Here, we have visualised anonymised data from Circulytics 1.0 company assessments submitted between Jan - Aug 2020.
For the best experience view these visualisations on a desktop, or you can see the full collection of our dashboards here: https://public.tableau.com/profile/ellen.macarthur.foundation#!/
This is a significant finding. Large, vertically integrated companies can dictate the pace towards a circular economy shift. Often seen as ‘part of the problem’ in environmental terms, they are now realising the opportunities to become part of the solution and the importance of measuring their progress.
Of the 604 companies that signed up, 96 companies completed their Circulytics assessment and received a scorecard. Of those:
This 16% completion rate is lower than expected. It is partially attributable to the Covid-19 pandemic which started to impact companies’ operations in Circulytics’ main geographies from March onwards.
We are closely observing the situation, and helping companies to complete their assessments in 2021.
The overall score of assessed companies follows roughly a normal distribution except for a spike at the A- score (Figure 5). This gives a good indication that the method, indicator weighting, and scoring have been balanced well. The A- spike can be attributed to service-based companies (Figure 6), potentially in part due to the fact that the most difficult data to gather for a Circulytics assessment is on material flows.
We will continue examining the score distribution with Circulytics 2.0 assessments in 2021. As companies get increasingly familiar with the circular economy and what circular material flows mean for them, we expect this difference between company types to reduce over time.
Circulytics 1.0 scores have been mapped onto the new scoring scale for Circulytics 2.0. Read more on page 19 of our Method introduction.
A Circulytics company scorecard shows more than just an overall score and provides a breakdown by theme. Read more on page 3 of our Method introduction.
The Circulytics indicators are grouped into 11 themes.
Enablers category has five themes:
The Enablers category consists of qualitative indicators that are used to assess how well-positioned a company is to transition to a more circular way of doing business in the future. Enablers, such as strategic prioritisation of circular economy, are almost always precursors to outcomes, such as circular material flows.
Outcomes category has two themes:
Note: In Circulytics 2.0, the Outcomes category has six themes.
The theme-level scores give companies a more tangible insight into the areas of their business where they are performing better or worse.
On average companies performed better in the Enablers category (Figure 7). We would expect to see this because Enablers can be the first steps in a company’s journey, and indicate how well-positioned a company is to transition to a more circular way of doing business in the future.
When looking at the scores theme by theme, we see relative consistency across the Enablers themes (strategy and planning, innovation, people and skills, systems,processes and infrastructure, external, engagement) across different geographies and company size (revenue and #employees).
When looking at the theme level scoring distribution by industry we have a sufficient number of company assessments to display industry averages on three industry archetypes (Figure 8).
Intermediate products and consumer/end products both have an average overall score of C, whereas services has an average overall score of B-. When we dive into the category and theme level average scores, we can see that all three industry archetypes have an average Enablers score of B- and it is in the Outcomes, where services outperforms intermediate and consumer/end products. As mentioned above, data on material flows is the most difficult to collect, and is likely why we see service-based companies outperforming product manufacturers in the Outcomes, while the Enablers remain consistent across all three archetypes.
When looking at the category scores for different company sizes (Figure 9), we see relative consistency in the Enablers and an indication that smaller companies are performing better in the Outcomes.
When looking at annual revenue as a proxy for company size (Figure 9), the average score for the Enablers category is B-, across all four revenue buckets. The same is true when looking at the number of employees as a proxy for company size (Figure 9), with just one group shifted into the B range (10-100 employees; average score B).
Interestingly, the Outcomes scores are slightly lower in large companies, with an average D score for companies with an annual revenue greater than 1B USD annually (versus an average score of C for companies with an annual revenue between 1M-1B USD and an average score of B- for companies with an annual revenue less than 1M USD). This indicates that smaller companies perform better in the indicators measured in the Outcomes (see Indicator List) and is likely attributable to the complexity to aggregate material flow data in large companies that operate in multiple geographies and have numerous manufacturing sites. We will continue looking into this assumption in 2021 using feedback gathered from companies, and discussions with our network.
The data we have collected so far, suggests that the assessed companies regardless of size, industry or region, have started to create the enabling conditions needed to transition to a circular way of doing business.
*Market cap: 07/12/2020