BiGS Actionable intelligence: There is money to be made in embracing circularity, but it isn’t certain or easy. It requires commitment, investment and an interest in creating new business models. It also requires collaboration among an expanded set of stakeholders such as brands, suppliers, technology providers, investors and governments.

BOSTON – May 12, 2023 – Why is the CEO of Norway’s largest waste management company preparing for a world with less trash, the very product from which the company profits?

Simple: The old model isn’t sustainable.

“You can’t live as a waste management company selling waste anymore,” NG Group CEO Bjørn Arve Ofstad told a group of about 250 business leaders, entrepreneurs, and financiers during a Harvard Business School (HBS) circularity conference last month. “We are creating a new business model out of our past position because our original one is dying.”

The waste management industry isn’t alone. From fashion to healthcare to vehicle manufacturing, legacy industries across sectors have for years embraced circularity as a way to recycle resources used to create products and return them to the market as either a product or raw material. And now, the concept is making fresh headlines as a mix of legacy and startup companies find new value and new ways to collect, sort, sell or leverage discarded items to reduce waste or extent materials in short supply.

Apple, for instance, last month announced a goal to use more recycled materials in Apple-designed products by 2025, such as the future use of 100% recycled cobalt in iPhone batteries and 100% recycled tin soldering in circuit boards. And this month, luxury retailer Bergdorf Goodman announced the debut of a repair and alteration service aimed at helping its tony customers extend the life of their fashionable possessions, be it a Prada leather clutch that needs a little refurbishing or tailoring a Versace gown.

HBS Professor George Serafeim, who led the April 14-15 event on HBS campus as part of HBS’s Digital, Data, and Design (D^3) Institute, estimates the transition to a circular economy as a multi-trillion-dollar market opportunity. The circularity journey, however, is by no means an easy or certain one. (Read Serafeim’s report highlighting lessons from the event here.)

Circularity is hard work

“Circularity means changing business models,” said Ofstad, who gave HBS’s The BiGS Fix an exclusive look inside the privately held company. “You can’t work the way you did before.”

Owned by Stockholm-based Summa Equity, NG Group is reinventing its entire business model. It’s identifying new investment opportunities, pioneering new reprocessing methods, developing new strategies and identifying new types of partnerships.

“We’re on a journey to turn a growing proportion of the waste we handle, including construction waste, into recovered raw materials and new products,” he said. “Recycling materials ranging from glass to gypsum is key to solving the challenge of resource scarcity for certain critical materials and it’s also a key part of the solution to decarbonize big corporations’ carbon footprint.”

NG Group takes in about 2.5 million tons of waste annually and recycles about 1.5 million tons of it each year. Because the waste doesn’t arrive clean, NG is investing in entirely new methods to treat it, such as acquiring facilities or identifying and collaborating with a niche partner in North America.

Private equity sees benefits: Doubling profits, saving the planet

From both the investor’s lens and a societal lens, this transition makes complete sense.

That’s according to Reynir Indahl, the founder and managing partner of Summa Equity, which bought NG Group in 2018.

“Moving waste from one place to a landfill is a low-margin business,” Indahl told The BiGS Fix during an interview from his office in Stockholm. “The more interesting play is if you can create some significant value-add to the waste and you turn that into revenue. If we do, we can both increase our growth and margins as well as the valuation of the company. So instead of making all the money upstream in collection, you make it downstream. That’s a much better business model.”

Indahl is on a mission to achieve a waste-free and circular economy in Europe – and a future where waste is minimized, and resources are conserved. Currently, the company spends roughly EUR 70 million to burn the 1 million ton of waste that it can’t recycle, Indahl said.

“So, we have the opportunity to double the profit if that was made into zero cost. We can even make a revenue stream out of it that could more than double the profits if we are able to do something valuable with it instead of getting rid of it,” he said.

The transition to a circular European economy is expected to require an investment of roughly EUR 230 billion by 2040, which Indahl estimates will translate into a financial value creation opportunity of about EUR 1.5 trillion. The return on investment, however, will be “massive for investors, our society and our planet,” he added.

In Europe, an estimated 22% of Europe’s total greenhouse gas emissions stems from material production and waste management alone, according to Summa Equity research.

Construction industry waste: A big opportunity

Currently, the NG Group is focusing its efforts on Norway’s construction industry waste, which globally is known as “the 40% industry” — responsible for 40% greenhouse gas emissions, 40% waste production and 40% material consumption. Specifically, the company’s tackling ways to recycle and repurpose concrete, gypsum, steel, glass and wood.

Window glass, for instance, can be repurposed from hazardous waste (due to gases trapped inside the lining of the windowpane) into insulation for buildings. And thrown-away electricity cables can be converted into low-carbon copper and aluminum for future use, reducing demand to pull them from the earth. And gypsum waste can be re-used and turned into new plaster board, a staple construction product.

The process of re-using gypsum, however, is a difficult one. It requires special technical expertise and processing so it can be used downstream, and a company like NG Group needs to do it at scale to sell the material “at right time, right quality and right price,” according to Ofstad. To make this happen, NG Group co-invested in a processing plant in Norway with a Canadian partner and found downstream partners to commit to buy the material.

To apply a similar formula for recycling hard-to-handle glass windows, the company invented a process to remove the glass from the lining, avoiding the hazard gas trapped inside. Ofstad said it’s important for leaders considering circularity to avoid underestimating practical issues associated with handling used materials.

“There is no material that you can quickly shift into a new raw material,” he said. “You need to process it. And each material needs specialized solutions to become valuable inputs into new production.”

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Do you have questions about the intersection of business and global society that you’d like to see HBS address or ideas for mini-case studies? Reach out to HBS BiGS Fix Editor Barbara DeLollis at or on LinkedIn.