In order for a business to be truly prosperous, financial success is not enough. Administrators also must consider the social and environmental impact of their venture. A disregard for the health of the environment can impair the health of the environment. Businesses must become eco-agents on behalf of our planet.
Our present economic model is built around extraction and waste. In this linear model, materials are taken from the earth, products are made, then disposed. This take-make-waste economic model can’t function for the future, as it revolves around the extraction and disposal of finite materials and the invasion of natural ecosystems, resulting in greenhouse gas emissions and biodiversity loss.
What must be adopted is an economic system centred around the recirculation of resources and the regeneration of natural systems. This model, called the circular economy, could help resolve climate change, biodiversity loss, waste, and pollution. The circular economy revolves around a trio of concepts: eliminate waste and pollution; recycle products and materials; and regenerate natural systems.
Circular economy is spanning across public and private sectors. More than 50 global leaders, including leaders of the globe’s largest corporations, policymakers, philanthropists, academics, etc., signed a joint statement in June of last year demanding a transition to a circular economy in reaction to the economic effect of the coronavirus pandemic. In the plastics sector, at least 1,000 organisations have united behind, and are aiming for a shared vision of a circular economy for plastics.
As organisations advance in their campaign to shift away from a linear business model and to put into action real-world changes, metrics important for analysing their success and planning the future of their entities.
To assess whether business activity is attaining the objectives of a circular economy, business leaders require access to information that measures the circular economy performance of their business, in addition to common business metrics.
Measuring circular economy performance also entails the collection of data on factors of a business that haven’t been measured, like the circularity of water flows or physical assets.
One must take into account a company’s efforts to change to a circular economy — to create a portrait of the company’s present circularity, in regards to material flows and business models. And we must consider those concepts that facilitate the transition, like senior leadership buy-in and needed infrastructure — this provides information regarding companies’ circular economy potential.
Initiatives to facilitate circular economy models include the Circular Transition Indicators by the World Business Council for Sustainable Development and the Ellen MacArthur Foundation’s Circulytics tool, now in version 2.0. Broad reporting frameworks like the Global Reporting Initiative also are embedding ideas of the circular economy.
Circular economy measurement is also an ongoing initiative of work for Europe’s new Circular Economy Action Plan. The action plan summons enhanced metrics to assess the progress toward circularity. This monitoring should concern the interlinkages between circularity, climate neutrality, and the zero-pollution ambition. The Bellagio process is an initiative assumed by the Italian Institute for Environmental Protection and Research and the European Environment Agency to meet this need.
The Ellen MacArthur Foundation does its part by developing the company-level circular economy measurement tool Circulytics; put into action circular economy measurement standardisation as a liaison to the ISO technical committee on circular economy; with non-financial reporting standards programs; and with public sector actors in the EU. And their Food initiative integrates a City self-assessment tool for cities to attain a perfect circular economy of foods. The objective is to achieve, once and for all, a perfect circular economy.