Circular Economy and Companies: Understanding the Characteristics and the Challenge of Measurement

Companies are the main actors in the move towards a more circular and less linear economy and need to understand their role and monitor their achievements. As such, defining goals and indicators for assessing the adoption of circular economy (CE) at the company-level is essential. This paper aims to define the characteristics of the CE at the company-level and to evaluate the growing cadre of company-level CE indicators, based on these characteristics. Different from other CE micro-level reviews, this paper focuses on companies and review academic and professional practice literature. The review revealed eight current indicators developed to assess the level of CE adoption in companies, four from academia and four from practice. The indicators were evaluated according to six characteristics of CE from the literature. In general, there is inadequate coverage of holistic CE characteristics among the indicators, as well as clear differences in how academics and practitioners propose that companies approach CE. While academic literature emphasizes the need for a sustainability view for CE indicators, the practice literature is concerned to measure what represents an economic advantage for the business. As a result, none of the eight indicators addressed the CE characteristics in full, mainly due to the lack of standard approaches in water, assets management and social aspects. The circularity indicators intended for companies must be comprehensive enough to capture the characteristics of CE at the company-level while being applied to different types of industry and easy to be adopted.