2024 is shaping up to be the year of the circular economy. The environment ministers of all Australia’s states and territories have agreed to work with the private sector to achieve a circular economy by 2030. The Ministerial Advisory Committee will publish the National Circular Economy Framework for Australia in 2024. Circular economy will also be included in the National Reconstruction Fund and six sector plans for energy, industry, buildings, transport, resources and agriculture.
New Zealand is currently developing its Circular Economy strategy (and thinkstep-anz’s Head of Circular Economy Jim Goddin is part of the consortium leading the research). Becoming more circular is also a big part of Europe’s Green Deal and new European Sustainability Reporting Standards (ESRS).
There is wide agreement that a circular economy is one that designs out waste and pollution, keeps resources in use for as long as possible, and then recovers and repurposes products and materials at the end of their lifecycle.
However, there is less agreement on how this looks for a business and how these activities can be measured. While some companies use the term ‘circular economy’ synonymously with recycling, others are making significant progress in designing long-lasting products that can be repurposed, remanufactured, recycled, or reintroduced to the environment. But without a common metric, it's hard for consumers to tell how successful a business is at reducing waste and consuming fewer non-renewable resources.
Developing an ISO standard for circularity
This is going to change. The International Organization for Standardisation (ISO) is currently finalising its first standards on the circular economy. A team (including our Jim Goddin) is developing frameworks, guidance, supporting tools and requirements to implement the standards.
Jim has previously worked with the Ellen McArthur Foundation, one of the leading organisations advocating for the circular economy, to develop the Material Circularity Indicator (MCI). This tool measures how well a product or business avoids consuming non-renewable resources and producing waste.
MCI the first metric of its kind
The MCI allows us to compare different circular economy strategies. Published in 2015 and updated in 2019, it was the first tool of its kind and provides a single metric that compares materials, products and even different business models. Crucially, the methodology covers all the different circular economy strategies, so recycling-based models can be compared with durability, reuse, remanufacturing and bio-based circular solutions.
More than 100 methodologies
Others were hot on the heels in developing new ways to measure circularity. There are now more than 100 different methodologies out there, mostly developed by university researchers or proposed in research papers. However, only a handful of methodologies are used by industry. Apart from the MCI, businesses are using Circulytics, Circular Transition Indicators (CTI) and the Circularity Gap Reporting Initiative (CGRi). None of these provides a pathway to certify a product or organisation. The Cradle to Cradle® standard is still the only player in the game here. (We can help with this, too!)
Creating a common frame of reference
Under ISO TC323, working groups are currently developing six standards. The work – particularly ISO59020 Measuring and assessing circularity, the Standard Jim has been working on – aims to bring the different metrics under a common frame of reference.
ISO59020 considers the broad range of efforts to measure the circular economy but doesn’t seek to replace tools such as MCI and CTI. Through a common frame of reference existing methodologies can be compared. The Standard takes a broad holistic view, establishing links to many of the well-established environmental and social metrics that businesses need to use alongside circularity metrics.
Standards are nearing release
The new circular economy standards are currently at various stages of development. The ISO has approved some, like ISO/DIS 59004 Terminology, Principles and Guidance for Implementation and ISO/DIS 59020 Measuring and assessing circularity, for registration as Final Draft International Standards (a big milestone for them). Meanwhile, other standards like ISO59040 Product Circularity Data Sheets are just beginning their journey.
Developing international standards typically takes several years, as it takes time to consult, draft and build consensus. While there are no specific timeframes for when the Standards will be published, businesses, policymakers, and other stakeholders should watch out for them to be released soon.
What businesses will gain from ISO standards for circularity
Businesses will benefit from standards like ISO59020 by having a common framework so they can quantify how circular their products and systems are, make them more circular and communicate this without ‘greenwashing’.
By having a recognised standard, businesses can start to place more trust in these metrics and work on certifications and standardised evidence for industries. And consumers will benefit by knowing how to support the shift to a more circular economy.