Measuring the Adoption of Circular Economy in Manufacturing Companies: the Proposal of the Overall Circularity Effectiveness (OCE) Index

Abstract

Circular economy (CE) has emerged as a strong contender for illuminating the path toward sustainability. Although companies are seen as the most important agents of change, the definition of goals and indicators for assessing the adoption of CE at the company level is still in the early phases. A company that wants to contribute to the CE, whether due to the ambition of the stakeholders or legal requirements, needs to understand what is really within its responsibilities and sphere of influence. However, measuring and evaluating the performance of circularity is still not a common practice in companies. In this context, this paper presents the development of the Overall Circularity Effectiveness (OCE) index to assess the circularity level of manufacturing companies by analyzing inputs and outputs. The index was developed following the design research methodology (DRM) with interactions between theory and practice, based on literature review, survey with companies, development, testing, and evaluation with companies. The paper also presents an application of the proposed index into a case study and discusses its usability and usefulness, comparing it with the existing company-level CE measurement approaches. The OCE was constructed to be simple to understand, practical to calculate through quantitative measures, relevant to the CE context, and generic to be applied in any type or size of manufacturing company. Although the index was developed to be used by any manufacturing company, it was applied in only four companies and all with material from the technical cycle.

Does circular economy entrepreneurship drive technical capabilities for circular economy performance? The moderating role of environmental dynamism

“…The circular economy (CE) unlike the linear economy plays an essential role within the sustainability paradigm via reducing, reusing and recycling materials to close resource loops, eliminate waste and improve efficient resource utilization (Suchek et al, 2022;Cullen and De Angelis, 2021;Hazen et al, 2021). Baumer-Cardoso et al (2023) further note that manufacturing firms are very essential in the transition toward CE because such companies do not only rely on virgin raw materials but also emit greenhouse gasses and generate enormous waste during production processes. Thus, deepening the knowledge on how manufacturing companies can achieve CE performance is essential.…”

“…, 2021). Baumer-Cardoso et al . (2023) further note that manufacturing firms are very essential in the transition toward CE because such companies do not only rely on virgin raw materials but also emit greenhouse gasses and generate enormous waste during production processes.…”

Determination of Production System Effectiveness Based on Sustainable Global Standards

“…Sustainability measures were being re-designed to provide a measurement of the production system within the link of accountability [1]. Measuring and evaluating the performance of production process sustainability is still not a common practice in some companies [31].…”