The shift to a circular economy entails having a new perspective to measure the different components of the economy. This report proposes a conceptual framework and a set of indicators, that, if fully measured, helps to monitor the transition towards a CE with reduced environmental impacts and increased social benefits. Whilst some of the indicators proposed are already measurable, others exist so far largely conceptually and require further research and elaboration to become operational.
The refinement and implementation of the proposed indicator set will require further work in terms of (i) data availability and quality, (ii) indicator definitions and measurement methods, and (iii) indicator interpretation and use. This goes with an enhanced use of accounting frameworks, in particular the System of Environmental Economic Accounting (SEEA), and an in-depth review of international statistical classifications to ensure coherence across data sets and help harmonise the indicators’ measurement boundaries. It also goes with a further review of novel data sources and sourcing techniques and the preparation of practical and statistical guidance to improve measurement.
As measuring progress towards a CE has become a very dynamic field with many national and international activities, steered by governments, NGOs, academics and business associations, good international coordination is important to distil good practices and capitalise on all the advances. What is needed is a measurement and indicator research agenda, and a roadmap to work towards improving information on a CE in a coordinated way. Such a roadmap would distinguish between adjustments and improvements that can be made in the short- to medium-term, and developments that require further work and research in the longer term.
The 3‑tier structure with a distinction between core indicators, complementary indicators and contextual indicators helps identify the data and indicators that should be prioritised. The following lists outline areas and actions that could be given priority and other necessary developments. Some of this further work might be appropriate work for OECD; some of it might best be undertaken by other organisations or institutions, or by countries.
Areas and actions that could be given priority include:
Continue work to improve the quality and availability of waste statistics and material flow accounts.
Continue work on linking data on waste and materials, and combining them with product and trade statistics.
Further develop policy response indicators building on SEEA accounts and the OECD PINE database, leveraging ongoing OECD work including under the Inclusive Forum on Carbon Mitigation Approaches (IFCMA), and exploiting work on digitalisation, household behaviour and EPR schemes for their suitability for deriving selected indicators.
Continue work on combining physical and monetary data, and on linking data on the contribution of economic activities to a circular economy, to socio-economic data and to data on policy instruments. This requires the application of accounting frameworks, including the SEEA, and the use of coherent statistical classifications. It also requires a review of existing data collections to maximise opportunities for linking different data sets.
Further specify the definitions and calculation methods to be used for core indicators, including their measurement boundaries, related data sources (current, novel) and statistical classifications.
Develop practical guidance for mobilising data and statistics on all dimensions of a CE and implementing a step-wise approach to improving measurement in countries and at international level.
Develop practical guidance on the use and communication of CE indicators considering different audiences and countries’ specific contexts (e.g. socio-economic, institutional, policy).
Other necessary developments include:
Research on and statistical development of indicators that reflect higher R-strategies and the value of materials across their life cycle, including indicators on material flows within production processes and across industries.
Work towards optimising and aligning international statistical classifications (activities, products) for CE purposes.
Research on and statistical development of environmental quality indicators to better reflect how natural resource use and materials management translate into potential impacts on or benefits for climate, air and water pollution, land use and biodiversity, considering both the domestic and the footprint perspective.
Further investigation of novel data sources and innovative measurement approaches and sourcing techniques (see Chapter 5). Future work could investigate into such opportunities further, whilst also further assessing the challenges and how to overcome these.
A review of the applicability of the monitoring framework to the business sector and to specific industries, also considering ongoing work at ISO (International Organization for Standardization)1 on a taxonomy for circular economy measurement and on standards and conformity assessments for organisations (ISO, 2024[19]).
Insights from these developments will help further refine and specify the indicator set. They may also help identify a shortlist of core indicators that could be used as headline indicators to inform high‑level decision-makers and civil society and enable wider communication with the public.