10.2 Measuring circularity at product and company levels
3 min read•august 9, 2024
Measuring circularity is crucial for businesses transitioning to a circular economy. This section covers tools and methods for assessing circularity at the product and company levels, including comprehensive evaluation techniques, certification frameworks, and material flow analyses.
Environmental impact metrics play a key role in circularity measurement. We'll explore environmental accounting methods and specific indicators for carbon footprint, water usage, and biodiversity impact to provide a holistic view of circular performance.
Circularity Assessment Tools
Comprehensive Circularity Evaluation Methods
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- (LCA) analyzes environmental impacts throughout a product's entire lifecycle from raw material extraction to disposal
- Assesses multiple impact categories (greenhouse gas emissions, water usage, toxicity)
- Provides quantitative data for decision-making and improvement strategies
- Follows standardized methodology outlined in ISO 14040 and 14044
- Circular Economy Toolkit offers online self-assessment for businesses to identify circular opportunities
- Evaluates product design, business models, and reverse logistics
- Generates tailored recommendations for improving circularity
- Includes case studies and best practices from various industries
- Circulytics developed by Ellen MacArthur Foundation measures company-wide circularity performance
- Assesses both material and non-material flows (energy, water)
- Evaluates enablers like strategy, innovation, and external engagement
- Provides benchmarking against industry peers and personalized insights
Product Certification and Design Frameworks
- Cradle-to-cradle certification evaluates products based on circular economy principles
- Assesses five categories: material health, material reutilization, renewable energy, water stewardship, and social fairness
- Offers different certification levels (Basic, Bronze, Silver, Gold, Platinum)
- Encourages continuous improvement and innovation in product design
- Circular design strategies focus on longevity, repairability, and recyclability
- allows easy separation of components for repair or recycling
- Modular design enables upgrading and replacement of individual parts
- Use of standardized components facilitates repair and remanufacturing
Material and Product Analysis
Material Flow Assessment Techniques
- Material flow analysis tracks the movement of resources through a system
- Identifies inputs, outputs, and accumulation of materials within defined boundaries
- Helps pinpoint inefficiencies, waste streams, and potential circular opportunities
- Can be applied at various scales (product, company, industry, or national level)
- Product circularity data sheet provides standardized information on product circularity
- Includes details on material composition, recyclability, and disassembly instructions
- Facilitates communication along the value chain and supports circular decision-making
- Enhances transparency and traceability of circular attributes
Circular Performance Indicators
- Circular transition indicators developed by World Business Council for Sustainable Development
- Assesses circularity at company and product levels
- Measures inflow (% of circular inputs), outflow (% of materials recovered), and water circularity
- Calculates circular material productivity (economic value per unit of linear flow)
- Resource efficiency metrics evaluate material and energy use optimization
- Material intensity measures amount of material used per unit of product or service
- Energy intensity assesses energy consumption relative to economic output
- Water use efficiency evaluates water consumption in relation to production or value created
Environmental Impact Metrics
Comprehensive Environmental Accounting Methods
- Environmental profit and loss account monetizes a company's environmental impacts
- Quantifies and values environmental externalities across the entire value chain
- Includes impacts on air quality, water use, land use, and greenhouse gas emissions
- Enables comparison of different environmental impacts using a common metric (monetary value)
- Natural capital accounting incorporates ecosystem services into financial reporting
- Assesses dependencies and impacts on natural resources and ecosystem services
- Helps identify risks and opportunities related to natural capital
- Supports more sustainable decision-making and long-term value creation
Specific Environmental Impact Indicators
- Carbon footprint measures total greenhouse gas emissions associated with a product or activity
- Expressed in carbon dioxide equivalents (CO2e)
- Includes direct emissions (Scope 1), indirect emissions from purchased energy (Scope 2), and other indirect emissions (Scope 3)
- Water footprint assesses total freshwater consumption and pollution
- Includes blue water (surface and groundwater), green water (rainwater), and grey water (water required to dilute pollutants)
- Helps identify water-related risks and opportunities for conservation
- Biodiversity impact assessment evaluates effects on ecosystems and species diversity
- Considers habitat loss, fragmentation, and degradation
- Assesses impacts on threatened species and ecosystem services
- Supports development of biodiversity conservation and restoration strategies
Key Terms to Review (17)
Circularity Index: The circularity index is a quantitative measure that evaluates how well a product or system aligns with circular economy principles by assessing its ability to maintain resources in use, minimize waste, and promote sustainable practices. This index connects directly to the understanding of how circular models differ from linear ones, emphasizing resource efficiency, waste reduction, and closed-loop systems.
Closed-Loop Supply Chain: A closed-loop supply chain refers to a system where products are designed, manufactured, used, and then returned to the producer for refurbishment or recycling, thus minimizing waste and maximizing resource efficiency. This approach emphasizes the importance of integrating reverse logistics with traditional supply chains, enabling companies to create sustainable business models that contribute to a circular economy.
Consumer involvement: Consumer involvement refers to the degree of personal relevance and interest that a consumer has in a product or service, influencing their decision-making process and overall engagement. High levels of consumer involvement often lead to more thoughtful purchasing decisions, greater information search, and increased participation in circular economy practices such as recycling and product repair, which are essential in measuring circularity at product and company levels.
Cost savings through resource efficiency: Cost savings through resource efficiency refers to the financial benefits a company realizes by optimizing the use of materials, energy, and other resources. This approach not only reduces waste but also lowers operational costs and enhances overall sustainability. The focus on maximizing resource efficiency is integral to creating circular economy business models, which promote longevity and value retention throughout product life cycles while aiming to measure circularity effectively at both product and company levels.
Design for Disassembly: Design for disassembly is an approach in product design that facilitates the easy separation of components at the end of a product's lifecycle, promoting reuse and recycling. This method not only enhances resource recovery but also aligns with principles of eco-design and circularity by ensuring that materials can be efficiently processed or reused, minimizing waste and environmental impact.
Ellen MacArthur Foundation's Circular Economy Framework: The Ellen MacArthur Foundation's Circular Economy Framework is a structured approach designed to help organizations transition from traditional linear business models to circular ones. This framework focuses on maximizing resource efficiency and minimizing waste, highlighting the importance of designing for longevity, reuse, and recycling. It aims to create systems where materials are kept in use, thus enhancing sustainability and reducing environmental impacts.
End-of-life recovery rates: End-of-life recovery rates refer to the percentage of a product's materials that are successfully recovered and recycled, reused, or otherwise repurposed at the end of its useful life. This concept is crucial for understanding how effectively a company or product contributes to a circular economy, which aims to minimize waste and make the most of available resources.
Environmental Product Declarations: Environmental Product Declarations (EPDs) are standardized documents that communicate the environmental performance of a product based on a life cycle assessment (LCA). EPDs provide transparent, comparable, and reliable information about a product’s environmental impact, making it easier for businesses and consumers to make informed decisions regarding sustainability. By evaluating multiple environmental indicators, EPDs help in measuring circularity at both product and company levels, fostering accountability and improvement in environmental practices.
ISO 14021: ISO 14021 is an international standard that outlines the requirements for self-declared environmental claims made by organizations. It provides guidelines for companies to communicate their environmental performance accurately and transparently, ensuring that claims are substantiated and not misleading. This standard is crucial for measuring circularity at both product and company levels, as it helps businesses assess and report on their sustainability efforts effectively.
Life Cycle Assessment: Life Cycle Assessment (LCA) is a systematic method for evaluating the environmental impacts of a product, process, or service throughout its entire life cycle, from raw material extraction to disposal. It provides valuable insights into the resource usage and environmental consequences of various stages, aiding in decision-making for sustainable practices and circular economy strategies.
Material circularity metric: The material circularity metric is a measurement tool that assesses the extent to which materials used in products are reused, recycled, or repurposed, thereby reducing waste and promoting sustainability. This metric helps companies evaluate their resource efficiency and environmental impact by quantifying how much of their material inputs are kept in use in a circular economy model. It also facilitates comparison across products and companies, encouraging continuous improvement in circular practices.
Percentage of recycled materials: The percentage of recycled materials refers to the proportion of materials used in a product that have been sourced from previously used products, rather than virgin resources. This metric is crucial in assessing the sustainability of products and plays a vital role in measuring circularity, as it reflects a company's commitment to reducing waste and minimizing the consumption of new raw materials.
Product-as-a-service: Product-as-a-service (PaaS) is a business model where products are offered to consumers as a service rather than sold as physical goods. This model encourages manufacturers to retain ownership of their products, allowing them to focus on delivering value through use while promoting sustainability by minimizing waste and resource consumption.
Resource recovery: Resource recovery refers to the process of extracting valuable materials or energy from waste products to be reused or recycled in the production of new goods. This approach minimizes waste, promotes sustainability, and enhances the efficiency of resource use within economic systems, particularly emphasizing the transition from linear to circular models.
Stakeholder collaboration: Stakeholder collaboration refers to the process in which different individuals, groups, or organizations work together to achieve shared goals and objectives, particularly in the context of sustainability and circular economy initiatives. This collaboration is essential for overcoming challenges associated with transitioning from traditional linear systems to circular ones, as it fosters innovation, resource sharing, and mutual support among various stakeholders.
Value creation from waste: Value creation from waste refers to the process of transforming discarded materials or byproducts into valuable resources, products, or services, contributing to a more sustainable and circular economy. This concept emphasizes not only the reduction of waste but also the potential for innovation and economic growth by repurposing materials that would otherwise contribute to environmental degradation.
Waste Minimization: Waste minimization refers to the process of reducing the amount and toxicity of waste produced, aiming to lessen the environmental impact and improve resource efficiency. This approach is crucial for promoting sustainability and circular economy practices, as it encourages the efficient use of resources, reduction of waste generation, and the facilitation of recovery and reuse.