Circularity beyond compliance: Inside Sustainability Communications

David Willans talks to Darren West, Global Head of Circular Economy Solutions at SAP. Darren leads SAP’s efforts to integrate sustainability into core business practices, focusing on how data and regulation are transforming industries. In this interview, Darren shares his insights on how businesses can move beyond compliance and use circularity to unlock new opportunities, while managing the growing complexities of sustainability regulations. 

You lead circular economy solutions at SAP — what does that mean in practice? 

My role sits at the intersection of sustainability strategy, product development and client engagement. I look across economic, business and political trends, translating that into what SAP could do, then I bring those topics to our board and customers. 

SAP has been on a sustainability journey for years. We’ve made major strides in optimizing data centers and reducing our own emissions, but our biggest impact lies in using our influence to support our customers in changing their businesses. Our software runs the core systems of much of the world’s manufacturers. In the context of circularity, that means helping them join up material flow data with financial systems, connecting upstream data and downstream inputs, so our customers can use that to redesign products and systems with circularity in mind. 

What’s shifted in the circularity conversation over the past few years? 

Until a few years ago, most circular economy conversations were driven by economics. For industries with big, long-life assets, circularity makes economic sense, so business got behind it – for example it makes economic sense to repair X-ray machines, jet engines and earth-moving equipment. But there was very little progress with smaller items, which are still stuck in the take–make–waste linear economy.  

Now though we are now seeing the adoption of circular economy techniques by businesses making much smaller components. They’re seeking to address supply chain risk, carbon and compliance issues, like the HARTING Technology Group. 

HARTING delivers lifeline solutions – data, signals, and power – for mission-critical applications across many industrial sectors. They need reliable methods to calculate carbon emissions across thousands of production materials and manage complex packaging data from thousands of suppliers. HARTING uses the SAP Sustainability Footprint Management solution to calculate, analyze, and report product carbon footprints automatically, with accuracy and confidence.   

The other shift is expanding – and increasingly complex – regulation. For example, Extended Producer Responsibility (EPR) regulations, where producers pay fees linked to the sustainability of the materials they use. These are expanding globally, particularly with packaging. SAP’s Responsible Design and Production solution helps customers to comply with the regulations, reduce EPR fees and waste. 

In Europe, a range of legislation is pushing circularity forward, such as the Critical Raw Materials Act and the Ecodesign for Sustainable Products Regulation. They’re forcing issues like digital product passports (DPPs) and extended supply chain data up the agenda. And that data will open up huge possibilities and opportunities, but it presents a communications challenge, too.  

What’s the communications challenge for circularity in that? 

It’s twofold.  

First, regulation gets attention and drives action, but if the story stays stuck on compliance, momentum dies. Most manufacturers still see DPPs as a headache. The few that look further see how the same data can unlock new business models and make them more circular. Once you can see every input, you can redesign for reuse. Once you can track materials, you can cut waste, recover value, and improve resilience. It might begin with anti-counterfeiting or traceability, but it almost always opens the door to broader innovation. 

Second, organizations are different. Some will be quick to understand the regulations and naturally look for the opportunities. But if others take longer, then those first movers will be onto the next thing, like AI, so the story for the business gets stuck and circularity becomes shorthand for compliance. 

The communications task is to use regulatory pressure to build urgency, then pivot to opportunity. “We have to” needs to become “we can.” Once you see the details of every input, if you’re thinking beyond compliance, you can redesign for reuse, cut waste, recover value, and build resilience. But only if the mindset moves on.   

What’s the solution then?  

The answer is to speak the language of business — risk, resilience, resource scarcity. In my experience, it’s about asking intelligent, open questions like: Will our materials still be accessible in five years? Will our operations be insurable, given where we source? What happens to our pricing competitiveness if our competitors have control of their own inputs and we’re dependent on the market price?  

It’s about getting beyond policy framing and into economics. Which, given circularity and economics are all about data, should be a natural fit and a conversation the CFO’s ears are open to.  

So, how important is data? 

It’s foundational. Without it, you can’t measure, model or prove anything. That’s why digital product passports, despite their administrative burden, are so powerful. Once you’ve got structured product and material data, you can model future risks, identify savings, and redesign products. 

Despite the polarization, many investors are starting to ask for this too. They see sustainability risks and are becoming more sophisticated in how they address them. The insurance market is already there. That’s why I think we’ll see data becoming a key battleground, not just for compliance, but for cost of capital, too. 

 Looking ahead, where is this going? 

The circularity gap is growing, and the consequences of extract-use-discard are getting larger and coming faster. Some companies and sectors are moving forward. But we know that for certain materials and sectors, circularity will become mandatory – by risk, pollution, cost of virgin materials and regulation. We don’t know exactly when, but we know it’s coming. 

The smart move is to decide early, using data to get ahead. If you can measure it, you can manage it. If you can model it, you can invest in it. However, if you can’t get the people in your business beyond compliance, you won’t be one of the winners. 

 

If you’d like help refreshing your sustainability or circularity narrative, communications or positioning, please get in touch.