1. Role in Circular Economy Transition
Control capital allocation, investment modeling and vendor engagement: Participants consistently described Finance and Procurement as “gatekeepers” to investment, pricing decisions and vendor qualification, highlighting their powerful role in enabling or blocking CE initiatives.
Influence CE through budget setting, sourcing cycles and long-term risk analysis: Comments pointed to the power of life cycle costing and financial modeling in setting the tone for CE feasibility — Finance controls the lens through which business cases are judged.
Shape CE adoption through contractual criteria and procurement policies: Comments emphasized prequalifying vendors for CE criteria, showing Procurement’s leverage over the supply chain’s circular performance.
2. How FM Can Inspire Collaboration
Co-develop business cases that link CE to financial performance and risk mitigation: Participants expressed the need for FM to frame CE initiatives in terms Finance understands, providing clear ROI models that highlight more than just cost, such as risk reduction, environmental and social gains.
Partner on vendor selection and life cycle-informed procurement: FM was seen as a collaborator in reshaping how goods and services are procured, through value-based evaluation, not just lowest cost.
Ensure FM is part of the annual budgeting process for circular economy initiatives: Comments emphasized that FM should be part of the annual budgeting process for CE initiatives, underlining that FM should have formal influence over CE-related financial planning.
3. Tools, Training and Capabilities Needed
Training in alternative business modeling: Both FM and Finance were seen as needing to build fluency in nontraditional investment logic, particularly regarding the removal of ownership obsession (i.e., shifting from a CAPEX mindset to an OPEX mindset with business models like as-a-service).
CE-aligned RFP templates and vendor evaluation checklists: The lack of consistency in how circularity is written into contracts prompts the need for standardized documentation and checklists.
4. KPIs and Metrics
Cost avoidance, life cycle ROI and value retention: The concept of cost and cost avoidance came up repeatedly, especially in comparison to traditional ROI, which may not capture circular value well. As such, the introduction of wider risk-based and ESG indicators is needed.
Percent of suppliers aligned with CE standards or targets: Prequalification and supplier scorecards could be implemented as ways to measure supply chain circularity.
5. Challenges and Barriers
Skepticism about long-term ROI and circular payback periods: The Finance function’s natural conservatism can conflict with CE’s long-term horizon, especially if hard ROI evidence is lacking.
Lack of CE-specific benchmarks or financial models: Without validated tools, CE proposals may be dismissed as soft or speculative.
Structural separation between Finance and Procurement in some organizations: This structural divide was mentioned as a barrier to creating integrated, life cycle-focused procurement strategies.
International Facility Management Association (IFMA) supports over 25,000 members in 140 countries. Since 1980, IFMA has worked to advance the FM profession through education, events, credentialing, research, networking and knowledge-sharing.
