Two-thirds of businesses looking to develop more circular business models are failing to use benchmarked and accredited frameworks to measure their efforts, according to a new survey.
DNV, an assurance and risk management provider, surveyed 793 customers in April and May in partnership with the World Business Council for Sustainable Development (WBCSD), a global grouping of more than 200 businesses looking to accelerate a sustainable transition. The partners found that around only one quarter (24.7%) determined the initial level (baseline) of circularity before implementing initiatives, another quarter (26.7%) set specific goals and targets and one-in-five (19.8%) identified performance indicators.
‘Identifying the successful initiatives to scale and communicating transparently on performance becomes infinitely harder without proper metrics,’ says DNV. ‘This is not aided by a total of 65.6% using their own circular measurement framework rather benchmarked frameworks designed by established organisations like the WBCSD and Ellen McArthur Foundation.’
According to says Luca Crisciotti, ceo in supply chain and product assurance for DNV, ‘Growing stakeholder and regulatory pressures such as the EU Circular Economy Action Plan adopted in March 2020 do not seem to have impacted the transition speed significantly. With only 5.9% of the companies indicating a leading approach coupled with the limited uptake of business model innovation, there is much left to be done.’
The survey shows that companies focus more on process and product innovation, such as resource recovery (30.3%) or product life extension (39.6%). Fewer have moved into more advanced business models innovations such as product as a service (17.6%) and sharing platforms (12.5%). Most companies experience cost savings (57.2%) as a main benefit.
‘While the private sector’s commitment to circularity is clear, external communications for their efforts are inconsistent in scope and barometer used,’ says Brendan Edgerton, circular economy director, WBCSD. ‘As investors, customers and regulators increasingly request information on circular performance, those companies equipped to measure, monitor and improve their circularity stand to capture the most value and showcase their true leadership.’
Crisciotti adds: ‘Customers and consumers increasingly require sustainability claims and performance to be well-founded and transparent. Results seem to indicate that performance communication and digital solution application is limited.’