Today, the World Business Council for Sustainable Development (WBCSD) unveiled the Circular Transition Indicators (CTI) v4.0 at the World Circular Economy Forum in Helsinki, Finland. The updated framework of metrics helps businesses quantify the link between their circularity strategies and their impact on climate and nature.

With the global economy standing at only 7.2% circular, the need for companies to improve their circular performance is more crucial than ever. Studies have shown that a circular economy can reduce up to 40% by 2050 of current global greenhouse gas emissions and halt and even reverse nature loss. However, businesses have struggled to measure the actual effect of circularity on reducing emissions and preserving nature.

First released in 2020 in collaboration with over 30 companies, CTI provides a universal and consistent way for businesses to evaluate their circularity, identify improvement targets and monitor progress.

The new version of CTI features an extension of its GHG impact methodology, providing a more complete picture of how circularity can affect the carbon footprint of a company’s products and materials. The updated methodology draws from widely adopted carbon accounting practices and focuses on incentivizing the reuse of products and materials across value chains.

CTI v4.0 also introduces a new indicator for nature impact, starting with a focus on land use—a significant driver of nature loss. Companies can now leverage the CTI methodology to evaluate different circular sourcing strategies for reducing their land use impact.

Diane Holdorf, Executive Vice President, WBCSD, said, “This update to the Circular Transition Indicators furthers the value to companies for quantifying the impact of circularity on nature, where business has a critical role to play in protecting and restoring natural systems. Standardizing KPIs for how companies extract, produce and consume resources will improve performance and reporting and result in actions that also help halt and reverse nature loss.”

“CTI 4.0 equips companies with the building blocks to drive a circular transition in their business, their value chains and the systems in which they operate,” Diane Holdorf added. “We invite companies of all sizes and sectors to use CTI v4.0 as the standard measure for setting baselines and measuring progress on circularity.”