Accounting for circular bioeconomy: reflections from the case study of a value network in the bio-based plastic sector

The use of alternative materials to conventional plastics has received increasing attention in the last years (Paletta et al., 2019). The awareness about marine plastic pollution, together with the ambitious mission to become circular by 2030 (European Commission, 2018) and climate neutral by 2050 (European Commission, 2019) are among the elements that encouraged companies to innovate their product portfolio and business models. Bio-based plastics represent one of the most interesting solutions. Their demand moved from 1.7 Mt in 2021 to 2.2Mt in 2022, with a projection of 6.3Mt in 2027 (European Bioplastics & nova-Institute, 2022; Nazareth et al., 2022). Yet, the EU Commission highlights the need to apply a systemic approach to underpin decisions and prove the positive environmental outcomes of biobased, biodegradable and compostable plastics (European Commission, 2022). Based on a case study methodology, this study examines the use of accounting systems in guiding company decisionsto introduce sustainable and circular solutions. Specifically, the case deals with a value network (Yan et al., 2017), i.e. a multidimensional connectedness (Peltoniemi, 2004), of six actors along a supply chain, from the polymer supplier to the packaging user, passing through layer, film, packaging and packaging machinery manufacturer, who joined efforts to produce a compostable packaging for foodcontact applications. Results report the difficulties to identify and apply an integrated and comprehensive tool able to support the decision-making and assess social, environmental and economic performance simultaneously. Open innovation guided the use of technical data. Profitability ratios and business plans were used in vain to estimate the necessary investments. Environmental impacts were scrutinized by the focal company with the adoption of life cycle assessment (LCA) methodology. Outcomes related to the decision at stake were assessed according to a siloed approach: using different tools for different sustainability aspects. In addition, concerns about being accountable at the network level did not emerge. Nevertheless, the case shows how the use of LCA promoted by the polymer producer can be considered beneficial to the players involved. This company is the focal actor of the entire network (i.e., R&D efforts give them a distinct competitive advantage) and its expertise in measuring environmental impacts created the conditions to disseminate the culture of sustainability and prompt other companies to revise their approach to sustainability measurement. In line with past and present debate on sustainability management accounting (Schaltegger & Wagner, 2006; 2017; Burritt & Schaltegger, 2010; Schaltegger et al, 2022), the study makes evidence of the urgent need to establish accounting systems supporting sustainability-oriented innovation and limit green washing practices or misleading information disclosure with resulting consumer misinformation and hidden negative impacts at the end-of-life (Nazareth, 2022). Implications of this study are that accounting requires a deep dive to comply with the complexity of sustainability and circular economy matters as well as the new logic of doing business. Accounting tools designed to focus on financial performance and limited to corporate boundaries are no longersuitable. Multi-dimensional perspective with an eco-system view through an emphasis on outside-in techniques are fundamental to move accounting forwards and support management decisions to adopt a tangible circular bio-economy model in the bio-based plastics industry.