Ellen MacArthur Foundation to build first circular economy metric for business

The Ellen MacArthur Foundation has announced plans to develop a metric tool that can measure how effective a product or company is in making a transitional shift towards a circular economy.

The tool, which the foundation hopes to launch by 2015, aims to support businesses in creating accurate, measurable and consistent parameters for tracking their circularity progress and measuring impact.

The project is being co-led by Granta Design, a world leader in materials information technology. It will bring together a multi-disciplinary team including innovators, academics and business leaders who will test and help refine the measurement system.

The metric will comprise a portfolio of tools for businesses that include measuring circularity at both product and company level, as well as support to help businesses engage with relevant stakeholders and monitor environmental performance improvements.

At present there is no recognised way of measuring business transition to a circular mode of operation. Speaking to edie, Stuart Whitman who heads up the foundation’s Circular Economy 100 programme, confirmed that business demand was behind the initiative.

“We have had interest from businesses on this, they have been asking for such a metric, and we are quite open to working with them on it,” he said.

Whitman acknowledged that while it was a challenging project, he said the foundation would be working with a number of stakeholder groups such as investors, regulators, and trade associations to ensure consistency of approach, and that a number of businesses would be piloting the metric during its development.

One business leader at the forefront of the circular economy agenda told edie that such a tool could prove useful, but cautioned against stifling innovation unnecessarily.

Kyocera’s head of CSR Tracey Rawling Church, who sits on the Circular Economy Taskforce, pointed out that there were already a lot of sustainability metrics out there.

“There’s a bit of an issue we have in that there is just so much reporting to do that it would be nice to spend some of that time on innovation than reporting. But as long as it is something that enables us to make informed decisions and add value to the business, it sounds like a great idea,” she said.

Rawling Church added that inn terms of benchmarking, measuring at product level would more useful – and fairer in some respects, than at company level.

“It’s quite difficult sometimes to address different types of business models … we are all structured in different ways and insource and outsource different things. When you come to choose a product, you can make some really direct comparisons regarding the way that product will be used in your home or organisation,” she maintained.

Responding to this, Whitman said while there would be a tool for product level, there would be more of a methodology at company level, which will effectively allow an organisation to develop a tailored tool according to its own business model.

Last week the foundation launched its latest report at the World Economic Forum annual meeting in Davos, Switzerland, in which it argued that forging more circular supply chains could generate more than £600bn a year for the global economy by 2025.

Maxine Perella

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