Achieving social benefits in the circular economy

This article is written by Jana-Chin Rué Glutting, Consultant, Circle Economy, with contributions from Lotte Holvast, Programme Manager, PACE.

• The problem: The lack of quality employment and social impact indicators for circular economy interventions.
• Why it matters: With critical indicators measuring the social aspects of circular economy activity, social benefits will fully be reaped.
• The solution: The Circular Economy Indicators Coalition (CEIC) is developing a comprehensive set of social indicators that capture and track the quality of work, decent working conditions and skills development in the current and future work in circular economy sectors.

The circular economy can result in a social transformation and improve how 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 wellbeing, create jobs and deliver environmental benefits. But for this to become a reality, we must 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 goals. 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, the quality and scope of circular employment indicators are limited and need to be mapped to specific social indicators. Addressing this gap is crucial to create ‘truly’ good alternatives to our ‘take-make-waste’ (linear) economy and ensure circular economy interventions have employment potential, provide decent jobs and include redeployed workers and disadvantaged groups.

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 leading institutions, including the ILO, IndustriALL, OECD, and RREUSE, to identify the challenges in using current indicators to monitor circular economy interventions' working and social context. This is what we found:

Measuring employment in circular economy interventions

The circular economy has the potential to empower existing sectors, stimulate local employment through the repair and reuse sectors and create new opportunities for entrepreneurs in new circular business models. Quality data and indicators are crucial to designing circular strategies incorporating the potential for social impacts into the decision-making room.

Yet, current circular activity is captured inadequately due to difficulties differentiating between various activities and the need for a standardised circular economy taxonomy. Rigid industrial sectoral classification codes make knowing the breadth and depth of circular activity challenging. Circular economy interventions are not equally represented in databases, with recovering and recycling activities being more detailed than rethinking, reusing and repairing. Addressing these issues requires structural adjustments to national accounts statistics and coordination across many agreeing parties.

Despite efforts to improve circular economy data granularity relating to employment, less focus is given to related social indicators that monitor its social impacts and progress towards the transition.

Maximising the social dimension of the circular economy

Circular economy practitioners overlook the social implications of circular interventions, explaining the struggle among the interviewed to link the social work dimension to circular economy indicators. As identified in our Circular Indicators for Governments report, circular economy indicators are still relatively young. Most efforts have focused on measuring the transition process (and overcoming the challenges) and less on measuring its social and environmental impacts. While the next frontier is measuring the effects of that transition, only some successful quantitative linkages between circular employment and related social indicators exist.

Circular jobs are not decent or good by default.

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. A social lens is needed to ensure circular economy interventions improve or at least do not perpetuate or worsen the social shortcoming of our existing linear system. Yet, this requires quality data and indicators that capture and monitor work quality, decent working conditions, and skills development in current and future workplaces operating in a circular economy.

As the field develops, a comprehensive selection of social indicators is needed to monitor job-to-job transition and redeployment strategies in circular economy interventions. Coordinated efforts are required to create a taxonomy for circular economy skills competencies and vocational training for circular sectors or jobs.

Watch and learn: Pioneering initiatives in the field

Despite their limitations, some organisations are innovatively addressing methodological and data challenges to measure critical social aspects of circular activity effectively:

• CBS, the Dutch Statistics Office, 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.

• Statistics Finland has developed comprehensive circular economy employment-related indicators by sector, including the number of jobs, wages, education and location.

• Circle Economy’s Circular Jobs Initiative has developed the Circular Jobs Methodology and a digital tool, Circular Jobs Monitor[¹], to measure the number and range of jobs contributing to the circular economy.

• CEDEFOP is actively developing the European Database on apprenticeship schemes and mapping out specific skills for core circular economy sectors, such as waste management skills, in their latest ‘Too Good to Waste’ report.

Learn more!

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[²]. This digital tool will enable them to set ambitious targets and effectively measure their progress and impact.

Finally, we also established an Exchange Platform to facilitate knowledge exchange among key stakeholders and initiatives, increase alignment in circular economy indicators, and build partnerships with CEIC partners to overcome critical barriers too complex for one stakeholder alone.

• Coming soon: Explore our extensive CEIC Indicator repository, featuring curated circular indicators for 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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