Measuring the Adoption of Circular Economy in Manufacturing Companies: the Proposal of the Overall Circularity Effectiveness (OCE) Index

Abstract

Circular economy (CE) has emerged as a strong contender for illuminating the path toward sustainability. Although companies are seen as the most important agents of change, the definition of goals and indicators for assessing the adoption of CE at the company level is still in the early phases. A company that wants to contribute to the CE, whether due to the ambition of the stakeholders or legal requirements, needs to understand what is really within its responsibilities and sphere of influence. However, measuring and evaluating the performance of circularity is still not a common practice in companies. In this context, this paper presents the development of the Overall Circularity Effectiveness (OCE) index to assess the circularity level of manufacturing companies by analyzing inputs and outputs. The index was developed following the design research methodology (DRM) with interactions between theory and practice, based on literature review, survey with companies, development, testing, and evaluation with companies. The paper also presents an application of the proposed index into a case study and discusses its usability and usefulness, comparing it with the existing company-level CE measurement approaches. The OCE was constructed to be simple to understand, practical to calculate through quantitative measures, relevant to the CE context, and generic to be applied in any type or size of manufacturing company. Although the index was developed to be used by any manufacturing company, it was applied in only four companies and all with material from the technical cycle.