Originally, financial reporting was intended to require disclosure of information that shareholders needed to make informed investment decisions. This historically was narrowly focused on management decisions and financial figures. The definition of what information is essential for an investor has changed now that performance in Environmental, Social, and Governance (ESG) has been linked to profitable financial performance. Over time, reporting requirements around ESG were added to show a more complete picture of company health. This picture illustrates the financial performance and performance against goals related to sustainability, employee related data, and governance. The GRI (Global Reporting Initiative) provides standards for ESG reporting. Included in the reporting are standards on metrics used to describe performance and resource use such as water, energy, waste, emissions and a host of other attributes. A newer standard on waste (GRI 306: Waste 2020) attempts to incorporate circularity by providing the ability to report on different specific dispositions of waste. While this effort is useful for tracking the disposition of products at the end of their useful life, it does not provide a way for stakeholders to publicly share and state the inherent benefits of utilising products that are not made from new or virgin materials.
Moving to a circular economy will take massive effort from all parts of the supply chain and in all parts of the product life cycle. However, there is little incentive to purchase circular products and services. One way to encourage moving to a circular economy is to provide companies a way to report environmental benefits regarding their circular economy purchasing efforts in an accountable and transparent way. Purchasing a refurbished or remanufactured piece of equipment has a lower environmental impact than the creation of new equipment using virgin materials. The environmental impacts due to extraction of raw materials and the manufacturing phase(s) can be avoided or reduced by remanufacturing or refurbishing. Currently there is no measure for creating circular loops within a product’s lifecycle.
Several governmental directives and proposals including the EU Circular Economy Action Plan and the US Securities Exchange Commission proposal for “Enhancement and Standardisation of Climate-Related Disclosures” will require reporting additional environmental impacts and benefits information. This thematic session would focus on discovery of existing methodologies for measuring circularity and would present proposals for measuring, reporting, and disclosing circularity claims in support of new directives and legislation
Session owners: Erin Gately and Sean Mangus, Iron Mountain.