Circular economy indicators for organizations considering sustainability and business models: Plastic, textile and electro-electronic cases

Abstract

Circular Economy is the optimal point of sustainability, given that it offers a set of practices capable of generating more sustainable operations, making sustainability feasible in organizations. To measure the innovations brought by Circular Economy, there is a recent need to develop circularity indicators, mainly for micro level (companies and products). Furthermore, the complexity of Circular Economy implies in a set of multi-dimensional indicators instead of a single one. This paper aims to develop a set of indicators linking Circular Economy principles, Circular Business Model and the pillars of Sustainability. The set of indicators was developed based in the hypothetic-deductive approach, following a number of iterations (cycles) and testing the theory in the empirical world. A mix of research methods (e.g. expert consulting, user’s feedback, and case studies) was applied. The proposed indicators should be able to achieve the principles of the Circular Economy, and, at the same time, help to meet the specificities and needs of each circular business model. The main contribution of this paper is the development of a group of indicators, focused in the three dimensions of Sustainability (environmental (from material perspective), economic and social), applied in Circular Business Models to capture the innovations brought by Circular Economy that conventional indicators do not measure. Moreover, they will help any company to identify areas with high importance and potential for improvement, and thus increase Circular Economy performance in an efficient, clear and prompt manner. These indicators were applied in three Brazilian companies which have three different Circular Business Models. The results show that data from economic and social dimensions was not available or was diffused in the companies. It represents a barrier because most of the positive impacts gained with Circular Economy are presented in the social dimension, including job creation, mindset change, etc.