Abstract
The beginning of this millennium witnessed the emergence of the CE concept with an aim of sustainable development. It gradually gained traction from governments, non-governmental organizations, businesses, and researchers, and the implementation of various strategies towards a CE began. Currently, our economic system is in a transition phase from a linear to a circular one. In this phase, monitoring the progress towards circularity using an assessment framework is of paramount importance, given the critical impact such a transition in the economy may have on the environmental, economic, and social aspects of the society in the coming decades. This work provides an overview of circularity assessment and the four systemic levels of its implementation. The introductory chapter begins with a brief description of how a CE is essential in achieving a sustainable future and provides a glimpse of the current status of our economic system. Further, circularity assessment and the various phases involved in the process are introduced and elaborated. As a highlight of the chapter, we present for the first time, the key features of the upcoming standard from the ISO—the ISO 59020, that aims to establish a generic but optimum process for circularity assessments. Lastly, the chapter concludes with a brief note on the need for understanding the state-of-the-art circularity assessment approaches (as discussed in the following chapters).
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Keywords
- Circularity assessment
- Sustainability
- Circularity measurement
- Circularity indicators
- Circularity assessment framework
- Circular economy
1 Introduction
Our global economy has followed a linear pattern (take-make-use-dispose) [1,2,3] for around 200 years since the IR. Although the IR has economically benefitted people, businesses, and countries, it has resulted in drawbacks such as accelerated resource extraction, environmental pollution, and excessive consumer demand and consumption. This has led to alarming environmental impacts such as climate change and resource depletion. For instance, globally, material resource use has exceeded 100 billion tons for the first time in history [2, 4]. As a result of global warming, in recent years Greenland’s ice sheet is melting much faster than in1990s, leading to rising sea levels [5]. To mitigate such undesired effects, the UN SDGs and the Paris Agreement frameworks came into existence. However, these targets have been yet little achieved, majorly due to slow implementation of policies and inadequate collective action [2, 6,7,8].
A CE, one that is restorative and regenerative by principle and design, is a practical solution to achieve the desired low-carbon, sustainable economy [3]. In reality, the goal of the Paris Agreement to check global warming to 1.5 \(^\circ \)C above the pre-industrial level [9] is achievable by transiting to a CE (due to the reduction in greenhouse gas emissions). Furthermore, CE decouples economic growth from resource constraints and minimizes resource depletion by closing the materials loop. In addition to environmental benefits, chartering towards CE will have indirect advantages such as improved security of raw materials supply, creating new jobs/opportunities in the tertiary sector, and increasing the competitiveness of businesses. According to a McKinsey report [10], the increase in revenue from circular activities (such as the reuse of products and materials, and remanufacturing) together with lower production cost can increase the GDP and thereby facilitate economic growth. In total, the circular approach provides economies an avenue for resilient growth, benefiting all the stakeholders- governments, consumers, businesses, and society as a whole.
1.1 Current Landscape
According to the Circularity Gap Report 2020, our current economy is only 8.6% circular and far from reaching the Paris Agreement goal [2, 6]; a clear sign that this is not a sustainable economy. This is primarily due to the classic deep-rooted problems of the wasteful linear economy [3, 11] such as (i) collective contribution of high rates of virgin resource extraction and on-going building-up of stock (in the form of buildings or heavy machinery), (ii) increasing rates of production/manufacturing, and (iii) low rates of processing end-of-life products and cycling back for consumption [2].
In recent years, we have witnessed the CE gaining the attention of researchers, institutions, businesses, and governments in their pursuit of an environmentally, economically, and socially sustainable alternative to the current economic model [3, 12,13,14,15,16,17,18,19,20]. There have been efforts through multiple fronts such as policies and frameworks [21,22,23], business models [24,25,26,27], research and innovation [28,29,30], and creating consumer awareness for transiting to a CE [31,32,33,34]. Realizing the potential of CE, many countries including those in Europe, and China have introduced CE policies and roadmaps in recent years [19,20,21,22,23]. Also, several global businesses and start-ups have adopted CE principles in their operations and management [35,36,37]. Even though CE agendas/practices are springing up all around the world, this is merely the beginning, and transiting from a linear to a CE is a gradual and long process.
In this transition phase and beyond, it is crucial to monitor the progress towards circularity and steer the economic system in the right direction. Therefore, the system as a whole and every component of the system needs to be evaluated and feedback should be provided regularly to enhance the circularity. For this purpose, a comprehensive circularity assessment and a standard framework for the same are important.
This chapter introduces the readers to the generic concept of circularity assessment and measurement using a set of indicators. Then, we present the various levels of systemic hierarchy for which circularity assessment is practiced (discussed in detail in the following chapters) prior to discussing the need for a standard circularity assessment framework. Further in the chapter, the details of the International Standards Organization (ISO) 59020—the international standard for circularity assessment, (being developed currently) are furnished. As a concluding opinion, the importance of understanding the state-of-the-art circularity assessment approaches (presented in Chaps. 3–6) and the influence of the upcoming ISO standard on the current practices are presented.
2 Circularity Assessment
To assess circularity at a systemic level (such as nation, city, business, and product), it is imperative to measure the relevant environmental, social, and economic indicators. This points to the concept of circularity measurement that can be understood as an approach to determine the circular performance (extent of progress towards a CE) of a systemic level using a set of relevant quantitative and qualitative indicators (see Footnote 1). The collated and processed result from such a measurement process can provide insights on areas of improvement, target timeline, and alternative methods to progress towards circularity. It is to be noted that the data used should be coherent, reliable, traceable, and the procedures/methods for collecting the data and the data sources (inclusive of assumptions) should be available to the users of the assessment framework. Also, a universal metric for measurements should be used so that results can be shared, compared, or reused for other circularity assessments, for example, at a different economic level.
With this background, circularity assessment (see Footnote 1) can be defined as a process of analyzing and interpreting the the results of circularity measurement, encompassing environmental, economic and social impacts, and balancing significant aspects of the systemic level being assessed such as the target audience, stakeholders’ perspectives, application of interpreted data, and complementary assessment methods.
The CE encompasses the environmental, economic as well as social dimensions and the three dimensions are interdependent at the systemic levels. Therefore, a comprehensive assessment must take into account all the environmental and social impacts (both positive and negative) associated with the subject of assessment (such as product, business, city, region) along with the economic challenges/benefits for achieving circularity. To elaborate, the assessment should not be limited to the circularity indicators for measuring the material resources in the technological cycles as often seen in many proposed methodologies.
2.1 Quantifying Circularity Using Indicators
Circularity indicators are crucial instruments for evaluating and communicating the progress of a system towards circularity [38]. In general, indicators can be classified into three categories, namely,
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Quantitative indicators: represented by numerical values that can be used for mathematical calculations and statistical analysis
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Qualitative indicators: descriptive in nature without any quantification
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Semi-quantitative indicators: a qualitative scale that is based on quantitative data
The data set obtained from measuring an indicator is easy to understand as it is a simplified unit of a complex parameter needed to be measured. For example, a complex parameter such as air pollution can be broken down into several indicators for quantifying each of the air pollutants. If an indicator’s values are aggregated for a considerably long time (say, a few years), then the accumulated data can be used to observe trends. Therefore, a circularity indicator can be defined as the basic unit of circularity measurement that translates environmental, social or economic aspects into manageable and understandable data.
For practical purposes, a comprehensive system of indicators is always of interest for the pursuit of a CE. A circularity indicator system which is a collection of all the circularity indicators should account for all stocks and flows of resources impacting the specified systemic level. The system should also specify how to combine constituting indicators, as well as the methods used to calculate and analyze indicator values in a consistent, replicable manner.
2.2 Systemic Levels for Circularity Assessment
In order to ensure proper circularity measurements and assessments appropriate boundaries need to be applied so that the outcome is meaningful and manageable. These boundaries can be either spatial (geographical area) or temporal (time scale) based on the system being considered. In this book, to better understand the circularity implementation and assessment process, the systemic approach for circularity assessment is classified into four levels as listed below (Fig. 1.1).
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1.
Macro: defined by spatial area (e.g., city, country, region, international group) or sector (e.g., mining, manufacturing)
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2.
Meso: defined as group or network of collaborating firms or industries
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3.
Micro: includes individual companies/organizations
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4.
Nano: includes products (inclusive of product as a service) or components reflecting their entire life-cycle
Most prior art on circularity measurement considers only three levels of systemic hierarchy namely, macro, meso, and micro by merging micro and nano levels [13, 14, 18]. However, the ‘Circular Metrics, Landscape Analysis’ reportFootnote 1 by the WBCSD mentions four levels of measurement similar to the scale provided here.
2.3 Phases of Circularity Assessment
A circularity assessment process involves four phases as shown in Fig. 1.2 (see Footnote 1). These phases are listed below and the generic steps involved in each of them are explained.
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1.
Defining Goal and Scope for the measurement and assessment of circularity:
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choosing the systemic level and defining its scope
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selecting the applicable set of circularity indicators
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establishing data quality requirements
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pre-selection of complementary methods
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identifying and establishing communication channels with the stakeholders to document their requirements in the measurement and assessment plan
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defining specific goals for circularity assessment.
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2.
Acquiring Data for circularity measurement:
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if possible, deriving data from complementary analysis/standard databases
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establishing data acquisition protocols with specifications
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assessing the quality of the acquired data and documenting the same for future reference
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normalizing the data.
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3.
Performing Circularity Measurement :
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measuring/calculating indicators values using quantitative data (such as resource flows, impacts)
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analyzing relevant information to assign values to qualitative indicators
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performing analyses such as sensitivity, categorical, and relationships as applicable
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performing simulations/modelling.
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4.
Performing Circularity Assessment:
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reviewing the objectives and requirements of the circularity assessment
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analyzing the measurement results to suggest improvements
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interpreting the measurement results in a specific format for presentation to the target audience
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answering specific questions to meet the requirements of the stakeholders.
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2.4 The Need for a Comprehensive Assessment Framework
There are numerous indicators and proposed methods for measuring circularity at various levels of the economy such as cities or countries, businesses, and products [39,40,41,42]. In the past few years, scholars reviewing these have identified the lack of a standard methodology with a comprehensive set of indicators for circularity measurement [42]. This gap has created non-uniform and/or ambiguous measurement frameworks that may lead to incoherent evaluations and/or conclusions. Some of the researchers have highlighted the importance of a well-designed and effective methodology to evaluate the circularity at various levels of the economic hierarchy [41, 42] and have provided recommendations for the development of circularity indicators for efficient evaluation [43,44,45]. Besides, it is evidenced through extensive studies that none of the existing indices and methodologies are solely capable of monitoring/evaluating the progress towards CE at various systemic levels. Despite the existence of multiple methodologies and indices, the current frameworks for measuring circularity and their application to improve CE strategies are still in their early phase.
At present, it is an established fact that there is a need for a standard methodology such as an ISO framework to assess the circularity of the economic system to aid the transition. Such a framework should be applicable for the circularity assessment of each level of the economic hierarchy—ranging from countries/cities to a product. Monitoring and evaluation framework relying on verifiable data (expressed in standards), with a comprehensive set of performance indicators, and a standard circularity assessment methodology is essential to track the progress towards the CE. This is also significant in avoiding ‘lock-in mechanisms’ obstructing the progress towards CE [46]. For instance, a situation wherein the non-availability of a certain material (essential in manufacturing a product) in the secondary material market due to economic factors/practical infeasibility of recycling from end-of-life/discarded products leading to the exploitation of rare virgin resource, locks the progress towards CE for a particular industry. A comprehensive circularity assessment framework should provide guidelines and useful feedback for improving the state-of-the-art industrial manufacturing, consumption practices, and existing legislative and policy tools.
3 Developing a New Standard for Circularity Assessment: ISO 59020
The ISO has brought together experts around the world to develop the ISO 59000 series of standards for normalizing the understanding of the circular economy and facilitating uniform implementation, monitoring, and measurement of circularity. This series is categorized into several standards as listed below.
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ISO 59004: Circular Economy—Terminology, Principles, and Guidance for Implementation
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ISO 59010: Circular Economy—Guidance on Business Models and Value Networks
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ISO 59014: Secondary materials—Principles, Sustainability, and traceability requirements
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ISO 59020: Circular Economy—Measuring and Assessing Circularity
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ISO 59031: Circular Economy—Performance-based Approaches
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ISO 59040: Circular Economy—Product Circularity Data Sheet.
In this chapter, we present the ISO 59020 on circularity assessment, which includes the assessment at all the systemic levels in response to the market needs. As of February 2022, the draft of the ISO 59020 standard is being developed, discussed, and modified to cater to the interests of all the stakeholders.
3.1 Principles for ISO 59020
Before discussing the details of the upcoming ISO model, one needs to understand the principles based on which the ISO framework is being developed. The twelve principles considered for this standard are as listed below and are documented in the ISO 59020 draft version 1.0.Footnote 2
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1.
Applicability: The circularity measurement (using a system of indicators) and assessment should be applicable to every systemic level and across various sectors.
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2.
Coherence: The circularity assessment method should be based on the defined metrics to achieve coherent and reproducible results.
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3.
Comparability: The measurement metrics and the assessment results should enable reliable comparison of two or more similar entities belonging to the same systemic level.
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4.
Completeness: The assessment should account for all stocks and flows, the environmental, social and economic impacts of the system under consideration. For example, in the case of a product, from planning and design, through the selection of raw materials, manufacturing, operations and processes, distribution, use, maintenance, reuse, repair, recycling, or other circular practices, inclusive of accounting for mass and values along the chain, to any losses such as final dispositions and emissions (as documented in the ISO 59020 draft version 1.0 (see Footnote 1)).
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5.
Reliability of data: The data used or provided for the assessment should reflect the best available know-how from measurement or calculation and should come with a descriptor such as ‘quantified measurement’, ‘verified’ to ‘non-qualified estimate’ (as documented in the ISO 59020 draft version 1.0). The data used should be referenced and traceable, and be as complete and consistent as reasonably possible (e.g. from well-developed data sets and well-maintained databases). Any data sources of lower quality used or assumptions made in an analysis should be carefully managed and reported along with (i) a quantitative assessment of the resulting uncertainties, (ii) the identification of data sources or assumptions that represent key sensitivities in the analysis and (iii) the potential uncertainty in the overall result (see Footnote 1).
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6.
Loss rate estimations: Circularity assessments should include calculation of losses from the system being assessed. Losses may include emissions, expended energy, disappearances and other changes in resource values associated with each step or activity within the system, for example, breakages, lost materials and products, costs of collection, transportation, process inefficiencies, and even consumer behavior.
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7.
Robustness: The impact of uncertainties in data used for assessment should be evaluated with standard tools (for example, sensitivity analysis and comparison of analysis using different indicator systems and databases). The interpretation of the circularity assessment and the related conclusions should not fundamentally change as a result of uncertainties in the data used.
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8.
Scale universality: The assessment method and the indicator system used should be applicable to any scale in the systemic hierarchy (see Footnote 1) such as:
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(i)
from single unit sales and trade transactions to global sales and supply chains up to whole economies,
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(ii)
from short term to multigeneration changes that result from a change in approach, and
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(iii)
from small user applications to governmental and global policy decisions.
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(i)
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9.
Systemic interdependencies: An assessment should take into account all the relevant systematic interdependencies, both internal and external to the scope of assessment. Internal interdependencies might be represented by a matrix of relationships between data and datasets, methodologies, and indicators. Interdependencies external to the scope of the level of assessment should also be considered (for example, long-term impacts, changes in customer behavior, effects on a level outside the assessment level, impacts of one country’s circularity measures on another). Also, interdependencies between the three aspects of sustainability (environmental, economic, and social) should be recognized (see Footnote 1).
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10.
Traceability of resources: The traceability of resources and materials within the scope of circularity assessment is critical. It is the ability to follow the history and future of the resources and materials used as well as the products resulting from these so that the circularity of a system can be practically verified. Materials flow analysis and life cycle analysis are important tools in identifying the usage and fate of the resources. Traceability must extend to cover all aspects that impinge on the extraction of resources from the natural environment or their reintroduction to the system as well as any positive or negative impacts such activities may have on the short or long term regeneration of biological systems (including soil and water) and indigenous ecosystems (see Footnote 1).
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11.
Transparency: The methods, models, procedures, and data sources used in a circularity assessment should be transparent and unambiguous. The assessment process should be available to all interested parties to the maximum possible extent; taking account of confidentiality where appropriate. Consistent documentation of data; collection, calculation, and reporting of data by specifying and structuring relevant information ensures transparency and permits comparative analysis. Uncertainty or volatility in data, estimations, and assumptions made during the assessment should be declared. Where uncertainties exist or assumptions have been made, sufficient data should be provided in any analysis or results to enable the third-party calculation of alternative scenarios following the documented assumptions or applying different datasets (see Footnote 1).
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12.
Time scale: The time scale/temporal dimension of data in an assessment should be properly considered and appropriately detailed. Specifically, factors such as product lifetime, the frequency with which materials, parts, components, and products enter the loop through reuse, sharing, repair, refurbishment, remanufacturing, and recycling, and the expected time to end-of-life should be provided. The time scale chosen should encompass the entire life cycle and resource recovery.
3.2 The ISO 59020 Model
It is to be noted that at the time of authoring this book (Feb 2022), the ISO 59020 is under development and the schematic model (Fig. 1.3) of the framework provided here may differ from the final version.Footnote 3 The intention of developing this framework is to provide a standard and comprehensive circularity assessment methodology that is applicable at every systemic level catering to the interests of the related stakeholders. Based on the other estabished standards that are complementary to the this (such as 14000 series), we can expect the standard to include a thorough and comprehensive inventory to measure the energy associated with the systemic level considered, along with the material circularity. Thus, it can be a reliable methodology to provide the cummulative value (for the extent of circularity) and insights to improve the overall circularity profile of the systemic level in consideration. However, the standard may need regular updations and amends based on users’ feedback.
As discussed earlier in Sect. 1.2.3, the model consists of 4 major stages, namely, (i) Goal and Scope, (ii) Circularity Measurement, (iii) Data Acquisition, and (iv) Circularity Assessment. In the Fig. 1.3, these stages are shown in the gray boxes within the framework. The dotted box is for complementary assessment methods/standard databases which can aid the measurement process. The arrows indicate the information flow between the stages they connect.
In the first stage of circularity assessment framework (see Footnote 2), the boundaries of the systemic level considered, and the requirements of the stakeholders are defined. Based on these inputs, the relevant indicators (including environmental, social and economic factors) are selected from the inventory and the circularity is measured using pre-determined protocols/guidelines, accordingly. Besides, the data required for the indicators measurements can be borrowed from complementary methods/standard databases. This provision to use complementary methods such as Life-cycle Assessment (LCA), Materials Flow Analysis (MFA), SDGs evaluation method, and related ISO frameworks (for example, ISO 14000 series, ISO 26000, etc.) for data collection is allowed since the measurement framework is new. Specific algorithms in the data acquisition stage are used to normalize and process all the data, to calculate the total circularity of the system. Finally, the results of measurement are analyzed and interpreted to present them in an understandable form. Analysts and researchers (framework users) who evaluate/assess the overall circularity based on the assessment framework can provide their insights on the progress towards a CE at the systemic level and indicate the specific areas for improvement as per the requirements of the stakeholders. These insights are useful in setting the rules and regulations, enframing policies and legislation, business remodeling, circular product design, and enhancing the circularity of the value chain.
3.3 Limitations of Circularity Assessment
Although care is taken to develop a robust assessment framework, there will always be several challenges in its implementation. Such extensive assessments involve several variables and uncertainties, limiting the efficiency of the assessment process. Some of the major limitations of circularity assessment are listed below (see Footnote 1).
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1.
A circularity assessment result obtained from applying the framework to a systemic component cannot be used to make claims on the circular performance of another component in the same systemic level even though they are similar. For instance, the assessment result of an automobile manufacturing company cannot be used to make assumptions about the performance of another company belonging to the same industrial sector.
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2.
Though the assessment results from a lower level of the systemic hierarchy are transferable to a higher level (for example, from nano to macro), they may not be taken into account properly (as in partial usage of assessment data) resulting in improper assessment of the higher systemic level.
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3.
The circularity performance of two systemic components belonging to the same level cannot be compared if they are assessed using different indicator systems or subsets of the same indicator system (based on the goal and scope of each) even if the same resources are studied.
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4.
Lack in the availability of appropriate data for each indicator considered and the lack of spatial and temporal dimensions during data collection introduces uncertainty to the measurement and assessment process.
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5.
The unknown and unpredictable environmental and social impacts and the economic impacts reflecting the market changes may dynamically affect the assessment results.
4 Relevance of This Work
While the ISO framework for circularity assessment is under development, it is important to understand the state-of-the-art circularity assessment at various levels of systemic hierarchy. This will provide an overall perspective of the advantages and issues related to the current practices. These crucial insights may not only aid in minimizing the uncertainties/limitations in the current practices but also assist in improving the framework and its implementation.
In this regard, a detailed discussion on the circularity assessment carried out currently at each level of the systemic hierarchy is provided from Chaps. 3 to 6. Each chapter provides an overview of the assessment process for a particular systemic level with relevant set of indicators, along with real-world cases for a better understanding of the implementation of such a process. It is the authors’ opinion that consumers being a crucial part of the economic system can influence the transition towards circularity profoundly. Hence, as a befitting conclusion to this book, the role of consumers (considered as the granular systemic level) in the pursuit of a circular society is discussed, and how their behavior can affect a ripple effect of change in the economic system as a whole.
Notes
- 1.
WBCSD’s (2018) Circular Metrics Landscape Analysis https://docs.wbcsd.org/2018/06/Circular_Metrics-Landscape_analysis.pdf.
- 2.
Preliminary draft of ISO 59020, Version: 1.0 by ISO/TC 323 Working Group 3 for ‘Circular Economy—Measuring Circularity’.
- 3.
ISO 59020 CD Living document #2, version 23 February 2022 (Draft of framework for measuring and assessing circularity) on ‘Circular Economy—Measuring and Assessing Circularity’.
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Patil, R.A., van Langen, S.K., Ramakrishna, S. (2023). Circularity Assessment: Developing a Comprehensive Yardstick. In: Patil, R.A., Ramakrishna, S. (eds) Circularity Assessment: Macro to Nano. Springer, Singapore. https://doi.org/10.1007/978-981-19-9700-6_1
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DOI: https://doi.org/10.1007/978-981-19-9700-6_1
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