Jana-Chin Ru Glutting
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Measuring what matters: The indicators needed to drive social benefits with the circular economy

Overcoming indicator and data challenges for policy- and decision makers

The circular economy can result in a social transformation and improve the way we live and work if embraced—and measured!—with this intention. While the latest IPCC report issues a dire warning, it also notes the circular economy’s potential to improve human well-being and create jobs, in addition to delivering environmental benefits. But for this to become a reality, we need to capture, measure and report on the change we want to see. Primarily, we must better use employment and work-related indicators to monitor progress towards our goal. For these reasons, Circle Economy and PACE have joined forces on the Circular Economy Indicators Coalition (CEIC) to identify and increase the use of a more holistic set of indicators by decision makers engaging with the circular economy. 

Inclusive circular economy decision-making needs quality employment and social impact indicators 

Policymakers and businesses interested in designing and implementing circular economy interventions require data and tools that showcase potential benefits and allow them to monitor their progress and evaluate employment and social impacts. However, given the topic's novelty, the quality and scope of circular employment indicators needed for sound evidence-based policymaking and strategising are limited. Moreover, their connection to specific social indicators is yet to be mapped. This identified gap is imperative to address if these interventions are to be ‘truly’ good alternatives to our ‘take-make-waste’ (linear) economy. This is particularly important for those interested in assessing circular interventions for their employment potential, creating decent jobs, successfully managing the redeployment of workers affected by the transition to low-carbon industries and ensuring the inclusion of disadvantaged groups in changes underway in labour markets and economies around the world.

For the reasons mentioned above, the Circular Economy Indicators Coalition has added an employment track to provide an overview of the existing circular employment and related social indicators. To achieve this, we interviewed many leading institutions, such as the ILO, IndustriALL, OECD, or Rreuse, on the challenges they face in using existing indicators to monitor circular economy interventions' working and social context. This is what we found:

Measuring employment in circular economy interventions

The circular economy can potentially empower existing sectors, enhance local employment through the repair and reuse sectors and create new opportunities for entrepreneurs in new circular business models. Quality data and indicators are needed to design circular strategies that bring the potential for social impacts into the decision-making room. 

Yet, current circular activity is captured inadequately. For example, it is hard to differentiate between maintenance from repair activities or volunteer-based circular activities such as repair cafes or reuse exchange platforms. This is partly due to the lack of a standardised circular economy taxonomy and the rigidity of industrial sectoral classification codes, making it very challenging to get a good overview of the breadth and depth of circular activity. Also, it is tough to disaggregate non-circular activities in sectors deemed ‘circular’. 

In databases, some circular economy interventions, such as recovering and recycling, are overrepresented and more detailed than others. Meanwhile, more novel ones such as rethinking, reusing and repairing are less represented and can also be hard to distinguish from one another. One crucial barrier that hampers these issues being addressed is the extent to which structural adjustment to national accounts statistics would have to be made and coordinated across agreeing parties. 

Capturing circular activity and related employment is tricky 

A recycling company is easily recognised in existing databases as it is a category in industrial classification codes. However, a company that sells product A but also offers take-back and repair or remanufacturing services for that product is classified in these databases as a retailer of product X. Thereby, based on the existing classification codes, it is impossible to know which companies in a certain retail category engage in circular activities and which do not.

Nevertheless, awareness and efforts to improve the granularity of circular economy data relating to employment are growing. Yet less effort is put into sound social indicators to monitor the social impacts of circular economy interventions and the progress towards the overall transition. 

Maximising the social dimension of the circular economy

Circular economy practitioners often view the concept as a response to environmental challenges, therefore overlooking the social implications of circular interventions. Such preconceptions could explain the struggle among the interviewed to link the social dimension of work to circular economy indicators. As identified in our Circular Indicators for Governments report, circular economy indicators are still relatively young. Most efforts so far have focused on measuring transition (and overcoming the challenges in doing so) and less on measuring its social and environmental impacts. The next frontier is measuring the impact of that transition; however, few successful quantitative linkages between circular employment and related social indicators have been established. 

As our latest position paper, ‘Thinking Beyond Borders to Achieve Social Justice in a Global Circular Economy’, put forward, circular jobs are not decent or good by default. Embracing a social lens could, therefore, ensures that circular economy interventions do not perpetuate or exacerbate the same social shortcoming of our existing linear system. Yet, this requires nuanced insights provided by quality data and indicators that capture and track the quality of work, decent working conditions, and skills development in the current and future workplace. 

As the field is developing, there is a need to establish a comprehensive selection of social indicators to monitor and assess the effectiveness of job-to-job transition and overall redeployment strategies in circular economy interventions. Coordinated efforts are needed to develop a taxonomy for circular economy skills competencies and vocational training for circular sectors or jobs. 

Watch and learn: Pioneering initiatives in the field

Things are changing and this field is slowly gaining steam. Our initial scoping and expert interviews have revealed promising initiatives and organisations are finding rigorous and creative ways to measure circular activity despite the above mentioned limitations. 

  • CBS, the Dutch Statistics Office, has creatively explored the extent to which companies are conducting circular activity beyond their industry classification. The methodology employed was a ‘web crawl’ with assisted text analysis, which consisted of systematically going through online/job advertisements. 
  • Circle Economy’s Circular Jobs Initiative has developed the Circular Jobs Methodology, a corresponding indicator measuring the number and range of jobs contributing to the circular economy, and a digital tool: Circular Jobs Monitor. 

Scant, yet present, are organisations trying to address the methodological or data challenges that relate to capturing key social aspects tied to circular activity. 

  • Statistics Finland has developed comprehensive circular economy employment-related indicators by sector, which include not only the # of jobs but also wages, education and location of these jobs. 
  • CEDEFOP has also been actively developing the European Database on apprenticeship schemes or mapping out specific skills related to core circular economy sectors, for example, their latest Too good to waste report on waste management skills.
  • RREUSE, a European network of social enterprises in the repair sector, is developing comprehensive indicators capturing the sector’s economic and social contribution. At the same time, based on its membership base, it is mapping out the skills needed for the repair sector. 
  • WIEGO statistical exercise aimed at collecting survey data on informal waste recyclers in Brazil and workers in the repair sector in India. 

Learn more!

With initial findings from this CEIC track, we have identified the need to improve the quality and breadth of circular employment indicators usage for various stakeholders. Moreover, we soon realised that besides enhancing circular employment indicators, there is a need to improve and develop indicators revealing the quality of these jobs. 

For these reasons, we have developed a digital public tool that will provide a comprehensive overview of indicators, methodologies, and associated relevant resources for decision makers engaged in designing, implementing, and monitoring circular economy interventions. This digital tool will enable them to set ambitious targets and effectively measure the progress and impact of the circular economy.

Finally, we also established an Exchange Platform with the aim of facilitating knowledge exchange among key stakeholders and initiatives, increasing alignment in circular economy indicators, and building partnerships in collaboration with CEIC partners to overcome critical barriers that are too complex to be solved by one stakeholder alone. 

  • Coming soon: Discover our comprehensive CEIC Indicator repository. It showcases curated circular indicators with varied tracks; businesses, financial institutions, and labour market stakeholders. 
  • Be part of the solution and join our Exchange Platform. Get in contact with the CEIC.
  • Interested in quantifying circular jobs at the city or national level? Get in touch with the Circular Jobs Initiative

Feeling curious? Explore our flagship digital tool, Ganbatte/Circular Jobs Monitor

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