Sustainability screening as a decision support for early stage circular economy development: Moving the sails of circular economy in the direction of sustainability

Abstract

As the urgency of tackling global issues as climate change, resource depletion and biodiversity loss becomes apparent, manufacturing companies are among many other actors in attempting to find new approaches to create economic and societal value, whilst eliminating adverse environmental impact. Circular economy proposes an innovative alternative approach to counter these negative global effects, by offering the opportunity to manufacturing companies to explore how to capitalize on retaining the value embedded in products and operations for longer, thus optimizing the economic and environmental costs and benefits. This notion of ‘circularity’ has made circular economy attractive for many businesses, who increasingly see circular economy practices as a means towards achieving greater sustainability benefits. While academic studies provide heterogeneous findings, regarding whether and to what extent circular economy brings positive economic and environmental gains, a comparatively underrepresented contribution to social sustainability is widely acknowledged. Considering the rapid uptake of circular economy by the manufacturing industry, it is imperative to support the early stages of circular economy development by integrating economic, environmental and social considerations for a holistic sustainability decision-making process. Within this context, this research aims at proposing a sustainability screening framework for circular economy. The framework acts as a decision support to enable integration of economic, environmental and social aspects of the triple bottom line perspective into the early stages of circular economy development within the manufacturing industry. The framework constitutes several fundamental elements, such as a leading indicator approach to measuring sustainability performance, a structured procedure to select relevant indicators for sustainability screening of circular economy initiatives and a trade-off navigation framework to support decision making between conflicting sustainability indicators within the screening. The ultimate goal is to support the early development stages by enabling a comparison of circular and non-circular initiatives, integration of improvements and further development of an initiative with the highest sustainability potential. In this PhD thesis, a leading performance indicator approach is used as a theoretical foundation to support measurement of potential economic, environmental and social performance, due to its usefulness in the early development stages. This theory supported the development of an indicator database and a procedure for systematic selection of indicators for corresponding circular economy initiatives. The challenge of making trade-offs, observed during empirical work in manufacturing industry, led to the proposal of the trade-off navigation framework, which aims at supporting sustainability screening by providing a structured approach to navigating conflicting sustainability indicators and facilitating decision analysis of the proposed initiatives and decision objectives. The research is built on three studies that were conducted to respectively address: i) leading performance indicators as a support for early stage performance measurement for economic, environmental and social aspects, including their applicability for circular economy measurement (Study A); ii) proposal and evaluation of the indicator selection procedure and a user guide for the measurement of circular economy initiatives from the triple bottom line perspective (Study B); iii) proposal and evaluation of the trade-off navigation between conflicting sustainability measures (Study C). This research and corresponding studies were designed following Design Research Methodology (DRM), which provided a framework to carry out design-oriented practical research, combined with a theory-driven approach for the analysis and development of the theory within the field. The main results from the thesis, documented both in the main body and in the four appended papers, include: i) a database of more than 270 leading performance indicators classified according to economic, environmental and social aspects, business processes and circular economy strategies (Study A); ii) a structured procedure for indicator selection and a user guide to support the measurement of circular economy initiatives from a triple bottom line perspective (Study B); and iii) a structured approach to support decision analysis and trade-off navigation between conflicting sustainability measures (Study C). These results were integrated as key elements in the framework for sustainability screening of circular economy initiatives, which is expected to support a ‘hands-on’ approach to measuring sustainability performance of the proposed initiatives and integrating sustainability considerations early in business activities alongside other ‘traditional’ criteria. Overall, the main aim is to support the design and selection of the circular economy initiative that maximizes beneficial outcomes within all dimensions of sustainability. Sustainability screening for circular economy is a first attempt to support circular economy development using triple bottom line measures, laying the foundation for necessary future work, to further ensure its usability for uptake by industries in both technical and bio-economic sectors.