Reporting and managing circular economy: are standards walking on common ground?

Measuring circular economy (CE) has gained increasing attention among scholars and practitioners in the last ten years (Kirchherr et al., 2017; 2023). Despite the flourishing literature (Ghisellini et al., 2015; 2016), the multitude of metrics, composite indicators and tools led to a heterogeneity of approaches (Murray et al., 2017; Saidani et al., 2018) and, consequently, to “a lack of a structured and standardized method” hindering replicability and comparability (De Pascale et al., 2021; Opferkuch et al., 2023). For their nature, standards address this issue by promoting common understandings and practices (Tecchio et al., 2017; Flynn and Hacking, 2019). Regarding CE management, the first standards aimed to set principles (BSI 8001:2017) and support the implementation of management systems (XP X30-901:2018). More recent standards (ISO 59020 and UNI/TS 11820: 2022) are aimed, instead, to establish a common language “to harmonize the understanding of the circular economy and to support its implementation and measurement” (Heras‐ Saizarbitoria et al., 2023). Furthermore, efforts are currently envisaged in CE disclosure (Opferkuch et al., 2021), as registered by GRI-306 and ESRS E5 on Resource Usage. Nevertheless, the plethora of competing standards may hinder the uptake of CE among businesses. In this sense, it is compelling to investigate commonalities and differences among those standards, and how indicators for internal decision-making and external reporting are interconnected and jointly lead to the ultimate aspiration of CE model to retain the intrinsic value of materials and products along value chains (European Commision, 2015). Our study aims to fill this knowledge gap by adopting a qualitative content analysis (Neuendorf, 2002; Krippendorf, 2018) of the most relevant standards for management and reporting CE. A coding framework has been adopted to categorize and classify the standards’ structures and contents. The coding process was performed by two authors and diverging coding results were discussed with a third researcher to reach consensus. Results show how some standards present features that are still anchored to a recycling economy, while others adopt a more comprehensive concept of CE linked with sustainable development goals. Our results highlight differences and similarities in CE concepts and KPIs among standards, suggesting caution when boards are called to choose a specific standard for management and disclosure. This work is important because standards adoption affects actual companies' practices. As reported by Vigneau et al. (2015), reporting standards usage influences the management structure, intra-organizational practices, the choice of corporate social responsibility activities, and the interpretation of corporate performance. Additionally, results provide a practical contribution to corporate managers and practitioners, by offering a comprehensive overview of the nature of the standards and their features, thus orienting organizations in selecting those that better suit their needs. From a theoretical point of view, the study contributes to the ongoing debate on measuring CE, by narrowing the focus on the role of standards towards the harmonization of CE management and reporting practices. This study is not free of limitations. First, the investigation relies on the limited number of standards analysed. Second, among GRIs, only GRI:306 has been considered. Third, ISO 59000 and EFRAG 5 are still in the draft version. However, these limitations offer important insights to expand the study to all the standards aimed at measuring CE. Additional future research could deepen the support of this study to companies that are including CE reflections within their control systems and sustainability reports.