Report

Measuring the circularity of a business model means quantifying the extent to which an organisation, a product or a project reduces its consumption of virgin resources, extends the service life of materials and minimises waste generation. The main frameworks available are the ISO 59020 standard, the WBCSD's Circular Transition Indicator (CTI), the Ellen MacArthur Foundation's Material Circularity Indicator (MCI) and the CSRD's ESRS E5 standard for regulatory reporting.

Since 2023, Circul'R has led the Circularity Measurement Coalition, a collective work programme bringing together large organisations committed to putting these indicators into practice.

Why has measuring circularity become a strategic requirement?

For many years, circular economy initiatives were rolled out without structured measurement tools. Reuse schemes, recycled-content programmes and waste reduction initiatives were run without any way of quantifying their real impact, or of comparing them with a target trajectory set at executive level.

That situation is no longer tenable. Three converging dynamics now make measurement unavoidable for any organisation seriously engaged in the circular transition.

• Regulatory pressure has intensified considerably. Since 2024, the CSRD has required large companies to publish formalised circular performance indicators under ESRS E5, covering resource use, waste management and material intensity. The AGEC law, the ESPR (Ecodesign for Sustainable Products Regulation) and the PPWR (Packaging and Packaging Waste Regulation, in force since 2025) complete this framework for specific sectors and product types. In this context, the absence of measurement is a compliance risk.
• Executive committees and finance functions are demanding proof of value creation. According to a recent study, more than 70% of industrial leaders believe circular business models will help grow their revenues in the medium term and 65% see them as a central lever of resilience against supply disruptions (Bain and World Economic Forum, 2025). Without reliable indicators, it is impossible to steer this transformation, to demonstrate its return on investment or to defend its relevance.
• Circular communications are now subject to a high legal standard. The European "Empowering Consumers for the Green Transition" (ECGT) directive, adopted in February 2024 and applicable from 27 September 2026, prohibits generic environmental claims and carbon neutrality claims based on offsetting, unless supported by recognised and certified performance. Any communication about the circularity of a product or an organisation will have to rest on verifiable, documented indicators. Communicating without measuring exposes the company to a growing risk of being reclassified as greenwashing and, from September 2026, to penalties for unfair commercial practices.

The Circularity Measurement Coalition: a collective programme to put measurement into practice

Faced with the complexity of these issues, in 2023 Circul'R launched the Circularity Measurement Coalition, a multi-year work programme bringing together large organisations from a range of sectors - including AXA, BNP Paribas, BPCE, EDF, Hermès, LVMH and Veolia - alongside academic partners.

The coalition's ambition rests on a simple observation: while the circular economy is a strategic lever against environmental, economic and regulatory pressures, putting it into practice at scale runs into real obstacles, particularly around measurement. No company, however advanced, can resolve these questions of scope, comparability and methodological robustness on its own. The answer is necessarily collective.

Year one: building a common foundation

The coalition devoted its first phase to developing a shared framework of 21 circularity indicators, designed to be cross-sectoral and usable by a diverse range of players, whatever their level of maturity and their business model.

Year two: testing on real cases

The second phase, whose results were published in September 2025, tested these indicators against concrete operational projects run by three coalition members:

• EDF's eco-responsible construction site, which showed how integrating circular practices - material reuse, optimised logistics, waste reduction - could generate measurable environmental benefits while durably transforming ways of organising work.
• Veolia's Life2Life initiative, which highlighted the structuring role of reuse platforms in optimising service life and managing resource stocks.
• BNP Paribas 3Step IT's IT leasing offer, which illustrated how a model built on full technology life-cycle management makes it possible to maximise the useful life of equipment, recover value from materials at end of life and offer an economically competitive alternative to ownership.

This work produced several important cross-cutting lessons. Applying the indicators proved highly dependent on the type of offer (product versus service), the granularity of the data available and how clearly the scope of analysis had been framed beforehand. Above all, they serve a structuring and educational function: more than simple reporting tools, they help organisations frame the right questions, prioritise their actions and identify concrete areas for improvement.

The coalition's outputs are published open source and freely available to all economic actors.

The three levels of analysis: company, project, product

Circularity is not measured at a single level. Depending on the objective - strategic diagnosis, project assessment, product management - the scale of analysis and the relevant indicators differ substantially.

Company or organisation level

This is the level of circular maturity assessment and regulatory reporting. The aim is to evaluate the organisation's overall circular performance, identify the most advanced pillars - sourcing, ecodesign, waste management, evolving business models - and map the blind spots.

The frameworks used at this level are ISO 59004 for framing principles and terminology, ISO 59020 for calculating the circularity rate of flows, and ESRS E5 for organisations subject to CSRD reporting obligations. Circul'R has carried out this type of diagnosis for players in the oil industry, luxury goods and jewellery, in each case identifying between 13 and 50 improvement points and a roadmap validated by the executive committee.

Circular project level

A packaging reuse programme, a refurbishment value chain, a separate collection initiative: measuring circularity at this level means quantifying environmental impacts - material flows diverted, CO₂ emissions avoided, life cycles extended - and modelling the economic implications in order to build a rigorous business case.

The preferred tools are life cycle assessment (LCA) and economic modelling, generally combined to allow an informed trade-off between different transformation scenarios.

Product level

This is the level of ecodesign and material traceability. The aim is to assess the intrinsic circularity of a product: recycled or bio-based content, recyclability at end of life, durability, repairability in the sense of the AGEC index. The Ellen MacArthur Foundation's MCI and the WBCSD's CTI are the two most widely used frameworks at this level, supplemented where relevant by sector frameworks currently being standardised under the ESPR regulation.

The main frameworks and indicators to know

Measurement frameworks

ISO 59020: applies at company and product level. It provides the methodological framework for calculating the circularity rate of an organisation's incoming and outgoing resource flows.

ISO 59004: is the framework of principles, terminology and criteria that serves as a common foundation for any circular diagnosis at organisational level.

CTI (Circular Transition Indicator) from the WBCSD: analyses the transition of incoming and outgoing resource flows towards circularity. It can be applied at company or product level and is one of the most widely used frameworks in the context of external critical review.

MCI (Material Circularity Indicator) from the Ellen MacArthur Foundation: measures the circularity of a specific product along three dimensions: the origin of the material, the intensity of use and end-of-life recovery.

ESRS E5 - CSRD: is the mandatory reporting framework for companies subject to the CSRD. It covers resource use, waste and circular economy practices, and assumes a rigorous definition of indicators (IROs, data points, KPIs) and the associated circularity protocols.

Repairability index: applies at product level. Introduced by the AGEC law, it measures a product's capacity to be repaired and is a legal obligation for certain categories of goods placed on the French market.

The most frequently used KPIs

• Share of secondary materials (recycled, reused, bio-based) incorporated into supply flows
• Waste diversion rate away from landfill or incineration without energy recovery
• Material intensity: quantity of materials consumed per unit of revenue or value created
• Recyclability or reusability rate of products or packaging placed on the market
• Number of life cycles of a product or component, particularly relevant for reuse and refurbishment models
• Reduction in CO₂ emissions per unit produced, linked to circular design or sourcing choices

These indicators only deliver value if they rest on rigorously collected data, with a documented methodology and a clearly defined scope.

The two most common mistakes in measurement

1 - Confusing action with impact

Stating that 30% recycled material has been incorporated into a packaging describes an action; it is not a measure of circularity. Measurement means linking that action to its effects on the organisation's resource flows, its emissions and the durability of its production system. Every indicator must be anchored in a defined scope, a baseline and a time horizon.

2 - Selecting a framework before defining the objective

The CTI, the MCI, ISO 59020 and ESRS E5 do not answer the same questions and are not aimed at the same audiences. Choosing a tool without first defining what you are trying to measure and for what purpose (internal management, regulatory reporting, external communications, critical review) frequently produces an indicator that is hard to act on, poorly owned by operational teams and difficult to defend before an external auditor.

How does Circul'R support circularity measurement?

For more than ten years, Circul'R has supported organisations in building, calibrating and steering their circularity measurement. This expertise has been enriched by the collective work carried out within the Circularity Measurement Coalition, whose methodological outputs are available open source.

Four types of engagement structure our work:

• Circular diagnosis: assessment of the organisation's circular maturity across all pillars of the circular economy, with reference to the ISO 59000 standards and CSRD requirements. Deliverables: resource flow mapping, circularity score, prioritised improvement points and roadmap.
• Circular strategy and KPIs: co-building the quantified targets and management indicators for the circular transformation, consistent with CSRD/ESRS E5 reporting obligations and the organisation's CSR ambitions.
• Product measurement and LCA: assessing the circularity of a product or an ingredient, defining the criteria and building a robust methodology that can be defended in external critical review and used in regulatory-compliant communications.
• External critical review: independent analysis of an existing measurement: verifying methodological robustness, identifying scope biases, and proposing improvements to strengthen the indicator's representativeness and its acceptance by subject-matter experts.