Measuring Circularity in Business: A Guide to Sustainable Transformation

Jul 27, 2024

Illustration of material flows used in circular transition indicator

Businesses are shifting from a linear to a circular economy model, designed to keep products, components, and materials at their highest utility and value. This transition addresses resource scarcity, environmental impact, and offers economic benefits by minimizing waste and negative impacts. By measuring circularity, companies can better track and optimize their progress towards sustainability goals.

Measuring Circularity

To track progress and identify areas for improvement, businesses must measure their circularity. Two prominent frameworks are the Circular Transition Indicators (CTI) and the Material Circularity Indicators (MCI).

Circular Transition Indicators (CTI)

Developed by the World Business Council for Sustainable Development (WBCSD), the CTI framework provides a universal and quantitative method to assess a company’s circularity across industries, sizes, and geographies. It is designed to be simple, objective, and applicable to all businesses, offering a common language for internal decision-making and stakeholder communication. The CTI framework is now in its fourth edition, reflecting its evolving nature and the growing momentum towards circular economy models.

The Circular Transition Indicators (CTI) framework utilises a seven-step process to help companies measure and improve their circular performance. Here are the seven steps of the CTI process:

Determine the scope and boundaries

  • Clarify the objective for measuring circularity
  • Define the business level for the application (product, portfolio, business unit, site, or company)

Select indicators

  • Choose relevant indicators from the CTI framework based on the company’s objectives.

Collect data

  • Gather necessary data, collaborating across the value chain and with various data owners.
  • Ensure data accuracy and quality

Perform calculations

  • Use the collected data to calculate circularity metrics
  • This can be done using dedicated CTI software or performed offline

Analyse results

  • Interpret and contextualise the results
  • Identify areas for improvement and track performance over time

Prioritise actions

  • Assess the company’s exposure to linear risks
  • Evaluate circular opportunities
  • Formulate business cases for improvement actions

Plan and act

  • Set up and implement an action plan to improve circular performance
  • Establish concrete steps for enhancing circularity

This seven-step process is designed as a continuous improvement cycle, allowing companies to assess and improve their circular performance regularly.

Material Circularity Indicators (MCI)

A tool within the broader ‘Circular Indicators Project’ developed by The Ellen MacArthur Foundation and Granta Design, allows companies to measure the circularity of their material flows. It assesses how restorative a product’s material flows are, from extraction through to end-of-life, and can be aggregated to the company level. This indicator helps businesses identify additional circular value from their products and materials and mitigate material supply and price volatility.

Five Steps to Start Your Circular Data Measurement Journey

  1. Understand the Frameworks: Familiarize yourself with the CTI and MCI frameworks. Use resources like the CTI Academy and MCI toolkit for insights.
  2. Scope Your Assessment: Decide whether to measure the circularity of individual products, product portfolios, or the entire company. Consider relevant value chain positions and geographies.
  3. Collect and Structure Data: Gather necessary data, possibly involving internal stakeholders or value chain partners. Software solutions, such as the CTI tool developed in partnership with Circular IQ to structure data and guide the process.
  4. Analyze and Interpret Results: Apply the frameworks, calculate circularity scores, and analyze results to understand performance. Identify risks, opportunities, and areas for action. The CTI process, in particular, aids in interpreting results and establishing SMART targets to monitor progress.
  5. Communicate and Take Action: Use insights to inform internal decision-making and communicate with stakeholders. Develop a strategy to improve circularity, set actionable goals, and engage employees, customers, and suppliers.

The Strategic Imperative of Circularity Measurement

Measuring circularity is a critical step for businesses committed to sustainable transformation. By leveraging frameworks like CTI and MCI, companies can gain a clear understanding of their circular performance, enabling them to make informed decisions, communicate their progress, and continuously improve towards a circular economy. The journey to circularity is a strategic, data-driven process that requires commitment and collaboration across all levels of a company.

Start your journey today and be a part of the global movement towards a more sustainable, circular world.

Evolveable Consulting: Your Partner in Measuring Circularity

Evolveable Consulting offers expertise in measuring circularity, guiding organizations through CTI and MCI frameworks for accurate measurement and effective implementation of circular strategies.

Contact Evolveable Consulting to start your journey towards a sustainable and resilient future.

Share it on

Read the recent articles

Reverse Logistics: The Backbone of Circular Business Models

In today's era of sustainability and resource efficiency, circular business models have emerged as promising solutions to reduce waste and maximize value. Central to these models is reverse logistics, a critical yet often overlooked component that enables the circular...

read more