EU unveils ground-breaking circular economy metric

European companies can now measure how well their products and business models perform in the context of a circular economy thanks to a new tool developed by the Ellen MacArthur Foundation.

The EU Circularity Indicators Methodology can be used to measure how effectively a business is making the transition from ‘linear’ to ‘circular’ models, by analysing the material flows of its products and processes.

The first-of-its-kind tool is the culmination of a two-year research project funded by the European Commission’s LIFE programme, with additional input from materials information technology firm Granta Design and sustainability consultancy group Anthesis. 

Craig Simmons, chief technical advisor at Anthesis, said: “For the first time ever, companies can turn to an established metric to see how well they are making the transition from linear to circular models. This creates more opportunities to benchmark success, develop better products and reduce the risks of relying on finite materials.”

System revolutionaries

In practice, the circular economy approach to business decouples economic growth from the consumption of finite resources. ‘Closed-loop’ supply chains can be created through improved product design, extending asset life, re-use and recycling. Studies suggest that efficiencies delivered by the circular economy could be worth in excess of a trillion dollars a year, generating hundreds of thousands of jobs in processes.

Big businesses such as DHL, Ikea, Unilever and Carlsberg are all embracing the circular economy ethos in some shape or form, but there is still a lack of critical mass to spark a full, global transition.

This new tool can be used in the designing of products, procurement decisions and internal reporting. Firms can analyse and evaluate their products and design processes against a range of environmental, regulatory and supply chain risks.

Products can be assessed through all stages of their lifecycle, from virgin feedstock to manufacture, recycling and re-use. They are then given a score based on their ‘circularity’. Additional ‘risk’ indicators can also be used with the new tool; to take into account additional factors such as material price variation, supply chain risks and toxicity.

Circular Economy Package

Circularity Indicators Methodology builds on existing EU waste legislation such as the Landfill Directive and WEEE Regulations. At a policy level, the circular economy movement has been held up by the scrapping of the much-awaited Circular Economy Package, which is expected to propose specific recycling targets for Europe’s Member States.

The Commission is instead expected to unveil a ‘more ambitious’ package later this month, which will reportedly include country-specific waste-reduction targets and a specific roadmap for the implementation of closed-loop business processes. 

Luke Nicholls

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