Circular-ESG Model for Regenerative Transition

Abstract

This paper presents a novel circular-ESG framework integrating circular economy (CE) principles with environmental, social, and governance (ESG) criteria to address the lack of uniform sustainability measures. We introduce normalized sustainability coordinates (NSCs) as a comprehensive metric for sustainability performance, reconciling economic development with environmental balance. The circular-ESG model employs a four-quadrant Cartesian system to map business model impacts on natural and socio-economic systems, ranging from linear open-loop to circular closed-loop ESG models. This framework enables empirical analysis through data-driven NSCs (−1 to 1) and establishes temporal key performance indicators. By incorporating the Human Development Index within ecological limits, the model promotes regenerative development aligned with planetary boundaries. The circular-ESG approach offers a practical tool for businesses, households, organizations, and policymakers to navigate sustainable development complexities. This integrated framework fosters innovation and supports a just transition towards regenerative practices, providing a roadmap for high human development within ecological limits. The circular-ESG model advances sustainability science and management, contributing to the discourse on measuring and implementing sustainable practices across sectors and scales. The model is currently conceptual; we encourage empirical validation and further research to explore its practical applications and effectiveness in real-world scenarios. While the provided examples of use cases serve as conceptual demonstrations, future research could empirically apply the model to real-world data.