Wanted: Lead Indicators for the Circular Economy in Organizations

By | 22nd October 2017

The circular economy now has a guiding standard for its implementation in organizations. It is called BS 8001:2017 ”Framework for implementing the principles of the circular economy in organizations – Guide” and was recently launched by The British Standards Institution (BSI, 2017a, 2017b). After having read it, I am amazed by the level of ambition displayed (yeah!) and puzzled by the absence of specific guidance on which indicators to choose for monitoring circular economy progress. The BS 8001:2017 standard hardly elaborates on the link between circular economy strategy assessment and the established industrial ecology tools material flow analysis, material flow cost accounting, and life cycle assessment. Organizations have to find suitable indicators by themselves, which may lead to double work since so many indicators and methods for their quantification are already available. Moreover, that passage of the standard can be read as an invitation to cherry-pick convenient progress indicators that fit the corporate message but that don’t necessarily bring the system closer to the circular economy goals, let alone sustainable development. [To be fair: the standard makes clear at several places that a transition to a circular economy is far from easy, that superficial adoption of circular economy business models is unlikely to lead to the desired change, and that organisations need to ‘turn things on their head’.]

Clearly, there must be a stronger link between material flow analysis (MFA), material flow cost accounting (MFCA), life cycle assessment (LCA), and circular economy strategy assessment to strengthen the scientific basis of the latter. There is a rapidly growing body of scholarly literature on the circular economy concept, suitable business models, policy framings, and indicators. Still, my impression is that the experts of the mentioned MFA, MFCA, and LCA methods have a lot more to contribute to the debate around the circular economy.

I felt motivated to spend a few weeks to write a review of the new standard and highlight its strong and weak points. In the same paper I develop a general system definition for CE indicator development based on MFA, propose a dashboard of possible indicators for circular economy in organizations based on industrial ecology methods, and calculate some examples using the results from previous research on the steel cycle and on material substitution. The result of my work went through two rounds of anonymous peer review and is now published in the journal Resources, Conservation and Recycling under an open source license (Pauliuk, 2017).

The proposed dashboard is linked to a general MFA system definition of a product system, which was built upon the system proposed by Graedel et al. (2011), and which includes the major circular economy flows recycling, remanufacturing, refurbishing, and re-use. The dashboard does NOT contain a specific list of circular economy indicators for organizations. Establishing such a list will require much more road-testing in organizations and in their communication with stakeholders, plus a subsequent consensus-building process similar to the one carried out to formulate the present standard. Instead, the proposed dashboard contains a list of relevant flows and stocks suitable for indicator development, plus some already existing indicators.

Circular economy strategies must be linked to the wider goals of sustainable development as manifested by the UN Sustainable Development goals (SDGs) (UN, 2017), for example, as there is just too much overlap between the two concepts to have them disconnected and running in parallel.

The dashboard therefore not only includes indicators and indicator components that directly relate to the circular economy goals but also those pertaining to the wider focus areas resource efficiency, climate, energy, land use, social impacts, stock and stock growth, and sufficiency. There are 28 indicator and indicator components in total, which is still quite a lot, but I think it is better to have a broad focus at this early stage of the debate about lead indicators for the circular economy in organizations. More scientific contributions are welcome and needed!

Read the full paper here: [Link to paper] (free access)


BSI, 2017a. BS 8001:2017. Framework for Implementing the Principles of the Circular Economy in Organizations – Guide. The British Standards Institution. London.

BSI, 2017b. Developing BS 8001 – A World First [WWW Document]. Br. Stand. Institution. URL https://www.bsigroup.com/en-GB/standards/benefits-of-using-standards/becoming-more-sustainable-with-standards/Circular-Economy/ (accessed 9.5.17).

Graedel, T.E., Allwood, J.M., Birat, J.-P., Buchert, M., Hagelüken, C., Reck, B.K., Sibley, S.F., Sonnemann, G., 2011. What Do We Know About Metal Recycling Rates? J. Ind. Ecol. 15, 355–366.

Pauliuk, S., 2017. Critical Appraisal of the Circular Economy Standard BS 8001:2017 and a Dashboard of Quantitative System Indicators for its Implementation in Organizations. Resour. Conserv. Recycl. Volume 129, February 2018, Pages 81–92. DOI 10.1016/j.resconrec.2017.10.019

UN, 2017. Sustainable Development Goals – 17 goals to transform our world [WWW Document]. URL http://www.un.org/sustainabledevelopment/

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