MEASURING AND CERTIFYING CIRCULARITY

The rise of metrics and certifications is crucial as they enable the value chain discussions essential to speeding up the transition to the circular economy. In February 2021, consulting firm Deloitte announced an acceleration towards universal metrics for measuring sustainability. A few months earlier, in fact, Cdp, the Climate Disclosure Standards Board (Cdsb), the Global Reporting Initiative (Gri), the International Integrated Reporting Council (Iirc), and the Sustainability Accounting Standards Board (Sasb), all leading organisations for sustainability reporting, had jointly presented a paper with the Impact Management Project, the World Economic Forum and Deloitte, showing progress towards an integrated reporting system with a prototype of climate-related financial standards.

At the same time, the impacts of the social and public health emergency caused by the Covid-19 pandemic have, in part, been a catalyst for the climate change debate and the push towards the Green Deal. At EU level, in her State of the Union speech, European Commission President Ursula von der Leyen reiterated that the priorities of the Green Deal included a goal related to the financial resources needed to achieve the climate neutrality target. In her speech, von del Leyen pledged to allocate 37% of Next Generation EU funds to Green Deal goals and to give a further boost to green finance by raising 30% of the EUR 750 billion Recovery Fund through green bonds. This requirement was the starting point for the European Financial Reporting Advisory Group (Efrag), which, under a mandate from the European Commission, set up a task force dedicated to preparatory work to arrive at a European sustainability reporting standard. These two cases show how, when talking about climate change, sustainability and circularity, shared certifications and metrics are needed.

Cradle to cradle

The Cradle to cradle products innovation institute, an independent, Amsterdam-based non-profit that manages certification, released version 4.0 of cradle-to-cradle certification last year, the most ambitious and actionable standard to date, which defines a product in terms of safety, circularity, and environmental and social responsibility. The standard assesses five categories: material health, which takes into account major global chemical regulations and standards, and the list of chemicals that are not allowed above a certain threshold; product circularity, which includes circular sourcing and infrastructure; clean air and climate protection; water and soil stewardship; and social equity, whose due diligence is in line with the United Nations guidelines for business and human rights.

As Christina Raab, president and CEO of the Cradle products innovation institute, states: "We evaluate the dossiers that companies send us, do audits and reviews, and award them certifications on different levels starting from bronze and going all the way up to platinum. We currently have a community of 450 companies of different sizes around the world: about half are medium-sized companies, the rest are large multinationals and start-ups. Sectors are also mixed: first and foremost, we have fashion and apparel companies, followed by cosmetics, personal care and home cleaning companies. Another relevant sector is building materials and interior design. Finally, we have the packaging sector and, for the first time ever, last year we certified a consumer electronics company, which manufactures loudspeakers". The authority of the C2C certification is also evidenced by the fact that the US Environmental Protection Agency (Epa) includes it in its "Recommendations of specifications, standards, and ecolabels for federal purchasing" and that it contributes to international building certifications such as Leed, Breeam and the Well Building Standard.

Bs 8001 and Afnor

Standards created with circularity in mind raise the issue of business model change, challenging corporate strategies. In particular, Britain's Bs 8001 and France's Afnor XP X30-901 are two certifications that identify implementable circular actions and certify companies' commitment to this direction.

Created in 2017 in the UK by the British Standards Institution (Bsi), Bs 8001 is the first standard that regulates circular economic models, and which companies can refer to in order to integrate into their business model the principle of the three Rs: reduce, reuse, recycle. It is a practical guide with advice and recommendations on best practices for transitioning companies to circular economic models, and while it is British, it can be applied on an international scale to any organisation, regardless of location, size, sector or type. Bsi, which prior to Bs 8001 had already developed a set of standards covering waste prevention, resource efficiency, eco-design and product remanufacturing, also supports organisations in achieving their circularity goals with gap analysis, training and assessment services.

The Afnor XP X30-901 Certification, issued by the Association Française de Normalisation (Afnor), one of the world’s most authoritative certification bodies and present in more than 100 countries, was created as a French national standard, but with the aim of being an international reference point for all companies that, wanting to adopt circular solutions within their production systems, need guidelines to follow. "The Afnor XP X30-901 proposes a 3 x 7 matrix covering the three dimensions of sustainable development (environment, economy, society) and the seven action areas of the circular economy: sustainable procurement, ecodesign, industrial symbiosis, service economy, responsible consumption, life extension, and effective management of materials and products at the end of their life cycle. When initiating a circular economy project, it is necessary to consider all of these elements," says Olivier Cartigny, Afnor project manager, who led the working group that developed the standard. In addition to supporting the adoption of Afnor XP X30-901, Afnor also aims to integrate it with other standards including Iso 9001, Iso 14001 and Iso 45001. This certification is crucial in the process of measuring and certifying circular practices, partly because the Iso Tc 323 technical committee, which will be discussed later, was created under French leadership precisely on the basis of the guidelines developed by Afnor.

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Circular metrics

Several agencies and companies have devised other metrics to measure circularity. Among the most relevant initiatives are the Ellen MacArthur Foundation's Circulytics, a free company-level measurement tool with qualitative/quantitative indicators that, in addition to assessing products and material flows, reveal the extent to which a company has achieved circularity in all its activities; and the World Business Council for Sustainable Development's Circular transition indicators - Metrics for companies. These are indicators that aim to support companies in their transition to circular economy systems, regardless of sector, structure and size. Specifically, the framework of the Wbcsd's Circular transitions indicators (Cti) provides companies with a simple, industry-independent way to measure circularity and guidance on how to reduce primary resource use and waste generation. Elements offered by Cti include, for example, a methodology for measuring the impact of sourcing recycled materials on reducing greenhouse gas emissions, indicators for considering life cycle extension strategies, and guidance to help companies make decisions and prioritise upscaling actions.

These cross-sector metrics are complemented by other measurement systems that target specific sectors, such as the Madaster Circularity Indicator, which looks at circularity in the construction sector by targeting asset owners, project developers, public authorities, architects and builders, and Circle Economy's Circularity Gap Reporting, a scientific methodology developed in collaboration with a committee of leading global academics that measures the circularity of our planet or entire countries. At Italian level, Enel has developed the CirculAbility model, which measures circularity based on five pillars: sustainable inputs, sharing, product as a service, product life extension, and end-of-life.

Iso/Tc 323

There is an abundance of standards and initiatives that very often look only at certain components of circularity, such as  recycling. There is, at present, no agreed-upon global vision of how a company can truly complete the circle and which every organisation can use. To address this shortcoming, back in 2019 Iso, the International Organization for Standardization, which is globally responsible for setting technical standards, created a technical committee dedicated to the circular economy. "The committee members agree that we need to act now in order to develop standards in the circular economy sector as quickly as possible," says Catherine Chevauché, chair of the Iso Tc 323 committee. "This is especially true in developing countries, which have tended to bear the brunt of the wealth and waste inequalities of the developed world."

The technical committee involved, Iso/Tc 323, aims to cover all individual aspects of the circular economy, including public procurement, production and distribution, and end-of-life, as well as broader areas such as behavioural change in society, evaluation, and, again, the creation of a circular footprint or circularity index.

Work is still ongoing; the six cross-cutting standards related to the circular economy are in the midst of development. While a first draft has been submitted to the technical committee for one part, that of Performance-based approach – Analysis of case studies (Iso/Cd Tr 59031), the other three parts concerning Framework and Implementation Principles (Iso/Wd 59004), Guidelines on Business Models and Value Chains (Iso/Wd 59010) and Circularity Measurement Framework (Iso/Wd 59020) are in the preparatory stage, with the first results expected in mid-2023. The creation of the Iso standard for the circular economy is linked with other Iso technical committees dedicated to other somewhat related standards and indicators, such as those for sustainable sourcing and environmental quality and management, through to the sharing economy and sustainable finance. Iso 14001 covers, for example, the standardisation of environmental management systems, which sets the relevant requirements for any organisation. Beyond Iso indicators, another useful tool in a sustainable and circular direction is the EU Eco-Management and Audit Scheme (EMAS), a premium management tool developed by the European Commission for companies and other organisations to assess, report and improve their environmental performance.

An article by Emanuele Bompan & Antonella Ilaria Totaro