How to measure circularity? State-of-the-art and insights on positive impacts on businesses

Abstract

As the circular economy (CE) grows, it is necessary for companies to prepare for their transition from linear to circular, targeted to generate a positive business impact. Therefore, the aim of this study is threefold. First, to map what high impact research on circularity indicators and CE actions is reporting. Second, to point out challenges and opportunities in the application of circularity indicators. Third, to discuss implications for businesses wanting to generate positive impacts. To that end, a systematic literature review was carried out on the ScienceDirect, Scopus and Web of Science databases. Existing research on circularity indicators is based on either circularity measurement indices (0–100%) or circularity assessment tools, which are developed for one or more levels of application within micro, meso, and macro. The main challenges for establishing circularity indicators are linked to the lack of standardization on how to measure circularity and on providing clear guidance on how the indicator can and should be used. The main opportunities lie on bringing to life the concept of circularity through practical applications and reveling opportunities for internalizing flows. Internalizing flows can lead to a positive business impact and measuring circularity can be a tool for business management on top of bringing about circular-economy-related benefits.