A new online tool helps businesses go circular

7 Maret 2020

As we reach planetary limits, business circularity is becoming a new normal. Going circular, however, is still a problem for many companies. A new tool by the World Business Council for Sustainable Development is out to address this challenge.

The Circular Transition Indicators (CIT) were created to help businesses zoom into their material flows and optimize them in line with the principles of a circular economy. The process engaged 26 companies, building on their experiences in introducing circular economy into their operations and supply chains.

The tool is positioned as a “simple, objective and quantitative framework that can be applied to businesses of all industries, sizes, value chain positions, and geographies,” providing the benefit of added value inherent in transitioning to a circular business model through better decisions.

Assessing company circularity, formula structure. “A company’s circularity performance is the average between % circular inflow and % circular outflow”. Source: WBCSD / CTI Tool.

Starting with structuring business data, the tool calculates the outcomes of different decisions and arrives at actions that need to be implemented in particular areas. It also allows making data requests while safeguarding partners’ confidential information. The tool, however, is not up to measuring a company’s overall sustainability performance, which is a much more complex task.

The creators hope that the tool will help companies to go beyond incremental actions, “accelerating the transition towards a regenerative and circular economy”. The free version includes one assessment and three accounts while the advanced functionality is a paid option.

Beyond simple guidance, the website has examples of the tool’s real-life applications. For example, Whirlpool, an American home appliance manufacturer, used the tool to compare the circularity performance of its washing machines to that produced by other companies. Based on identifying the share of recycled and recyclable materials in their products, the company set new targets on improving the recyclability of different components in their washing machines.

Royal DSM, a Dutch multinational, used the tool to set the baseline for its circularity performance and start the conversation on the topic with various departments and partners. The company’s CEO Feike Sijbesma hopes that the tool will help companies to “speak the same language” on the road towards circularity.

Gary Reader, head of Clients & Markets at KPMG International, is highly positive about the tool’s potential. “ We believe this is a critical step to accelerating the transition to a circular economy and enabling companies to unlock the trillion-dollar opportunity that a circular world can bring,” he says.

Among other companies that have contributed to the tool are AkzoNobel, Philips, Microsoft, and PWC. The tool was also aligned with GRI, Circle Economy Cradle to Cradle Products Innovation Institution and other partners.

In a landscape where new frameworks, like Circulytics by the Ellen MacArthur Foundation, are filling the niche, this new tool still has to prove its relevance. The key aim is to create a context that facilitates transitions where different tools can coexist rather than compete.

With the world being just 9% circular and our consumer demands superseding what the planet can afford, a better circular economy is a must. Emerging frameworks could help facilitate truly circular business models beyond individual actors, while creating an economy where purpose comes before profit.

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