Advancing circular economy performance indicators and their application in Spanish companies

Abstract

Current research on the circular economy (CE) reveals that, while the concept and its application have been extensively explored as shown in several case studies, the definition of tools and criteria measuring “circularity” of products, companies or regions are not well-defined. Therefore, indicators for measuring the different levels of a CE (micro, meso, and macro) should be a high priority for stakeholders (governments, companies, NGOs, civil society, etc.) in order to track progress on CE initiatives. However, the increasing interest on CE has caused a still open debate on the conceptualization of CE which hampers the creation of indicators based on a common conceptual framework. As a result, the absence of standard indicators to track progress on circularity is leading to contradiction and misunderstanding, which represents a challenge to the implementation of CE strategies. Thus, this study tries to address this gap by advancing a set of indicators adapted from existing indicators that guarantees simplicity and effectiveness, closely based on indicators proposed by government bodies. This research carried out an exploratory study to formulate the indicators requirements based on literature, refined through experts’ opinion and then they were tested in Spanish companies located in the Basque Country region through an empirical work to assess this theory. A mix of research methods (e.g. semi-structured interviews and surveys) were used to seek applicability of CE indicators for organisations. The study showed that the proposed indicators currently used for assessing the CE at the macro level were applicable at the micro level based on companies’ responses. This fact demonstrated that the indicators serve the purpose of being applicable to companies regardless of the type of economic activity they were in. Also, it shows that indicators used to monitor progress on CE at the macro level can be translated to the micro level. Consequently, it is recommended that the set of CE indicators focused on the methodology proposed in this study should be used across different industrial sectors in order to observe performance in companies to facilitate the transition to a CE model.