1. Overview of Circulytics
Circulytics was first launched in January 2020. Each year, submissions are possible between October and August. Scheduled updates and new features are introduced during September. In this first section, we will look at the broader characteristics of companies that have taken part in Circulytics since its launch. Here you will find anonymised data from company assessments submitted between January 2020 and August 2022.
1.1 Companies that have signed up
1,884 companies have signed up to Circulytics, of which 57% (1,065 companies) are headquartered in Europe (Figure 1)
17% (317 companies) have an annual revenue of more than USD 1 billion (Figure 2)
The total number of companies that signed up for Circulytics has increased by nearly 49% since October 2021. Although the majority of sign-ups are from companies headquartered in Europe (57%), there has been a significant increase in the number of sign-ups from other geographies since the previous reporting cycle. In particular, sign-ups from Oceania, Asia and Africa increased by 75%, 69% and 69% respectively, indicating a wider geographical spread in this reporting cycle. The number of companies headquartered in North America and Latin America has also increased, comprising 17% and 10% of total sign-ups, respectively. This highlights a growing interest in measuring 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. performance across a wide spectrum of geographies. As circular economy performance measurement is starting to feature in mandatory non-financial reporting standards, we expect this geographical spread to continue to grow.
In addition, companies ranging in size, from start-ups to global corporations, have signed up for Circulytics. Although most companies have an annual revenue of less than USD 1 million (39%), the total number of companies that have signed up include a wide range of annual revenue bands (Figure 2) — including 17% with an annual revenue of more than USD 1 billion. This is an important finding as it highlights that momentum towards a global circular economy transition is increasing across a diverse range of company types and sizes.
HQ region of companies that have signed up
Figure 1. Headquarter location of companies that signed up for Circulytics between January 2020 and August 2022. N=1,884
Annual revenue (USD) of companies that have signed up
Figure 2. Annual revenue in USD of companies that signed up for Circulytics between January 2020 and August 2022. N=1,884
1.2 Companies that have completed the assessment
Of the 1,884 companies that signed up before August 2022, 257 companies have completed their Circulytics assessment and received a scorecard. Of those:
35 companies completed an assessment in the latest, as well as the preceding reporting cycle; eight completed an assessment in just the latest and the first reporting cycle. In total, 15 companies have completed Circulytics in all three reporting cycles so far.
72% (185 companies) have their headquarters in Europe (Figure 3)
37% (87 companies) are large companies with an annual revenue of more than USD 1 billion (Figure 4)
The number of completed assessments from companies with a large annual revenue (greater than USD 1 billion) has almost doubled since the previous reporting cycle, which may be a result of forthcoming mandatory reporting on circular economy in Europe. The fact that companies across all revenue bands have completed assessments highlights 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. Similarly, a significant number of Circulytics submissions from companies across different industry groups (Figure 5) indicates that companies across different sectors have found Circulytics to be a relevant, valuable, and comprehensive tool to measure their company’s circular economy performance.
HQ region of companies with completed assessments
Figure 3. Headquarter location of companies that completed a Circulytics assessment between January 2020 and August 2022. N=257
Annual revenue (USD) of companies with completed assessments
Figure 4. Annual Revenue in USD of companies that completed a Circulytics assessment between January 2020 and August 2022. N=257
Industry group of companies with completed assessments
Figure 5: Industry Group of companies that have completed Circulytics between January 2020 and August 2022. N=257
2. Circulytics reporting cycle: October 2021 - August 2022
Circulytics is designed to be completed by companies on an annual basis so they can track their progress. In October 2021, Circulytics was updated in order to provide a more comprehensive assessment and improve the user experience. This section will examine the results obtained by companies that completed Circulytics in this reporting cycle, between October 2021 and August 2022.
2.1 Company scores
The overall score of assessed companies follows roughly a normal distribution, with the majority of companies scoring between B- and C- (Figure 5). This gives a good indication that the method, indicator weighting, and scoring have been balanced well.
Score distribution of participating companies with completed assessments
Figure 6. Distribution of scores for companies that completed Circulytics in the reporting cycle between October 2021 and August 2022. N=102. The number on each bar represents the number of companies that obtained that respective overall score.
2.2 Company scores by theme
The Circulytics company scorecard shows more than just an overall score — it also provides a breakdown by themes (read more on page 4 of our Method Introduction). Circulytics consists of 11 themes, which are grouped into two categories.
The first category is Enablers, which consists of five themes:
Strategy and planning
Innovation
People and skills
Operations
External engagement
The Enablers category consists of qualitative indicators that are used to assess how well-positioned a company is to transition to a more circular way of doing business in the future. Enablers, such as strategic prioritisation of the circular economy, are almost always precursors to outcomes, such as circular material flows.
The second category is Outcomes. It has six themes, but only a subset is relevant for any given company depending on its characteristics. The themes are:
Products and materials
Services
Plant, property, and equipment assets
Water
Energy
Finance
The Outcomes category measures actual circular economy results at a company level, such as circular material flows, water flows, energy use, service provision, and product design, or procurement and decommissioning of plant, property, and equipment assets.
The theme-level scores give companies a more tangible insight into how they are performing in specific areas of their business, in order to highlight success and identify areas for improvement. In order to analyse the scores by theme, this section aggregates the results obtained from companies by revenue bands, industry groups, and headquarter location.
On average, small sized companies (with an annual revenue of up to USD 10 million) have achieved higher scores than larger organisations (with an annual revenue equal to or above USD 500 million) (Figure 7). Smaller companies are sometimes able to implement change more quickly, allowing them to transition to a more circular way of doing business. Data availability is also a challenge that increases with company size. This is evident especially in the Outcomes category scores across annual revenue, as smaller companies tend to score more highly in this category. In addition, the gap between the Enablers and Outcomes category scores is the widest among large corporations with annual revenue greater than USD 10 billion. In general, companies have performed better in the Enablers category than Outcomes across all revenue brackets. We would expect to see this, because 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.
Figure 7 shows the average Circulytics scores by annual revenue, industry group, and headquarter location. In order to guarantee anonymity, only clusters containing more than five company submissions were aggregated and displayed. In this regard, enough data was gathered to show all revenue groups, five industry classifications (consumer/end products, intermediate products, upstream processing, infrastructure, and services) and four regions (Asia, Europe, Latin America, and North America).
Average Circulytics score by annual revenue ($USD)
Average Circulytics score by industry group
Average Circulytics score by headquarter location
Figure 7. Average company score by annual revenue, industry group, and headquarter location for companies that completed a Circulytics assessment between October 2021 and August 2022. Click on the arrow at the bottom right of the chart to view different parameters. N=102 is the total sample size, which can vary depending on parameter selection.
3. Change in scores between Circulytics assessments
This third section covers the evolution of scores between Circulytics reporting cycles. Due to improvements made to the Circulytics tool, including regrouping of the Outcomes indicators into six themes in October 2020, not all themes within the Outcomes category are directly comparable between the first two reporting cycles. Thus, only the latest two reporting cycles are selected to show comparison across all theme scores over time.
A total of 35 companies repeated the assessment in the two reporting cycles October 2020 - August 2021 and October 2021 - August 2022. As companies become increasingly familiar with the reporting process and data availability improves in the light of upcoming mandatory reporting on circular economy, it is expected that the number of companies annually tracking their progress will increase. This will allow for a more robust sample size for evaluating the observed initial trends.
3.1 Score change results
Figure 8 shows the change in score between the two most recent Circulytics reporting cycles.
Change in score between Circulytics versions
Figure 8. Average change in score between the two reporting cycles. The chart represents the average change in score within each theme or category. N=35. This graph aims to capture the trends of companies that completed a Ciruclytics assessment in the two most recent reporting cycles (October 2020 to August 2021 and October 2021 to August 2022), and is not based on a representative sample size.
While the overall and Outcomes category scores between the two reporting cycles improved only slightly (1%), the Enablers category scores increased by 4% on average. This is indicative of overall progress in circular economy performance of companies that have consistently completed assessments in the latest two reporting cycles. Several themes in the Outcomes category (strategy and planning, people and skills, and external engagement) have, on average, seen an improvement. The more significant change in Enablers score is expected, as Enablers are often precursors to tangible Outcomes and thus are more likely to be the first steps in a company’s circular economy journey.
Within the Outcomes category, while the average change in scores indicate an increase in two themes (products and materials and energy), a decline in scores was observed in the services and water themes. The average difference in scores for the plant, property, and equipment assets theme was negligible between the two reporting cycles. The increase in scores across certain themes can be partially attributed to better data availability, which is a prerequisite to measuring tangible progress.
As the circular economy starts to feature in mandatory reporting for companies in Europe, more companies can benefit by stimulating the tracking of circular economy related company-level data and generating insights that inform design, procurement, and strategic decision making. Thus, as companies continue to repeat the Circulytics assessment on an annual basis, data availability is likely to improve, and we expect continued progress as decisions regarding changes to linear economic systems begin to take effect.