Circular Economy (CE)
1. The GSES CE Pillar
In absence of an international ISO standard for Circular Economy, the Circular Economy pillar of GSE Standard is based on the BS 8001:2017 ‘Framework for implementing the principles of the circular economy in organizations – Guide, British Standards Institution (BSI), 2017’.
BS 8001:2017 distinguishes six principles of the circular economy that are important for the organization:
- System thinking: applying a holistic approach to understanding how individual decisions and activities interact within the broader system of which they are part.
- Innovation: continuous innovation to create value by enabling sustainable management of resources through the design of processes, products/services and business models.
- Stewardship: managing the direct and indirect effects of the decisions and activities within the broader system, of which one is part.
- Cooperation: internal and external cooperation through (in)formal arrangements to create shared value.
- Value optimization: to keep all products, components and materials at their highest value and use at all times.
- Transparency: being open about decisions and activities that affect the ability to transition to a more circular and sustainable state of operation and being willing to communicate these in a clear, accurate, time-bound, fair and complete manner.
Much pioneering work in framing the concept of Circular Economy has been done by the Ellen MacArthur Foundation. The CE Pillar is, next to the BS8001, also based on the work of the Ellen MacArthur Foundation.
The pillar Circular Economy of GSE Standard is closely connected to the Circular Footprint pillar. To get a good grip of the level of circularity of an organization and its supply chain, the project/project-level of the Circular Footprint pillar can be connected to the organizational level of the Circular Economy pillar. Together they give the complete overview of the level of circularity.
The Circular Footprint pillar of GSE-Standard is based on the method ‘Circular Indicators – An Approach to Measuring Circularity’ of the Ellen MacArthur Foundation and the ‘Material Reutilization’ of Cradle to Cradle and goes a step further. It takes scalability, production of waste, recycle content and biobased raw material flows into account. The Circular Footprint pillar is applicable to projects, products, ships and buildings.
By working on the Circular Economy Pillar (and the Circular Footprint Pillar on the product/project-level) of GSE-Standard, the organization can contribute to the realization of the following SDGs: 6, 9, 11, 12 and 17.
2. CE Pillar content
The CE Pillar checks context analysis in the same way as the other pillars. Issues (both internal and external) related to procurement and the value chain need to be analysed.
When it comes to CE the organization deals with a large number of stakeholders e.g.:
- Suppliers, contractors, intermediaries, partners
- Distributors, customers
- Sector and branches
- Governments (laws and regulations and enforcement)
- Citizens and local communities
Risk and opportunities
After the context and stakeholder analysis, CE specific risks and opportunities should be addressed e.g.:
- options for creating a system around a product service in which the value of materials is retained as much as possible, and partners needed for this
- techniques and/or innovations
The Pillar checks if management is committed and shows leadership with regard to CE.
Planning & CE Subjects
The CE Pillar check if and organization has policies and objectives for Circular Economy, if concrete targets have been set for CE and if KPIs have been established in order to manage the CE objectives.
The Pillar checks 7 aspects of CE planning:
- system thinking, and long term thinking in the direction of system change
- collaboration in the chain focused on circularity
- innovation and redesign of products and/or services
- new business models focused on value retention
- taking responsibility for the life cycle of materials
- high-quality reuse and recycling of products and materials
- renewable materials
Aspects of implementing and supporting CE In the organization in the pillar are:
- a practical action plan for CE that is regularly reviewed and updated
- a CE management system
- training and education of employees in CE management and tooling
- management supports the organization and encourages them to persevere and come up with new ideas if the results are disappointing
- the organization is already active in one or more pilots so as to experiment with CE
Operational checkpoints are cooperation, waste separation and recycling. But also procurement practice is important, specifically financial flexibility for the use of a total cost of usage/ownership calculation and spending money over a longer period of time instead of all at once.
Looking at what an organization actually does or offers their clients the Pillar includes:
- modular and/or easy to repair products
- use bio-based materials from sustainably managed areas that do not compete with food production
- use recycled substances and materials in products
- apply high-quality reused parts in products (re-manufacture)
- supply high-quality reused products (refurbish)
- applying pay per use, lease and/or buy back contracts
- assuring the recycling of materials after use
- assuring the reuse of products and/or parts after use
The Circular Economy Pillar includes two methods for quantifying circularity based on material flows on the organizational level: Circular Revenue and Water Circularity, according to the WBCSD CTI Framework, and Circulytics, respectively. For example, the assessment ask for the percentage of the Circular Revenue for the company or business unit assessed.
Evaluation and improvement
The GSES system checks if performance is measured, monitored and assessed with quantitative targets, if this assessment is audited and if the organization draws conclusions from the assessment and works towards continuous improvement.