Research

Towards the ex-ante sustainability screening of circular economy initiatives in manufacturing companies: Consolidation of leading sustainability-related performance indicators

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Abstract

The concept of Circular Economy proposes an innovative alternative model to counter the failed support of society's current ‘linear’ mode of operating, with the goal of achieving increased sustainability. A wide range of approaches have been proposed to help businesses plan for and implement circular strategies. Despite positive claims about the potential of circular economy implementation to simultaneously reduce environmental burden whilst enhancing business benefits, not all circular solutions (or circumstances) bring the desired positive effects, especially in the broader context of sustainability. For this reason, any decision to adopt a circular economy strategy ought to be carefully assessed with regards to its potential sustainability performance, prior to its implementation. While several attempts to measure or estimate the sustainability effects of circular economy strategies have been made, they often deploy methodologies that rely on multifaceted input information. Furthermore, such efforts provide results by means of employing lagging indicators, which are complex and may not be easily understood by decision-makers in a manufacturing company context. This paper provides a review of leading sustainability-related performance indicators, identified through a systematic literature review. As a result, more than 270 leading performance indicators have been retrieved and consolidated in a database. Subsequently, these indicators have been classified according to three categories: sustainability dimensions; business processes; and circular economy strategies. The key findings show that leading sustainability-related performance indicators are available for a wide range of Circular Economy strategies, thus making it possible to measure the potential sustainability performance of circular strategies prior their implementation. Furthermore, the specificities of leading indicators available for each classification category are presented, several gaps are identified and direction for future research is established.