Data & Insights

Insights from Circulytics

Between the launch of Circulytics in 2020 and 2023, over 2,000 companies signed up to use the tool across four submission cycles. An analysis of the aggregated and anonymised data from the submissions has provided useful insights and benchmarking.

Contents

1. Overview of Circulytics submissions and insights (2020-2023)

2. Performance data: most recent submission cycle (2022-2023)

3. Performance across the most recent two submission cycles (2021-2023)

4. Notes on methodology

1. Overview of Circulytics submissions and insights (2020-2023)

Key insights

• The steady rise in the number of companies that registered their interest in Circulytics across a wide range of revenue bands, geographies, and industry groups indicates that circular economycircular economyA systems solution framework that tackles global challenges like climate change, biodiversity loss, waste, and pollution. It is based on three principles, driven by design: eliminate waste and pollution, circulate products and materials (at their highest value), and regenerate nature. measurement is increasingly being recognised as valuable to the transition.

• The majority of Circulytics submissions were from companies headquartered in Europe, likely due in part to early signalling of the mandatory reporting on circular economy coming into effect for large European companies under the Corporate Sustainability Reporting Directive (CSRD). Listed small and medium-sized enterprises (SMEs) will be required to report on or after 1st January 2026.

• In general, companies performed better in the Enablers category than Outcomes. Enablers are likely to be the first steps in a company’s circular economy journey. It is crucial that this is translated into an actionable implementation plan towards demonstrable progress.

• In the 2023 reporting cycle, mid-sized companies (by revenue) achieved the highest scores. Small companies may find it more difficult to mobilise resources and capital towards circular innovation and adopt new systems that support the circular economy transition, whereas larger companies may struggle with implementing systemic change across widespread operations and collecting data.

• Scores for the Enablers category have improved in the last two submission cycles, but have declined for the Outcomes category. This indicates that companies have made strides towards setting up favourable conditions for a circular transition, but the implementation of plans and commitments are yet to be reflected in terms of tangible results.

• Evidence of improved material procurement was seen over the last two submission cycles: 31% of companies successfully reduced the share of virgin material inflows, and 27% successfully increased the share of non-virgin material inflows.

• The average scores of companies for the Energy theme, measuring the share of renewable energyrenewable energyEnergy derived from resources that are not depleted on timescales relevant to the economy, i.e. not geological timescales. in total energy use (and share of renewable energy in total production for energy producers), show a decline. Transitioning to renewable energy is key to the circular economy transition.

1.1 Companies that registered their interest in Circulytics

• 2,272 companies registered their interest in Circulytics (Figure 1), of which 57% (1,286 companies) are headquartered in Europe (Figure 2).

Figure 1. Timeline of the cumulative number of companies that registered their interest in Circulytics between 2020 and 2023. The first submission cycle was from January 2020 to August 2020. Dates on the horizontal axis mark the end of each submission cycle. N=2,272 

Figure 2. Headquarter location of companies that registered their interest in Circulytics between January 2020 and August 2023. N=2,272

Companies that registered their interest in Circulytics between 2020 and 2023 ranged in size, from start-ups to global corporations. Most had an annual revenue of less than USD 10 million (59.7%) (Figure 3), while 15% had an annual revenue of more than USD 1 billion. This is significant as it highlights that momentum towards a global circular economy transition is gaining traction within a diverse range of company types and sizes.

Figure 3. Annual revenue in USD of companies that registered interest in Circulytics between January 2020 and August 2023. N=2,272

1.2 Companies that completed the assessment

• Of the 2,272 companies that registered interest in Circulytics, 280 companies completed a Circulytics assessment and received a scorecard.

Companies across all revenue bands completed assessments, suggesting that both large and small companies are realising the potential and opportunities of transitioning to a more circular way of doing business and consequently committing to evaluate their progress. 

• 70% of companies had their headquarters in Europe (Figure 4).

• 37% (103 companies) were large companies with an annual revenue of more than USD 1 billion (Figure 5).

In 2023, the EU Corporate Sustainability Reporting Directive (CSRD) announced the mandating of circular economy reporting for large companies operating in Europe. The large proportion of completed assessments from companies headquartered in Europe, and from companies with an annual revenue of more than USD 1 billion, may, in part, be attributed to this.  The scope of this directive is expected to be extended to include small and medium sized companies in the future.

Figure 4. Headquarter location of companies that completed a Circulytics assessment between January 2020 and August 2023. N=280

Figure 5. Annual Revenue in USD of companies that completed a Circulytics assessment between January 2020 and August 2023. N=280

The 2023 submission cycle saw an increased share of companies completing a Circulytics assessment from Asia and Africa, suggesting that companies across geographies are recognising the value of circular economy measurement or are being requested to provide circular economy data. 

Similarly, Figure 6 suggests that companies across different sectors found the Circulytics methodology to be a relevant, valuable, and comprehensive tool to measure their company’s circular economy performance.

Figure 6: Industry group of companies that have completed Circulytics between January 2020 and August 2023. N=280

2. Performance data: most recent submission cycle (2022-2023)

This section describes the performance of companies that completed an assessment between October 2022 and August 2023.

2.1 Benchmarks by revenue, industry, and location

The Circulytics framework is divided into 11 themes, grouped into two indicator categories — Enablers and Outcomes. The theme-level scores give an insight into how companies are performing in specific areas of their business, highlighting success and identifying areas for improvement. This section aggregates the results obtained from companies by revenue bands, industry groups, and headquarter location for the 2022-2023 cycle. 

Scores by revenue

• Mid-sized companies (by revenue) achieved higher scores than smaller and larger organisations.

On average, for both categories, mid-sized companies (with an annual revenue between USD 100 million and 500 million) achieved higher scores than smaller (an annual revenue less than USD 10 million) and larger organisations (an annual revenue above USD 1 billion) (Figure 7). The scores of mid-sized companies significantly improved from the previous submission cycle, with the greatest improvement in the Enablers category. This progress suggests these companies are beginning to establish the conditions to facilitate a company-wide transformation, such as the development of systems and capacities to support the transition, as well as preparing for mandatory reporting on circular economy.

Small companies may find it more difficult to mobilise resources and capital towards circular innovation and to adopt new systems that support the circular economy transition, although they may have the advantage of being able to implement change more quickly. Larger companies may find it comparatively easier to channel resources and capital towards a circular transition, but it can be more challenging to implement company-wide systemic change with large-scale and widespread operations. Data availability and collection can also be more difficult for larger companies. 

Enabler/Outcome gap

• The gap between the Enablers and Outcomes category scores is the widest among corporations with annual revenue greater than USD 1 billion.

In general, companies have performed better in the Enablers category than Outcomes across all revenue brackets. This is expected as Enablers are more likely to be the first steps in a company’s circular economy journey, and indicate how well-positioned a company is to transition to a more circular way of doing business in the future. 

• The gap between the Enablers and Outcomes category scores has widened for the Consumer/end products industry.

Companies in the Consumer/end products industry group have improved their performance In Enablers, while their Outcomes scores have declined since the previous submission cycle, indicating a widening gap and highlighting the importance and urgency of translating an actionable implementation plan into tangible, demonstrable progress. The scores across the two categories have declined for companies in the Services industry group, while the companies in the Intermediate products industry group show an improvement in both category scores. There was insufficient data across the other industry groups to allow for anonymised analysis.

Figure 7 shows the average Circulytics scores by annual revenue, industry group, and headquarter location. For anonymity, only clusters containing more than five company submissions were aggregated and displayed. Using this approach, enough data was gathered to show all revenue groups, three industry groups (consumer/end products, intermediate products, and services) and four regions (Asia, Europe, Africa, and North America).

Figure 7. Average company score by annual revenue, industry group, and headquarter location for companies that completed a Circulytics assessment between October 2022 and August 2023. Click on the arrow at the bottom right of the chart to view different parameters. N=66 is the total sample size, which can vary depending on parameter selection.

3. Performance across the most recent two submission cycles (2021-2023)

Improved scores across the Enablers and Outcomes categories and individual themes and performance on some key indicators shows where companies have been focussing their efforts. 

Comparison is shown for the two most recent submission cycles. Not all themes and indicators are directly comparable as improvements were made to the methodology between submission cycles.

3.1 Score changes between two submission cycles: 2021-2022 and 2022-2023

A total of 26 companies repeated the assessment in the two submission cycles, October 2021-August 2022 and October 2022-August 2023.

• The average scores for the Enablers category improved across all the themes, highlighting the increased commitment of companies to establishing the conditions needed for a circular transition.

• A widening gap between the average scores of Enablers and Outcomes categories indicates that while companies have made strides towards setting up favourable conditions for a circular transition, the implementation of plans and commitments are yet to be reflected in terms of tangible results.

• In the Outcomes category, the data indicates a mixed change in performance across themes, with average scores improving in Products and materials and Plant, property, and equipment assets, and declining in Services, Water, and Energy.

Figure 8. Average change in score between the two submission cycles. [Grey dots represent the average scores of the cycle October 2021 to August 2022 and red dots represent the average scores of cycle October 2022 to August 2023. The values indicate percentage change in average scores between the two cycles. N=26. This graph aims to capture the trends of companies that completed a Ciruclytics assessment in the two most recent submission cycles (October 2021 to August 2022 and October 2022 to August 2023), and is not based on a representative sample size.]

The improved performance in two themes, Product and materials and Plant, property, and equipment assets, can be attributed to better data availability on material flows and mass estimates for various asset categories in the most recent submission cycle. 

The performance of the Services theme is measured by the share of service revenue that comes from circular services. The decline in average scores in this theme reflects the need for companies to explore the financial value of their service based business models and develop the business case for investment towards circular solutions. For companies with water intensive operations, it is vital to track water flows, ensure quality and quantity monitoring for water discharge, and develop reduction targets for water withdrawal. 

The average scores of companies for the Energy theme, measured by the share of renewable energy in total energy use (and share of renewable energy in total production for energy producers), show a decline. Companies are encouraged to set reduction targets on absolute energy use, in addition to setting a pathway to renewable energy transition.

3.2 Insights on changes to key indicators across two submission cycles

This section sheds light on how companies have performed across some key indicators for circular economy over the past submission cycles. These indicators were selected based on their significance to capture the direction of circular economy performance across material flows and energy use over time, and showcase insights to identify improvement levers for accelerating the transition. It is important to note that these indicators are not exhaustive, but provide a partial indication of a company’s circular economy performance.

Insights are shared for the following indicators:

Material flows

1. Percentage (by mass) of virgin material in material inflow

2. Percentage (by mass) of non-virgin material in material inflow

3. Percentage (by mass) of material processing waste that goes to landfill or incineration

Circular product design

4. Percentage of products designed as per circular economy principles

Revenue from circular services

5. Percentage of revenue that comes from circular services

Renewable energy

6. Percentage of renewable energy in total energy use

3.2.1 The proportion of companies that made progress and in which indicators

An organisation’s performance is considered to have ‘improved’ for the indicators listed above if the percentage change is: 

• Positive for indicators 2, 4, 5 and 6 (% of material inflows that are non-virgin, % of products designed as per circular economy principles, % of revenue that comes from circular services, and % of energy that is renewable), and

• Negative for indicators 1 and 3 (% of material inflows that are virgin, and % of material processing waste that goes to landfill/incineration). 

‘No change’ indicates companies for which the percentage change is 0. ‘No data’ indicates the share of companies for which the percentage change cannot be determined for the indicators, due to lack of sufficient data.

Figure 9. Illustration of the share of companies that demonstrate an ‘improvement’, ‘decline,’ or ‘no change’ in the performance of indicators based on data from Circulytics' last two submission cycles.

Almost half of all companies that completed the last two submission cycles have increased the share of renewable energy in total energy use.

Approximately  30% of  companies have reduced the share of material inflows that are virgin, and a similar number have increased the share of material inflows that are non-virgin. A large proportion of companies showed no change in the performance of these indicators — almost half of the companies show no change in the share of material inflows that are virgin.

Almost 50% of companies indicate no change on the share of waste sent to landfill/incineration, and an equal share of companies demonstrate decline and improvement.

The majority of companies do not have sufficient data on the share of products designed as per circular economy principles and on the share of revenue from circular services. As for the companies that do have this data, there is an even distribution of companies demonstrating improvement and decline for these indicators.

3.2.2 By how much has the performance improved over the last two submission cycles?

In the above section we looked at the proportion of companies that made progress on indicators. To understand by how much the companies have progressed or declined on these indicators, we look at the changes in average scores over the last two submission cycles.

Figure 10. Illustration of the extent of changes on the progress of indicators based on data from Circulytics' last two submission cycles.

On average, marginal progress has been made on lowering the share of material inflows that are virgin. This suggests that some efforts have been made towards decoupling business models from virgin material extraction. Companies are encouraged to explore sourcing materials that are regeneratively produced, when non-virgin materialsnon-virgin materialsMaterials that have been previously used. This includes: materials in products that have been reused, refurbished or repaired; components that have been remanufactured; materials that have been recycled. Also referred to as secondary materials. are not a viable sourcing option.

The average share of material processing waste sent to landfill and incineration has gone up since the previous submission cycle, highlighting the need for companies to design out waste and achieve greater material efficiency in manufacturing and processing. 

The share of products designed as per circular economy principles has increased significantly on average, although it is important to note that a majority of the companies do not have sufficient data on this indicator. This metric needs to be complemented with resource management metrics relating to business practice, such as the share of products that get recirculated in practice after initial use.

The above section highlighted a lack of data on the share of revenue that comes from circular services among the majority of companies. However, an increase has been seen. Scaling service based business models has the potential to significantly reduce dependence on virgin material extraction and downstream impacts of products, while creating new revenue streams from circular business models (such as product-as-a-service, refurbishment, and maintenance, etc).

The share of renewable energy in total energy use has declined on average, despite most companies demonstrating progress on this indicator. This indicates that the share of renewable energy has declined by a much greater proportion among companies that demonstrate a decline. There is a need for companies to switch their energy use to renewable energy, whilst achieving a greater energy efficiency and targeting a reduction in absolute energy use.

4. Notes on methodology

In the most recent reporting cycle, the overall score of assessed companies follows roughly a normal distribution peaking at C-, with the majority of companies scoring between B and C- (Figure 11). This gives a good indication that the method, indicator weighting, and scoring have been balanced well. 

Figure 11. Distribution of scores for companies that completed Circulytics in the submission cycle between October 2022 and August 2023. N=66. The number on each bar represents the number of companies that obtained that respective overall score.

Disclaimer

The statistics in this webpage are aggregated and anonymised based on the data submitted by companies to Circulytics. The Foundation makes no representations and provides no warranties to any party in relation to any of the content of the webpage (including as to the accuracy, completeness, and suitability for any purpose of any of that content). 

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