Globally, the circularity rate is declining: from 9.1% in 2018 to 6.9% in 2025. This is despite growing awareness, pilots and legislation. The hard truth is that we simply use too much material. Overall material growth eats up all efficiency gains, leading to the dreaded rebound effect. So efficiency alone does not solve the problem, which is why sufficiency is important.
What is sufficiency and why now?
Sufficiency is not a strategy to do less, but to do smarter. It is about questioning our need for products and services, and finding ways to achieve the same or even better outcomes with less material. The IPCC defines it as “measures and daily practices that avoid demand for energy, materials, land and water, while delivering well-being for all within planetary boundaries.”
Important to understand: sufficiency makes us less dependent on raw materials and more dependent on our own value creation. So it is not about less business, but better business models: higher margins, longer customer relationships and more stable chains.
We can no longer ignore this approach. Of the nine planetary boundaries, seven have now been crossed. Moreover, we are running into physical limits: experts estimate that a maximum of 25% circularity is achievable by focusing only on recycling and reuse. Global material use is projected to increase 60% by 2060. All recycling efforts simply cannot keep up with this growth.
Breaking the Phoebus mechanism
Sufficiency prevents circularity from falling back into linear behavior and helps decouple economic growth from material consumption. And as the Phoebus cartel showed: as long as value remains linked to volume, we automatically steer toward waste. This cartel had the lamp business on its head by deliberately making lamps operate for a maximum of 1,000 hours in order to sell more volume and thus make them so that they broke down faster. Sufficiency breaks precisely that mechanism.
Three concrete sufficiency strategies for businesses
Fortunately, organizations do not have to start from scratch. There are already concrete strategies that companies can deploy now as part of their ESG strategy. We highlight three of them here. Important to note: very many companies successfully apply material reduction, often not because they “want to be circular,” but because it is economically smarter, more robust and cheaper. Circular advantage is then a windfall.
Strategy 1: Design for less (dematerialization)
The first strategy is dematerialization: making products lighter, designing them smarter so that they perform the same function with less material. This starts as early as the design process and often produces surprising results.
Packaging companies and their suppliers are discovering that by reducing the number of layers of packaging material or a smarter design, they can save significant material. Especially for fixed deliveries, this leads to packaging reuse and less waste: pure sufficiency. This supports the soon to be mandatory PPWR.
A great Dutch example is Pretty Plastic, producer of facade panels made from 100% recycled PVC. This façade panel manufacturer discovered that the product still contained a lot of material and therefore had a high environmental impact. They now offer lighter, more material-efficient variants, reducing both impact and cost. The company is demonstrating that dematerialization is still possible even with recycled products.
Dematerialization requires a different design philosophy. Not “what else can go in?” but “what can go out without losing function?” It’s about asking essential questions: do we really need this component? Can we make this lighter? Can one component perform multiple functions?
Strategy 2: Product-as-a-service
The second strategy is to shift from selling to providing services. Instead of selling a product, sell its use or outcome. This model fundamentally changes the business case: if a manufacturer retains ownership and is paid for use, that manufacturer has every interest in ensuring that the product lasts, is well maintained and functions efficiently. Planned obsolescence as in the Phoebus example (Planned obsolescence) then suddenly becomes a bad idea.
A well-known Dutch example is Swapfiets, which rents bikes with an all-in service. Broken tire? Swapfiets comes by to repair or replace the bike. The company earns from use, not sales, and therefore has every interest in bikes that last and are easy to repair. Producers thus maintain control of their materials over multiple use cycles and can repair, upgrade and eventually reuse products and parts. Now that’s true circularity.
Strategy 3: Extend life and intensify use
The third strategy is twofold: make sure products last longer and that they are used more intensively. A Dutch company leading the way in this is Fairphonewhich makes modular, repairable phones. Fairphone gives a 5-year warranty on the Fairphone 5 and promises 8 years of updates, much longer than other brands. The phone is designed so that users can replace parts themselves with an ordinary screwdriver. Where other manufacturers claim that modular and sturdy do not go together, Fairphone proves otherwise.
In addition to making more sustainable products, it is crucial to engage customers. Communicate transparently about how they can extend life: “This product will last longer if you do X,” “Repair first, we’ll help,” “Recycle only as the last step.” This so-called best option first behavior ensures that consumers are committed to extending first, not replacing.
How can companies get hands-on with this?
Sufficiency may sound abstract, but implementation can be very practical. Important note: A circular strategy is only successful if it reduces consumption, extends lifespan and reduces overall impact. Preventing rebound is therefore at the heart of circular value creation.
Avoiding the rebound effect
Companies often reach for the lowest strategy on the R ladder (recycle) because it is the easiest. But recycling requires energy, water, transportation, chemistry. And a dangerous pattern emerges: with new circular products made from waste, consumers feel less guilt (“it will be recycled anyway”) and are more likely to discard. Companies use “recycling” as marketing and meanwhile keep producing more and more. That’s exactly where CE rebound occurs: you do something circular, but it still increases your overall impact.
Therefore, it is crucial to start with “Prevent” and “Reduce”, not recycling. First see if we need the product at all, then see if we can make it last longer, and only then look at recycling.
Practical implementation
- Start with a materiality analysis: Where is the greatest material use in your value chain? Focus on that first. A double materiality analysis can help.
- Experiment small and involve customers: Start with a pilot. Test a product-as-a-service model for one product line. Experiment with dematerialization on one new product. Communicate transparently to customers why you are making these choices and make it easy for them to participate.
- Calculate the business case: Sufficiency is economically smarter. Product-as-a-service provides predictable revenue. Dematerialization saves material costs. Life extension increases return on investment per product. Focus on the economic benefits: higher margins, more stable chains, less dependence on commodity prices.
- Work together: Many sufficiency strategies require collaboration along the chain. Join existing initiatives, learn from others and share knowledge.
Opportunities for future-proof organizations
Organizations that commit early to sufficiency strategies are positioning themselves for the future. They are building resilience by becoming less dependent on scarce resources. They create new markets and services by embedding ESG integrally into their strategy.
The business benefits are tangible: cost savings through more efficient use of materials, protection against commodity price fluctuations, and stronger customer relationships through the shift to service delivery. Governments also play a crucial role by setting sustainability requirements in tenders and offering tax incentives for circular business models.
The challenge we face is not simple, but neither is it unsolvable. Sufficiency is about creating value within planetary boundaries and increasing well-being without inflating material use. Organizations that start experimenting now are building a future-proof organization and contributing to a world where six of the nine planetary boundaries are not further crossed.
Want to know how your organization can make this transition? Check out our approach or find out how we help organizations with ESG implementation.