Covestro is focusing on the entire value chain to create value for customers for accelerating the circular economy and also a monetization framework that enables investments in the circular economy. Innovation Projects and Circular Solutions that receive investment must be economically viable. This can only be achieved through the interplay of consumers, producers, regulation, and technical solutions. To achieve this, new approaches to the market launch of products and solutions are needed, as well as the development of employee skills and expertise.
To this end, Covestro and Monitor Deloitte 2023 launched a joint project entitled “Monetize Circular Economy”. This collaboration enabled Covestro to incorporate relevant methods and external perspectives into the entire development process.
The project pursued two main objectives. Firstly, to develop a scalable framework for market entry and commercialization of more sustainable, circular products and solutions. Secondly, to create added value in partnership. This includes, for example, developing solutions with customers so that they in turn can create added value for their customers with more sustainable solutions. These are, for example, working out end customer-relevant purchasing arguments or jointly implementing increasing sustainability standards. Covestro’s projects from various business entities formed the basis for developing a model.
A joint project team consisting of employees from various Covestro business entities and a mixed team from Deloitte led by chemicals expert Kai Göbel and Dr. Amadeus Petzke, Head of Pricing & Monetization, initially collected concrete projects on circular solutions across the Group. Three selected pilot projects formed the basis for the development of a marketing and business development approach that serves both as a blueprint for monetizing Covestro’s circular products and for new business development at Deloitte.
“Circular solutions must be profitable to be implemented. Economic incentives that motivate or demotivate stakeholders must be clearly identified and addressed. For this, we need circular thinking, deep market understanding, and the creativity of our employees. We need a robust framework that our colleagues can use as a guide to drive business development in the circular economy. We are continuously developing this framework,” says Sucheta Govil, Chief Commercial Officer at Covestro.
WirtschaftsWoche 2024 has now honored this approach with the Best of Consulting Award in the Chemicals, Pharma & Healthcare sector.
Value creation cycle as the key
A decisive factor in monetization is the integration of the entire value chain, away from individual value creation steps and towards thinking in terms of a circular economy. “It’s not just about selling circular products, but about creating sustainable added value along the value chain together with partners and customers. Designing a framework based on specific Covestro industrial projects from start to finish was an exciting project. Winning the award is a great accolade and shows that we have succeeded,” says Bozidar Radner, Deloitte’s global key account manager for Covestro and Sector Head Chemicals. The management consultancy Deloitte was able to draw on extensive customer experience and requests from previous projects and learnings.
Development of the framework
Over one hundred Covestro employees identified key requirements for the monetization of circular solutions. In a structured approach consisting of four lab phases with coaching and review meetings in between, the teams successfully drove the pilot projects forward; at the same time, the insights gained led to the further development of the framework. Methodologies, case studies and their importance, as well as the correct sequencing of a project’s progression, were explored and refined over the course of the project, with real circular economy pilots forming the basis. An overarching project team from Covestro and Deloitte developed an internal platform for Covestro that provides resources, best practices, and tools such as ideas for customer outreach and legal guidelines for all Covestro business entities.
The result: a structured approach to accelerate the commercialization of circular solutions. This also includes raising awareness among the workforce. An accompanying webinar series, for example, promotes global exchange with internal circular economy (CE) experts and drives the further development of the market entry and commercialization strategy. In concrete terms, implementing the monetization approach in the operational business also means incorporating the circular economy mindset into the initial customer exchange and jointly identifying added value and developing solutions in partnership-based customer discussions. For example, there are “Monetize CE Pioneers”, a group of employees at Covestro who are available to colleagues around the world and who exchange information on their specialist areas and contribute their knowledge of various industries.
The vision of the circular economy and successful monetization are thus continuously developed.
