Measuring the Environmental Sustainability of a Circular Economy

Abstract

“What gets measured gets managed” - this quote by Peter Ducker reveals a pitfall for the targeted transition towards a more sustainable, circular economy. Today, mass-based indicators, such as recycling rates, are used to assess the circularity of individual products, firms and of entire countries. These indicators, however, fail to cover the environmental perspective – one of the most mentioned reasons to move from a linear to a circular economy. Here, we propose a complementary environmental-impact based indicator that measures the environmental value retained through reuse, remanufacturing, repairing or recycling. The indicator extends the focus from end-of-life to the entire life cycle and includes substitution of primary materials. Furthermore, it allows for monitoring the transition towards a circular economy from an environmental and possibly economic and social perspective. We provide three examples that highlight the application of the indicator and also reveal that common beliefs about the environmental performance of the circular economy are sometimes misleading and counter-productive.