Trend: Circularity becomes measurable

The idea of a circular economy is growing up fast: now that we have overcome the circularity’s awareness and conceptual understanding obstacle, we need to remedy the lack of consistent metrics to understand inefficiencies within the current linear system, to measure progress over time and to contextualize circularity within global boundaries.

A growing number of tools and frameworks at the systems, company and product levels are beginning to provide the formal metrics needed for circularity to live up to its potential. And as countries, cities and companies commit to ambitious circularity goals, consistent measurement frameworks will enable data-driven decision-making, facilitate accountability and progress-tracking, and ultimately justify the value of a circular supply chain, business model or economy.

At the systems level, measuring circularity is primarily understood as a matter of quantifying material flows.

At the business level, companies are beginning to use circularity frameworks as an internal tool to assess the full scope of material flows in their operations and to understand the potential value of circular strategies and tactics.

At the product level, life-cycle assessment, or LCA, has been the dominant tool to calculate the environmental impact of goods and continues to serve as a relatively effective proxy for product circularity. However, LCA-driven decisions are sometimes at odds with seemingly more circular choices.

At all levels — systems, business and product — the development of specific and actionable metrics is a key accelerator for circularity at scale that allows data-driven decisions to be made, tracked and celebrated. Of course, the operative word is actionable. Quantifying circularity proves valuable only to the extent that the metrics align with planetary boundaries and science-based climate targets.

For many, adopting metrics and methodologies to calculate circularity will not mean starting from scratch. Organizations such as the Global Reporting Initiative and the U.S. Green Building Council are adapting their own standards to incorporate principles of circularity, which will be crucial to ensure alignment with the frameworks and goals that companies already have in place.

As metrics to operationalize circularity mature and scale, it will be important to acknowledge their shortcomings. A myopic understanding of data points and material flows as the key to a circular economy can overlook human, on-the-ground realities — and unintended consequences — of systemic shifts best understood through a qualitative lens.

Ultimately, circularity requires more than closing the loop on materials flowing through the economy. It invites a fundamental shift in business-as-usual towards regeneration, abundance and reimagined relationships with goods, suppliers, customers and one another. Formalized metrics are one point in the constellation of tools, best practices and proof points that will help us get there.


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