Businesses are being increasingly pressured to start making the transition from their current polluting economy towards a circular economy (CE) to pursuit a sustainable industry. Indicators for CE play a key role in this transition, enabling the measurement and control of this development. However, the scattered landscape of micro level CE indicators, which varies in purpose and scope, and their ambiguity in measuring environmental and social impact, complicates this transition. Circular consultants are being faced with these challenges when advising the right CE indicator to companies.
This study aims to provide CE consultants the tools to find an indicator that measures CE holistically and that fit their client’s profile. A literature review and interviews with 5 different circular consultants shows that many CE indicators are focused on material efficiency, leaving out aspects that are key for measuring environmental impact such as emissions and pollution. Additionally, social aspects are often not included in CE indicators even though the social dimension of CE is crucial for reaching a sustainable industry. At last, the literature review shows that CE indicators differ in characteristics such as purpose (such as learning or decision-making), their maturity in CE (from beginner to advanced), and data requirements.
Insights from the literature review and from the five interviews with different circular consultants, have led to the development of three tools: a checklist of sub-indicators for CE indicators to analyse their contribution to measuring environmental impact, a checklist of social indicators that are relevant for CE, and a framework to categorize CE indicators on six categories: measurement level, purposes of measuring, company’s maturity in CE, life cycle focus, ease of application and data requirements. The checklist for environmental impact and the categorization framework are applied to five CE indicators chosen from literature. The checklist provides an overview of sub-indicators present and missing in the CE indicators of analysis. Additionally, the sub-indicators in the checklist is translated into a questionnaire for a hypothetical company, to check its practicality. The framework shows that there are notable differences between the five CE indicators: in their purpose, life cycle focus, data requirements and ease of application.
Further work is required to investigate the tension between the CE indicator checklist for environmental impact and the ability of organizations to pick and choose CE indicators – which can be financially driven. Secondly, future case studies could help validate the effectiveness of the indicator checklist for environmental impact and the framework in assisting circular consultants in choosing a suitable and holistic CE indicator for a manufacturing company.