Circular Optimisation – Measuring Circularity

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As business conversations around the circular economy shift from conceptual aspirations to concrete action plans, leaders are preparing to reshape traditional business models into circular successors. However, the road from intention to implementation is long and complicated, with few points of reference to gauge progress along the way.

Building upon the latest insights from circular economy think tanks and thought leaders, this blog series explores ways in which the circular transformation can be measured at the business level through sustainability performance management systems.

Definition of the Circular Economy

A circular economy is one that is restorative and regenerative by design, and which aims to keep products, components and materials at their highest utility and value at all times, distinguishing between technical and biological cycles – Ellen MacArthur Foundation

Summary: As circular economy principles become increasingly applicable and measurable at the business level. Pioneers require new data management capabilities to assess and accelerate their progress towards circularity. This need can be met by adapting sustainability performance management systems to align with business approaches to circularity.

A defining year…

2015 was a defining year for the circular economy. It evolved from a complex concept to a measurable mechanism for sustainable growth. This progression was driven by many. However, among combined efforts, two works stand out as pivotal:

  • Accenture released Waste to Wealth; consolidating a noisy array of circularity mechanisms into five business models;
  • In parallel, the Ellen MacArthur Foundation (EMAF) published output from the Circularity Indicators Project; specifying five indicator categories for measuring business circularity.

Together, these works have demystified the circular economy, and positioned it as an immediately applicable and measurable growth pathway. To harness the power of their combined insight, an overlay of the output from each (see figure 1) has been created to show that at the intersection of each circular business model (as proposed by Accenture) and each circularity indicator category (as proposed by EMAF) a range of hot spots emerge where the opportunities for measuring circularity are strongest.

Figure 1. Opportunities for measuring circularity

Where now…

Throughout April and May, each cluster of hot spots will be explored through a series of blog posts to reveal how sustainability performance management systems can be re-purposed to measure and manage progress against the following objectives:

  • Adoption of circular supply chains
  • Extensions of product life
  • Participation in sharing platforms
  • Re-positioning of products as a service
  • Improvements in recovery and recycling rates

Towards “circularity” is the direction of travel for leading businesses. Measuring progress is essential to arriving on time. Stay tuned to this blog series to find out how sustainability performance management systems can help.

 


About the author: Adrian Wain is a consultant at cr360. His focus is on bridging the gap between strategic priorities and the information systems that underpin their achievement.