New tool from Ellen MacArthur Foundation aims to help companies measure circularity

IKEA and Unilever are among the early testers of a new tool by the Ellen MacArthur Foundation (EMF) that will help companies answer questions about their circularity efforts. Is circularity at the core of the company’s strategy? Is it developing circular products or services? Does it have the right staff to transition toward circularity?

These and other questions are at the heart of the tool announced Tuesday by EMF. It was built to help companies take their circularity efforts to the next level by assessing their entire operations, not just material flows alone. The service, Circulytics, takes a deep dive on a swath of metrics, then assigns a score with recommendations to companies based on their circular performance. 

Seeking to accelerate the circular economy as a multi-trillion dollar opportunity that addresses some of the world’s biggest challenges, EMF saw the need to provide businesses with holistic insights in that direction.

“Many businesses are starting to embrace this opportunity, but for the transition to happen at scale and speed they need accurate data and clear analysis,” Andrew Morlet, CEO of the Ellen MacArthur Foundation, said in a statement. “Our ambition for Circulytics is to help any business, in any industry, anywhere in the world, recognize and unlock the potential of the circular economy.”

A variety of applications already exist to help companies with circular efforts, but they appear to be focused on waste and materials management, or on the framework of life-cycle assessements (LCA).

For instance, Prodigentia from Portugal calls its Circul8 cloud software, used in 20 countries on 4 continents, the industry leader in helping companies track waste along the supply chain. Circular IQ out of the Netherlands features 30 clients including ABN-AMRO and the World Business Council for Sustainable Development, describing a dream of helping business to achieve “100% transparency, zero toxics and optimum use of resources” across supply chains. The GaBi tool from Sphera (formerly ThinkStep) does LCA modeling that involves a Material Circularity Indicator (MCI), built by EMF and Granta Design.

Circulytics divides its work into two big categories: aspects for transforming an entire company; and the inputs and outputs of materials and energy across operations. The former “enabling” category is the one least addressed by existing third-party circularity applications, although it is addressed by legions of sustainability consultants. It looks at strategy and planning; people and skills; systems, processes and infrastructure; innovation and external engagement. The score results from weighing all of those factors together.Circulytics sample scorecard

Circulytics is not a fully automated smartphone app or piece of desktop software that works in real time. Instead, it combines online data collection with human insights on the backend. Companies that use the tool start by filling out an in-depth, web-based questionnaire that takes a deep dive into business operations and intentions. EMF may take up to a month to review data and results before sharing a scorecard and commentary-laden report with a company.

The foundation recognizes that currently it may be difficult or even impossible to quantify the ROI of a circular strategy, not to mention the results of attempts to design out waste and keep materials and products in use while generating revenue. It’s equally vexxing to understand what to improve and how to plan ahead.

“[Circulytics] will provide comprehensive tracking of company progress against key measures and deliver unprecedented clarity about circular economy performance, opening up new opportunities to generate brand value with key stakeholders,” EMF says.A sample score chart and industry benchmark from Circulytics

A wide array of companies were involved in early testing, including Ingka/IKEA and Unilever. “Moving to a circular economy requires businesses to rethink everything they do. As we are making this transition, Circulytics will help us to pinpoint where we have more to do,” Unilever CEO Alan Jope said in a statement.

Additional participants in testing include several companies in energy (Enel, Connected Energy and Hera Group), a couple in chemicals (BASF, Solvay) and two in the pallet business (Brambles, CHEP Europe). Companies rethinking packaging and other single-use materials include DS Smith, Sulapac and Lucart. Also engaged in Circulytics’ development were Essity (health and hygiene), Granta Design (materials IT), Novo Nordisk (pharmaceuticals), Royal BAM Group (construction services), Tarkett (flooring), Teleplan (electronics reverse logistics) and The Renewal Workshop (apparel).

Prior to the launch, 100 companies pre-registered to access the tool. Participating companies are allowed to publicize their Circulytics score (from A to E — see graph above) with the logo for a year after it’s generated, or longer if they continue to use the tool.

For EMF, there’s an opportunity to help its goal of evangelizing circularity among the business and investor communities, presenting success-story case studies of consenting companies.