Most Circular Economy Companies Ignore Sufficiency Strategy

The Circular Economy Has a Blind Spot

Here is a paradox that should bother anyone who thinks seriously about sustainability. For years, we have been told that the circular economy is the answer. Recycle more. Repair your phone. Buy products made from ocean plastic. Companies from IKEA to Apple have published glossy reports about their circular ambitions. The European Union has built policy around it. Venture capital has flowed.

And yet, the planet keeps warming. Material extraction keeps rising. Waste keeps piling up.

A 2022 study by Nancy Bocken, Laura Nießen, and Samuel W. Short, published in Frontiers in Sustainability, suggests a disturbing reason why. After analyzing 150 companies that claim to be part of the circular economy, the authors found that the vast majority ignore a strategy that might actually work. They call it "sufficiency." Most circular economy companies, it turns out, are not trying to sell you less stuff. They are trying to sell you different stuff, often just as much of it, and they are calling that progress (Bocken et al., 2022).

This is not an accident. It is a design flaw built into how we think about business, growth, and what it means to be "green."

What Is Sufficiency, and Why Does It Scare Business?

Sufficiency is the uncomfortable sibling of the circular economy. Where circularity focuses on closing loops recycling, remanufacturing, sharing platforms, sufficiency asks a more radical question: Do you actually need this thing at all?

The authors define sufficiency-oriented business models as those that "deliberately aim to reduce resource consumption and production volumes, often by slowing consumption or by offering services instead of products" (Bocken et al., 2022). In plain language: sufficiency means selling less. It means designing products that last so long that customers stop buying replacements. It means encouraging people to repair instead of upgrade. It means, in some cases, telling customers not to buy your product at all.

This is obviously terrible for quarterly earnings. It is also, potentially, the only thing that actually reduces absolute resource use.

Bocken and her colleagues analyzed 150 companies that had been identified as circular economy pioneers. They looked at seven core business elements: purpose, ownership, governance, finance, networks, scale up, and impact. They wanted to know how many of these companies actually embedded sufficiency into their strategy. The answer: very few.

"Most of the 150 cases focus on efficiency and closing loops, rather than sufficiency," the authors write. The companies that did embrace sufficiency tended to be smaller, mission driven, and often structured as cooperatives or foundations. They were not the household names. They were not the companies with the biggest marketing budgets (Bocken et al., 2022).

The Seven Levers That Most Companies Leave Unpulled

The study is valuable because it does not just complain about what companies are doing wrong. It identifies exactly where they fall short. Bocken and her team examined each company across seven dimensions of economic transformation. Here is what they found:

Purpose: Profit vs. Planet

Most companies in the sample had a purpose statement that included environmental goals. But the authors found a clear split. Companies that prioritized sufficiency tended to have "a social or environmental purpose that is not subordinate to profit maximization." In other words, their mission was not just a line on a website. It was legally embedded in how they operated.

Ownership: Who Controls the Company Matters

Sufficiency companies were far more likely to be owned by foundations, cooperatives, or employees. The authors note that "ownership structures that prioritize stakeholder interests over shareholder value appear to be more conducive to sufficiency." This makes intuitive sense. A company owned by venture capitalists who expect a 10x return in five years cannot afford to tell customers to buy less.

Governance: The Boardroom Problem

Most circular economy companies still use traditional corporate governance. That means boards are accountable to shareholders first. Sufficiency companies, by contrast, often had "multi stakeholder governance" that gave a voice to workers, communities, and even the environment. One example the authors highlight is the Dutch company Fairphone, which includes environmental and social criteria in its governance structure.

Finance: The Growth Trap

This was the biggest barrier. Venture capital and private equity demand growth. Sufficiency demands restraint. The authors found that "companies that rely on external finance, particularly venture capital, struggle to maintain sufficiency strategies over time." The pressure to scale up forces them to abandon sufficiency in favor of volume. The circular economy becomes just another growth story.

Networks: Who You Partner With

Sufficiency companies tended to build networks with other mission driven organizations, not just suppliers and distributors. They shared knowledge about how to reduce consumption. Most circular economy companies, however, had conventional supply chain networks focused on efficiency and cost reduction.

Scale Up: The Bigger Is Better Myth

The authors found a tension between scaling up and staying sufficient. "Scaling up is often associated with increasing production volumes, which may conflict with sufficiency principles." Some companies tried to scale by replicating their model in new locations rather than growing their output. But most simply grew bigger, which meant selling more.

Impact: Measuring What Matters

Finally, the study looked at how companies measure success. Most circular economy companies measure recycling rates, waste reduction, or energy efficiency. These are all good things. But they do not measure whether total resource consumption is falling. Sufficiency companies, by contrast, sometimes measured "absolute reductions in sales volumes" or "product lifetime extension." They counted success by selling less, not more.

The One Company That Got It Right

The paper does not name names in a way that would embarrass specific companies, but it does point to patterns. One of the most cited examples of a sufficiency oriented business is the outdoor clothing company Patagonia. Its founder famously ran a full page ad in The New York Times telling customers not to buy his jacket. The company offers free repairs and sells used gear. Its purpose is legally tied to environmental protection.

Patagonia fits the profile the authors describe. It is not owned by venture capital. It has a mission that is not subordinate to profit. It measures success partly by product longevity. It is also, notably, a private company that does not face quarterly earnings pressure.

But Patagonia is the exception, not the rule. Most circular economy companies are not Patagonia. They are startups that raised money from impact investors who still expect a return. They are divisions of multinationals that must report growth to the board. They are, as the authors put it, "locked into a system that rewards volume over sufficiency."

How the Study Was Done

This is not a survey. It is not an experiment. It is what the authors call "practice research." Bocken, Nießen, and Short started with a database of 150 companies that had been identified in previous research as circular economy pioneers. They then analyzed each company's publicly available information: websites, annual reports, mission statements, news articles. They coded each company across the seven business elements, looking for evidence of sufficiency oriented practices.

The sample was global but skewed toward Europe and North America. It included companies from sectors like electronics, fashion, furniture, and food. The authors were careful to note that they were analyzing stated strategies and public claims, not necessarily actual outcomes. A company can say it is committed to sufficiency and still grow its sales. The study captures intention as much as action.

This is a limitation, and the authors acknowledge it. Public statements are not the same as behavior. But they are a reasonable proxy for what companies believe is important enough to say out loud. If a company does not even mention sufficiency in its public materials, it is probably not prioritizing it.

What the Research Does Not Prove

It is important to be clear about what this study does and does not show.

It does not prove that circular economy companies are lying or greenwashing. Many of them are genuinely reducing waste and improving efficiency. That matters. Recycling plastic bottles into new ones is better than dumping them in the ocean. Making a laptop that is easier to repair is better than one that is glued shut.

But the study suggests that these efforts, on their own, are not enough. Efficiency gains can be eaten up by what economists call the rebound effect: when you make a product more efficient, people use it more, or they spend the money they saved on something else that consumes resources. A fuel efficient car still uses fuel. A recyclable phone still gets replaced every two years.

The authors are not arguing that circular economy companies are bad. They are arguing that without sufficiency, circularity is incomplete. It is like trying to drain a bathtub while the faucet is still running. You can improve the drain all you want, but the water level will not go down until you turn off the tap.

The research also does not prove that sufficiency is profitable. It might be. Patagonia is doing fine. But the study does not claim that sufficiency companies outperform financially. It claims they outperform environmentally. Those are different things, and the tension between them is the whole point.

Why the Gap Exists: The Institutional Limits of Business

Bocken and her colleagues do not blame individual companies. They blame the system. "The role of business in a sufficiency based circular economy is limited by institutional constraints," they write. These constraints include:

• ▸The legal duty of directors to maximize shareholder value
• ▸The structure of financial markets that demand growth
• ▸The cultural assumption that more consumption means a better life
• ▸The lack of policy incentives for selling less

A company that genuinely embraced sufficiency would have to fight against all of these forces. It would need to be structured differently, financed differently, and measured differently. Most companies are not set up to do that. The ones that are tend to be small, alternative, and vulnerable to being acquired or outcompeted.

The authors suggest that policy intervention is needed to level the playing field. They point to things like extended producer responsibility laws, tax breaks for repair services, and bans on planned obsolescence. But they are realistic about the political difficulty. "Policies that promote sufficiency are rare because they challenge the growth paradigm," they note.

What This Actually Means

Here is the takeaway. Not a vague hope, but a set of specific, actionable insights that come directly from the research.

• ▸If you are an investor, stop asking circular economy startups only about their revenue growth. Ask them how they measure sufficiency. Ask what happens to their business model if they succeed in selling less. If they do not have an answer, they are not serious about circularity.

• ▸If you are a policymaker, recognize that voluntary corporate action will not get us to a sustainable economy. The companies that embrace sufficiency are the ones that are legally structured to do so. Policy should encourage alternative ownership models: cooperatives, foundations, B Corps. It should also penalize volume, not just waste.

• ▸If you are a consumer, stop rewarding companies that talk about circularity without talking about sufficiency. A company that sells you a "circular" phone but releases a new model every year is not solving the problem. Look for companies that explicitly tell you to buy less, that offer repairs, and that measure success by product lifetime.

• ▸If you are a company, the research suggests that sufficiency is not just a marketing angle. It is a structural choice. It requires different ownership, different governance, and different financing. You cannot graft sufficiency onto a growth machine. You have to build a different machine.

• ▸The open question is whether sufficiency can scale. The study shows that most companies that try it stay small. But that might be a feature, not a bug. Maybe a sustainable economy is not one where a few giant companies sell less. Maybe it is one where many small, local, mission driven companies serve real needs without chasing exponential growth. We do not know yet. But we should stop pretending that the current circular economy is taking us there. It is not. It is just making the same machine a little more efficient. And the machine itself is the problem.