The corporate reporting landscape is a complex and evolving space – influenced by voluntary and mandatory requirements designed to support a variety of objectives, from economic and financial performance, to environmental and social impact.
While sustainability reporting practices have evolved over time inline with a variety of standards and frameworks developed by groups such as the Global Reporting Initiative (GRI), the Taskforce on Nature-related Financial Disclosure (TNFD), and CDP, the measurement and reporting landscape for circular economy related efforts is still in its infancy.
In Europe, the focus on circular economy related reporting has accelerated due, in part, to the inclusion of circular economy in the mandatory Corporate Sustainability Reporting Directive (CSRD) and related European Sustainability Reporting Standard (ESRS 5) on Resource Use and Circular Economy (the first legislative circular economy reporting requirement). In parallel, the International Organization for Standardization (ISO) has recently published its ISO 59000 series on circular economy, including ISO 59020 on Measuring and Assessing Circularity Performance.
Earlier this year, the Ellen MacArthur Foundation (EMF) published a guidance document on ‘Navigating the Circular Economy Reporting Landscape’. As summarized by EMF:
“Without measurement, there is no data with which to prove successes or demonstrate the economic rationale for shifting to circular business models. By reporting this data, businesses can show their circular business practices are helping to tackle global challenges, such as climate change, biodiversity loss, waste, and pollution. Reporting on circular economy performance also helps direct policy-makers towards interventions that are most impactful.”
After an extensive analysis of standards and reporting frameworks, EMF’s guidance document provides a useful performance measurement framework (i.e., metrics matrix) across four circular economy dimensions that are mapped against the three circular economy principles – resulting in 10 ‘metrics groupings’ (see figure below).
To show leadership on measuring and reporting circular economy efforts, EMF recommends that companies:
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