New Metrics

Better Data and Metrics:
Next Steps in Powering a Circular Economy?

Scotland remains one of the world’s leading nations on circular economy thinking — this year Glasgow will host the Circular Economy Hotspot, an international event and trade mission that will showcase the country’s progressive approach to materials and resource use.

By Maxine Perella | Published 6 years ago | About a 4 minute read

Scotland remains one of the world’s leading nations on circular economy thinking — this year Glasgow will host the Circular Economy Hotspot, an international event and trade mission that will showcase the country’s progressive approach to materials and resource use. On the policy front, a new circular economy bill is expected to be unveiled by the Scottish government by the end of this parliamentary term, which will provide governance to its Making Things Last strategy.

“We’re seeing more interest in the circular economy than carbon now,” notes Jamie Pitcairn, a director at consultancy Ricardo Energy & Environment. Speaking at a conference in Edinburgh last week hosted by Scotland Policy, Pitcairn said that he hoped the new bill would address one area of the circular economy that needs more attention — that of progress measurement.

Much has been made of the business benefits in shifting towards circularity. In Scotland alone, the circular economy represents an estimated annual £2.8 billion economic opportunity, rising to £23 billion in the UK and £1.8 trillion in Europe. But the traditional metrics used to measure waste management such as weight-based recycling, landfill diversion rates or costs per bin lift aren’t suitable for more circular activities.

And that’s before trying to quantify resource flows in and out of industrial systems and economies to establish where supply and demand opportunities for recaptured materials might be. According to Pitcairn, a lack of published data in this area, even at company level, presents a challenge.

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“We don’t have a good enough understanding of what businesses produce, or what their material feedstocks are,” he told delegates. “Large businesses are producing large amounts of by-products, but nobody knows about it. We need to make this data available to ensure those by-products can be valorized to their full potential.”

Pitcairn said more data intelligence on material inputs and outputs could help in the development of new metrics for circularity. These metrics may be based around factors such as added value, material leakage, product longevity, service business models, connectivity and collaboration. The metrics could also sit alongside new sets of indicators reflecting societal behavior and business operations.

Indicators that reflect citizen awareness, engagement and participation in the circular economy could help measure the uptake of new forms of consumption, whether that’s buying a remanufactured product, using a sharing platform or leasing an asset. Indicators could also depict eco-innovation activities as companies look to adapt their business models to offer more durable goods or to embrace closed-loop systems.

On a wider level, moves towards consumption-based carbon accounting to understand consumer behavior as a basis for climate policies are starting to happen. However, most corporate reporting systems are not set up yet to measure consumption-based metrics — something that will need to change going forward.

One circular business activity that Scotland is looking to tap into more deeply is remanufacturing. Dr Winifred Ijomah, technical director at the Scottish Institute for Remanufacture, said the country’s strong transport links and advanced engineering skills, industry and workforce mix were well suited for capitalizing on this emerging market opportunity.

However, she acknowledged there were still several barriers to overcome, one being the economics. “We cannot get the same cost, quality and lead time from remanufacture compared to conventional manufacture,” she told delegates, adding that these pressures will only heighten as manufacturing activities become increasingly digitized.

Ijomah said developing automated remanufacturing capabilities — such as Apple’s Liam robot — would become necessary, as would more operational efficiencies in supply chain reverse logistics. One UK project, AutoReman, is exploring how robots and cobots — collaborative robots — can be utilized to support product disassembly during remanufacture. Both Caterpillar and BMW are supporting the five-year initiative.

Ijomah added that remanufacturers lack both the capital and expertise to develop these types of business models on their own, and that policy had a role to play. Here the UK could learn from what its cousins in the US are doing. The US Federal Vehicle Repair Cost Savings Act of 2015, which requires federal agencies to encourage the use of remanufactured parts in vehicle repairs, aims to save government coffers whilst promoting the use of less expensive remanufactured parts for repairs.

Ijomah said if such a policy were adopted by the Scottish government, it would send a strong signal of approval and trust in the remanufacturing sector. Support to address non-technical barriers such as uniformity of standards in the reuse sector to raise customer confidence in refurbished products would be helpful as well.

“We also need to develop our skills and services, and look to export our expertise outside of Scotland,” she told delegates.