Sustainability Atlas
Circular Economy·13 min read··...

Interview: the builder's playbook for Circularity metrics, LCA & reporting — hard-earned lessons

A practitioner conversation: what surprised them, what failed, and what they'd do differently. Focus on implementation trade-offs, stakeholder incentives, and the hidden bottlenecks.

The global economy is only 7.2% circular—down from 9.1% in 2018—according to the 2024 Circularity Gap Report. Despite $14.3 billion in venture capital flowing into circular economy startups in 2024 alone (a 286% increase from 2022), most organizations struggle to measure what matters. The life cycle assessment software market has grown to $230.1 million in 2024 with a projected 15% CAGR, yet only 20% of companies subject to the EU Corporate Sustainability Reporting Directive validated their data completeness by mid-2024. We spoke with practitioners across sustainability consulting, procurement, and technology to understand what's actually working—and what they'd do differently.

Why It Matters

Circularity metrics and life cycle assessment have moved from academic exercises to boardroom imperatives. The EU's Corporate Sustainability Reporting Directive now mandates approximately 50,000 companies to disclose environmental impacts, including full Scope 3 emissions across value chains. California's Climate Corporate Data Accountability Act requires similar reporting for companies with $1 billion or more in revenue. At least 15 national governments are developing comparable disclosure frameworks.

The stakes are substantial. Companies with circular strategies achieve 23% profit margin increases within three years, according to 2024 industry analysis. ESG-focused assets under management surpassed $40 trillion globally in 2024, and 78% of institutional investors now evaluate circular economy metrics in portfolio companies. The construction sector alone—representing 26.4% of circular economy solutions—is seeing LEED-certified buildings command 13-36% sales premiums.

Yet the measurement infrastructure remains fragmented. Traditional LCA databases primarily represent linear systems, with most datasets showing circularity values close to full linearity. The gap between awareness and implementation creates both risk and opportunity for practitioners who understand the terrain.

Key Concepts

Understanding circularity metrics requires distinguishing between complementary but distinct measurement approaches.

Life Cycle Assessment (LCA) quantifies environmental impacts across a product's entire lifecycle—from raw material extraction through manufacturing, use, and end-of-life. ISO 14040 and 14044 provide the methodological framework, while databases like Ecoinvent supply the underlying impact data. LCA excels at identifying hotspots and comparing alternatives but requires significant expertise and data collection.

Circularity Indicators measure material flows and resource efficiency. The Ellen MacArthur Foundation's Material Circularity Indicator (MCI) has become an industry standard, tracking the proportion of recycled inputs, product longevity, and end-of-life recovery. The World Business Council for Sustainable Development's Circular Material Productivity metric offers a complementary lens.

Environmental Product Declarations (EPDs) translate LCA results into standardized, third-party verified documents. EN 15804 governs construction products in Europe, while ISO 14025 provides the global framework. EPDs enable apples-to-apples comparisons and increasingly serve as procurement requirements.

Circular Life Cycle Sustainability Assessment (C-LCSA) integrates traditional LCA with life cycle costing, social impact assessment, and circularity indicators. Academic research increasingly emphasizes that circularity indicators alone provide only a partial environmental view—integration with LCA is essential for comprehensive assessment.

The regulatory landscape adds complexity. CSRD requires reporting under 12 European Sustainability Reporting Standards (ESRS), with ESRS E5 specifically addressing resource use and circular economy. Double materiality assessment—analyzing both how companies affect the environment and how sustainability issues affect financial performance—represents a new conceptual requirement that only 38% of Wave 1 companies had completed by mid-2024.

What's Working

One Click LCA's Construction Dominance

One Click LCA has emerged as the definitive solution for construction-sector circularity measurement. With over 300,000 datasets and direct integrations with BIM software like Revit and ArchiCAD, the platform enables architects and engineers to evaluate material choices during design rather than after construction. The company raised $43.8 million in November 2023 from PSG Equity and InfraVia to accelerate expansion.

"The breakthrough was making LCA accessible to non-specialists," explains a sustainability director at a major UK contractor. "When your structural engineer can compare steel options in real-time within their design software, circularity becomes a design parameter rather than a compliance checkbox."

One Click LCA's EPD generation workflow has proven particularly valuable for meeting EN 15804 A2 requirements. Projects using the platform report 60-70% time savings compared to traditional consultant-led LCA processes.

Sphera's Enterprise Automation

For companies managing thousands of SKUs across complex supply chains, Sphera's GaBi platform delivers portfolio-scale automation. With over 20,000 process datasets and 1,000 pre-built models, GaBi integrates directly with ERP and PLM systems to calculate environmental impacts without manual data entry.

Eastman Chemical partnered with Sphera in 2023 to automate LCA across their polymer portfolio, enabling real-time carbon footprint calculations for customers. "The integration with our SAP environment means we can provide environmental data alongside pricing and specifications," notes a product sustainability manager. "That's transforming customer conversations."

GaBi's PACT v3 compatibility enables standardized supplier data exchange, addressing the value chain data collection challenge that 57% of companies cite as a major CSRD obstacle.

Ireland's Clinker Replacement Mandate

Policy clarity accelerates measurement adoption. Ireland's 2024 mandate requiring 30% clinker replacement in public projects and banning CEM I (pure Portland cement) creates guaranteed demand for low-carbon alternatives—and requires robust measurement to verify compliance.

The mandate demonstrates how procurement specifications can drive circularity metrics adoption more effectively than carbon pricing alone. Cement producers now compete on verified environmental performance, with EPDs becoming table stakes for public tenders. The Irish experience is influencing policy discussions across the EU.

What's Not Working

The Data Quality Crisis

The most consistent finding across practitioner interviews is the persistent challenge of data quality. PwC's 2024 Global CSRD Survey found that 59% of companies cite data availability and quality as their primary obstacle. Only 20% of Wave 1 companies had validated data completeness by mid-2024, despite reports being due in 2025.

"We thought the technology would be the hard part," reflects a sustainability consultant at a Big Four firm. "It's not. The hard part is getting accurate primary data from suppliers who don't measure what we need, don't want to share what they have, and can't invest in better systems. We're building models on foundations of sand."

Manual tracking from distributed spreadsheets and invoices remains common even in sophisticated organizations. Less than 60% of companies had involved IT teams in CSRD preparation by mid-2024—a fundamental gap that undermines data infrastructure.

Circularity Indicator Limitations

Research increasingly documents the limitations of standalone circularity metrics. A 2024 study in the Journal of Industrial Ecology found that circularity indicators provide only partial environmental views and must be combined with LCA for comprehensive assessment. High circularity scores don't automatically translate to lower environmental impact—a counterintuitive finding that surprises many practitioners.

"We had a client proud of their 80% recycled content packaging," recalls an LCA practitioner. "When we ran the full assessment, the recycling process energy and logistics meant their environmental footprint was actually higher than the virgin alternative. The metric was right; the interpretation was wrong."

The disconnect between circularity measurement and environmental outcomes creates greenwashing risk and investor skepticism. Integrated C-LCSA frameworks address this gap but require more sophisticated implementation.

Standards Fragmentation

The proliferation of measurement frameworks creates compliance complexity. ISO 59000 series standards for circular economy are expected to achieve global adoption by 2027, but current implementations vary widely. Different sectors, regions, and certification bodies apply inconsistent methodologies, making cross-portfolio comparison difficult.

"We report to CDP, respond to EcoVadis, prepare CSRD disclosures, and manage customer-specific requirements—each with slightly different metrics, boundaries, and methodologies," notes a corporate sustainability director. "The reporting burden is consuming resources that could go toward actual improvement."

The absence of harmonized standards for emerging materials—geopolymer cements, recycled composites, bio-based plastics—forces project-by-project engineering justification and limits market adoption.

Key Players

Established Leaders

Sphera (GaBi) — Enterprise LCA platform with 20,000+ datasets and deep ERP/PLM integration. Dominant in automotive, aerospace, chemicals, and heavy industry. Acquired by Blackstone in 2021 for $1.4 billion.

PRé Sustainability (SimaPro) — 30-year market leader in academic and consulting applications. Comprehensive LCIA methods and Ecoinvent integration. Annual licenses range from €6,100-€7,800.

One Click LCA — Construction segment leader with 300,000+ datasets and BIM integration. $43.8 million funding in 2023. Expanding into manufacturing sectors.

Ecoinvent — Non-profit database provider supplying background data to most LCA tools. Over 18,000 datasets covering agriculture, energy, transport, and materials.

Emerging Startups

Makersite — AI-powered product sustainability platform enabling real-time LCA during design. Integrates with PLM systems for automated impact calculation.

Ecochain — Netherlands-based SaaS platform targeting mid-market companies with simplified LCA workflows. Focus on food, packaging, and consumer goods.

Carbmee — German startup applying AI to supply chain carbon management. $25 million Series B in 2023. Strong manufacturing sector traction.

Arbor — Early-stage platform automating LCA for fashion and consumer brands. Focus on user experience and speed to insight.

Circularise — Supply chain traceability using blockchain. API integration with SAP for material passport functionality.

Key Investors & Funders

PSG Equity — Growth investor backing One Click LCA's $43.8 million round. Focus on software and technology-enabled services.

InfraVia Capital Partners — Co-investor in One Click LCA. European infrastructure and growth equity specialist.

Breakthrough Energy Ventures — Bill Gates-backed climate fund investing across circularity and decarbonization technologies.

EU Innovation Fund — €3.6 billion allocated to green industrial projects, including circular economy measurement infrastructure.

Horizon Europe — EU research funding supporting C-LCSA methodology development and database expansion.

Action Checklist

  1. Conduct a data infrastructure audit. Map current data sources for material flows, energy consumption, and waste streams. Identify gaps between what you measure and what CSRD, customer, and investor requirements demand. Prioritize closing the highest-impact gaps before pursuing new metrics.

  2. Select LCA tools aligned with your sector. Choose One Click LCA for construction, GaBi for complex manufacturing portfolios, SimaPro for research-grade analysis. Avoid the common mistake of selecting based on price rather than integration capability.

  3. Integrate circularity indicators with full LCA. Use Material Circularity Indicator for stakeholder communication, but validate with comprehensive environmental assessment. High circularity scores without lifecycle analysis create greenwashing risk.

  4. Engage IT early and often. CSRD-ready data infrastructure requires ERP integration, automated collection, and machine-readable outputs. Less than 60% of companies involved technology teams by mid-2024—don't repeat this mistake.

  5. Build supplier data exchange capabilities. Value chain emissions represent the majority of most companies' footprints. Implement PACT-compatible data exchange protocols and incentivize supplier participation through preferred vendor programs.

  6. Specify EPDs in procurement. Require Environmental Product Declarations for key material categories. Use tools like EC3 (Embodied Carbon in Construction Calculator) to benchmark and compare options. Make verified environmental performance a selection criterion.

  7. Prepare for double materiality. Assess both how your operations affect the environment (impact materiality) and how sustainability issues affect financial performance (financial materiality). This dual analysis underpins CSRD compliance and strategic planning.

  8. Monitor regulatory trajectory. The 2025 Omnibus proposal may delay CSRD timelines for some companies, but the direction is clear. Build capabilities now while competitive advantage exists.

FAQ

Q: What's the difference between circularity metrics and life cycle assessment, and do we need both?

A: Circularity metrics like the Material Circularity Indicator measure resource efficiency—how much recycled content enters your products and how much is recovered at end of life. Life cycle assessment measures environmental impacts across all categories: carbon, water, land use, toxicity, and more. You need both because high circularity doesn't automatically mean low environmental impact. A 2024 study found that some high-recycled-content products have larger environmental footprints than virgin alternatives due to processing energy and logistics. Use circularity metrics for stakeholder communication and target-setting; use LCA for decision-making and verification.

Q: Our company isn't subject to CSRD yet—should we still invest in LCA and circularity measurement?

A: Yes, for three reasons. First, value chain requirements mean you'll receive data requests from customers and investors who are in scope—57% of companies cite value chain complexity as a major CSRD obstacle, creating demand for supplier data. Second, voluntary early adoption builds competitive advantage; companies further along their sustainability journey report greater access to capital, revenue growth, and cost savings. Third, regulatory expansion is accelerating—California's Climate Corporate Data Accountability Act and at least 15 national frameworks signal global convergence. Building capability now is cheaper than scrambling later.

Q: How do we get accurate data from suppliers who don't measure what we need?

A: Start with materiality. Identify the 20% of suppliers responsible for 80% of your environmental impact and focus engagement there. Offer technical assistance—many suppliers lack resources rather than willingness. Implement tiered requirements: accept industry-average data initially, transition to supplier-specific data over time. Use PACT v3 or similar protocols to standardize data exchange. Consider making environmental data provision a contract requirement for preferred vendor status. Some companies are investing directly in supplier measurement infrastructure, recognizing that value chain data is a shared asset.

Q: Which LCA software should we choose?

A: The answer depends on your sector and scale. For construction and building materials, One Click LCA dominates with 300,000+ datasets and BIM integration—it's designed for architects and engineers, not LCA specialists. For complex manufacturing portfolios with ERP integration needs, Sphera's GaBi platform offers automation at scale. For academic research or consulting-grade analysis, SimaPro remains the gold standard with 30 years of methodology development. For budget-constrained or one-off projects, OpenLCA provides open-source functionality. Avoid choosing based on price alone; integration capability and sector-specific databases determine long-term value.

Q: How long does it take to implement a robust circularity measurement system?

A: Plan for 12-18 months to full capability. The first phase (3-6 months) involves scoping, tool selection, and data infrastructure assessment. The second phase (6-9 months) covers data collection, system integration, and methodology development. The third phase (3-6 months) addresses validation, stakeholder training, and reporting process establishment. Companies that underestimate the data quality challenge consistently overrun timelines. Start with pilot products or business units to build capability before portfolio-wide rollout. Engaging IT and procurement teams from day one—not as an afterthought—significantly reduces implementation time.

Sources

The convergence of regulatory pressure, investor scrutiny, and technological capability is transforming circularity measurement from a niche specialty to a core business function. Practitioners who build robust data infrastructure, integrate circularity indicators with comprehensive LCA, and engage suppliers early will capture competitive advantage as the 92.8% linear economy begins its transition. The gap between global circularity rates and corporate ambitions represents both the scale of the challenge and the magnitude of the opportunity.

Topics

circularitymetricsMRVrecycled contentmaterial recoverystandardsunit economics

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