plastic is cheap. Also, new systems are yet to expand and benefit from the economies of scale from which linear processes benefit. That said, sustainable options were reported to outstrip other markets.
we have to make a profit otherwise we do not survive … whatever we end up doing does need to make economic sense. (Eric Peeters, Dow) We're comparing systems that have been optimized for decades, with systems that are in their infancy. So, the scale typically reduces costs. Yes, so to deliver a circular economy solution today is probably more expensive than a linear, by and large, you know otherwise we would be adopting them very, very quickly.
(Nicoletta Piccolrovazzi, Dow) we have been able to demonstrate ourselves as the sustainability leader in our segment: those who do good business get good results and this is part of doing  Bocken et al., 2016;EMF, 2012EMF, , 2015Hobson & Lynch, 2016;Levänen et al., 2018;Mendoza et al., 2017;Tukker, 2015), a focus on resource recovery through recycling persists, and in general, plastics continue to be seen as waste rather than opportunity. In terms of transitioning, recycling is low-hanging fruit. It is minimally disruptive, requiring the least redesign of industrial processes, and largely allowing 'business as usual'.
Recycling is also the least desirable loop for material reuse (Figure 1).
First, recycling requires considerable processing, labour, energy and new materials (EMF, 2015). This intensive process can render low value materials uncompetitive against new materials. Second, recycling is not the idealised closed loop for plastics, as recovered materials that are contaminated or mixed are diverted to landfill or incinerated-resulting in air or groundwater pollution (Clift et al., 2019;Webster, 2021). Recycling can also distract attention from more ambitious forms of circularity, such as Dell's take-back systems and their forthcoming 'Project Apex' for 'as-a-service' models.
That said, while a major clean-up operation is needed for the linear economy which recycling can support, this should be advanced in parallel to more disruptive versions of circularity.
To offer the agility and innovation found in some SMEs (Mura et al., 2020), Dow's Impact Fund supports experimentation, evolution and diffused innovation. The Impact Fund incubates ideas from any level of the business, via a competitive funding mechanism, and with the potential to scale. The 'Recycling for a Change' Impact Fund programme in Brazil demonstrates the convergence of several levers for change-namely, employee engagement, pilot projects and external partnerships. While these levers hitherto predominately enable recycling circularity, they promote a socially progressive version, whereby social impact is essential and prioritised (Barford & Ahmad, 2021).
Impact Fund projects require external partnerships to co-create solutions, in part addressing the challenge of establishing cross-value chain collaboration for a system-wide circular economy (Todeschini et al., 2017;Veleva et al., 2017). Engaging the insights of internal and external stakeholders replaces earlier top-down approaches to business model innovation. Yet, comparing the USD1.4 million awarded to Impact Fund projects with Dow's net sales of USD 38.5 billion for 2020 (Dow, 2020) hints at the potential and need to substantially upscale the Business Impact Fund in order to create substantial solutions to Dow's current plastic operations.
The double-edged role of policy, described both as a barrier and driver of circular economy, makes policy a key lever. To unpack policy as an obstacle to the circular economy, we consider the Basel Convention, extended to include plastics in 2019 (Webster, 2021). This legislation challenged Dow, as their recycling programmes assumed the transport of plastic waste to plastics recycling centres. Dow would previously move plastic waste across national borders to solve the challenge of patchy recycling. Thus this particular version of circular economy was disrupted by a policy, whereas national scale circular models or more 'upstream' models (such as reuse, repair and remanufacture-see Figure 1) would have not been impacted in this way. Companies also shape policy. In South Africa and Ghana, for example, Dow representatives are closely engaged with policy making, sometimes also blocking certain policies. Faced with a possible Ghanaian plastics ban, major plastic producers gathered to advance recycling efforts and pre-empt the ban. Arguably a well-enforced plas- All the barriers, enablers and drivers identified are malleable over decadal timescales. This means that today's barriers could be reduced, or enablers enhanced. The context in which Dow operates is shaped by many factors, including Dow itself, and these levers are interconnected. The choice of levers for change means there are several pressure points which could be used to initiate more ambitious circularity.
With the world only partly circular, these findings represent companies beginning their circular journeys. Dow has started at the outer loop for plastics, relying on mechanical recycling, with future plans pinned onto chemical recycling becoming a financially viable option.

| CONCLUDING COMMENTS
The end point for circularity is well defined, yet the route to get there is still being mapped. As new systems and approaches are built onto older structures, the processes of these older modes in part determine the next steps. This palimpsest of old systems shapes the choices and transitions made. Our global reliance on plastic is hard to break out of for companies and societies, and this dependence on plastic is not purely for technical reasons. A swathe of other factors which concern legislation, finance, prices and leadership have led us to rely on plastics for many parts of our daily lives. As one Dow interviewee put it, 'it's hard to turn a ship around while not sending everyone home.' During our research we spoke to sustainability leaders navigating this challenge within their companies. However, we do not need to wait for a technological solution to these challenges, we can start addressing them now by using the other levers for change: policy, public pressure, employee engagement, redesign, partnerships and corporate culture. Walter Stahel (2016) sees a need for concerted action on all fronts; though we risk delay if we wait for 'all fronts' to be ready.
Some actors need to lead.
There are many levers which may block, enable or even drive a transition towards circularity. These levers will be critical to institutionalizing circularity, by jumpstarting, diffusing and then sustaining circular economy (Panwar & Niesten, 2022). We have used the term 'lever' because these are neither fixed nor immutable; we have also termed them levers because our findings show that these elements make a difference to the actions of multinational companies when they define their ambitions based upon the intersection of their corporate culture and values with the wider economic, legislative and cultural context in which they operate. Below we offer recommendations for accelerating a circular transition. Through knowing what might block progress, we can identify what could be altered to enable progress (Box 3).

CONFLICT OF INTEREST
Neither of the authors of this paper has a conflict of interests to report.