In the early days of corporate sustainability, strategies were a lot different to what we tend to see today. Focus areas were often based on gut feel, simply low-hanging fruit, or what competitors were doing “plus a little bit”. Hard targets were few and far between. And where they did exist reflected what made for a nice – and often disappointingly low – round number.
Fast forward to today and things are very different. As sustainability has been mainstreamed into corporate strategy, measurement and metrics have become crucial. Likewise, roadmaps are increasingly ‘science-based’ and address the most material aspects of an organisations impacts, not just those that are most visible. Targets are aligned to overarching frameworks such as the Sustainable Development Goals and Planetary Boundaries.
The change has been welcome because all of the science tells us that meaningful action on sustainability is urgent. Sustainability strategies must quantify and focus on reducing an organisation’s most significant impacts – both in terms of the size of the impact and the importance of that impact for humankind living within our environmental limits.
Which brings us to circular economy. The term is not new, but is rapidly gaining traction in the sustainability community as the next frontier for action. Companies are increasingly looking to develop circular economy strategies and governments are underpinning policies with circular principles.
But with all this circular economy activity has come a concerning trend that mirrors the lack of data and evidence of sustainability strategies’ early years. Is this because no metrics and measurement for circular economy exist? We know this is not the case. From general methods like material flow analysis and life cycle assessment, to tools like Circulytics, Edge’s own Circularity Tool and standards like the Global Reporting Initiative. We know that metrics and measurement options are available.
Why then are we seeing organisations engage in ‘lightweight’ circular economy strategy development? We believe it is due to a lack of consensus on which metrics to apply in which situations. How do we move forward with the information that we have? What makes a good metric and how can you choose what to focus on? Here are our suggestions:
- Measure what matters – the metrics you choose should capture information on your most significant impacts. Your significant impacts are determined by both the size of the impact and the importance of the environmental or social issue for overall wellbeing. We know that we are closer to some planetary boundaries than others and this should inform your areas of focus.
- Know what your metric covers – many circular economy metrics will give you part of the story but not the full picture. They might tell you the amount of resources that avoid landfill, but not whether those resources are put to their highest use (that is the difference between ‘downcycling’ and ‘upcycling’). Or how much environmental impact is incurred through reprocessing the material for its second life. While it may not be possible to measure everything, you should be clear the blind spots of the metric that you choose.
- Know when to use it – different metrics will be more applicable at different stages of your journey or at different levels of analysis. When assessing your overarching strategic direction, a circularity gap measurement may be helpful. When you come to the stage of evaluating different initiatives, you may require greater detail of material flows as well as environmental and economic impacts.
- Ensure it is ‘circular’ – at a minimum circularity metrics need to take in to account the full life cycle of a product or service. It is not accurate to talk to recycling rates in isolation, as diverting waste from landfill is not the same as circularity. Recycling rates may form part of your circular story, but they are not sufficient on their own.
- Make it actionable – the metric should give you information that allows you to improve your impact.
- Make it data-centred and replicable – in order to measure your progress over time you will need the data to be meaningful, accessible and the calculations able to be rerun.
Edge recently adopted “catalysing change through Science, Strategy and Storytelling” because we believe that those three pillars are non-negotiables in sustainability. With circular economy, as of today, there’s a whole lot of storytelling, and a sprinkling of strategy, but not nearly enough science.
That’s why we’re delighted to see that ALCAS are starting a project to help guide circular economy practitioners looking to insert some rigour into their work. And we’re excited that Planet Ark have made circular economy metrics a focus area for the new ACE Hub. We’ll be diving into that too! We are also partnering with the Green Building Council of Australia (GBCA) to help define the circular metrics and measurement processes that are most relevant to the property industry.
Underpinning all our work, for big and small clients, is robust data and measurement that quantifies impacts of products and services across the whole life cycle. We simply can’t afford for circular economy to be a new buzzword that distracts us from real action. To avoid the pitfalls that sustainability strategy succumbed to in its early years we must ensure that metrics and measurement underpin circular economy from the very start. Each organisation needs to identify sustainability metrics that meet their needs and set measurable, strategic targets that address their big impacts.
If you’d like to chat about circular economy solutions or curious where to get started, get in contact with Jenni Philippe, our Circular Economy Principal.
Head of Circular Economy and Life Cycle Thinking | Principal Consultant