Abstract
Circular economy (CE) is considered a vital model to tackle resource scarcity and reduce waste by promoting strategies that redefine production and consumption systems. Industrial actors integrate CE principles in their strategic and operational practices to overcome these challenges, simultaneously aiming at enhancing their sustainability performance. Despite numerous frameworks to guide organizations in innovating towards CE, very few have embedded explicit sustainability considerations to assist practitioners in understanding the potential sustainability performance of the CE initiatives early in the development process. To assist a structured process of measuring sustainability performance, the main goal of this paper is to propose a procedure for a systematic selection of suitable leading performance indicators to support an informed sustainability-oriented decision-making process. To fulfill this aim, a hypothetical-deductive approach has been followed to, firstly, develop the selection procedure, and secondly, evaluate and improve it using a case study approach. The findings reveal that the procedure enables a systematic selection of relevant indicators by taking into account the manifold combinations of CE strategies and business processes, characteristics of the company and its sustainability objective. Different from many other approaches, the novelty lies in relying on a dynamic, as opposed to ‘prescriptive’, indicator selection process to induce learning about sustainability considerations significant for a particular CE initiative and corporate context.
Highlights
A challenging and fast-changing global market pushes companies to become proactive by exploring and exploiting new mechanisms to enhance their competitive advantage
To assist a structured process of measuring sustainability performance, the main goal of this paper is to propose a procedure for a systematic selection of suitable leading performance indicators to support an informed sustainability-oriented decision-making process
Different from many other approaches, the novelty lies in relying on a dynamic, as opposed to ‘prescriptive’, indicator selection process to induce learning about sustainability considerations significant for a particular Circular economy (CE) initiative and corporate context
Summary
A challenging and fast-changing global market pushes companies to become proactive by exploring and exploiting new mechanisms to enhance their competitive advantage. Competitive advantage is rooted in a company’s capability to manage tangible and intangible resources [1], constantly responding to global demands and issues, including natural resource constraints, pollution and fair wealth distribution. It is no longer a question of whether the pursuit of an economic activity ought to be done sustainably, rather it is a process of exploring (what), planning (where) and implementing (how) various sustainability strategies. Along the process, manufacturing companies in Europe have shown a significant improvement in reducing their environmental impact per economic output generated [2], the challenge is still great, with respect to minimizing the impact, when taking into account upstream (e.g., supply of resources) and downstream activities (e.g., end of life processes). CE entails strategic transformation, by means of which the industries will be able to create new revenue streams and retain the value embedded in their products and assets for longer [5]
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