Resource duration as a managerial indicator for Circular Economy performance

This paper provides a new indicator for environmental assessment performance linked to Circular Economy. Almost all existing techniques evaluate resource use based on their burden relative to value, while the central point of Circular Economy is to create value through material retention. The existing burden-orientated techniques are therefore unsuitable for guiding managers in relation to Circular Economy objectives. This paper presents a new performance metric, the longevity indicator, which measures contribution to material retention based on the amount of time a resource is kept in use. The measure is composed of three generic components: initial lifetime, earned refurbished lifetime and earned recycled lifetime. Management of these components can be used for decision making and performance assessment in the Circular Economy. The example of precious metals in mobile phone handsets is used to illustrate the general application and suitability of this indicator. Findings show that for materials to be retained, managers should encourage longer lifetime use, increase product return levels for initial use and refurbished phones, and select the most effective recycling processes available. This paper advances performance indicators for Circular Economy, and provides a tool which can be applied at managerial and organizational levels to measure the impact of business decisions on the longevity of precious materials.