Developing key performance indicators for circular business models

Abstract

The objective of this thesis is to identify the key circular economy performance indicators for the small and medium-sized circular business models in Finland. Businesses and especially circular business models have a crucial role in the transition towards the circular economy. While the circular economy is gaining popularity among public and private sector, to date circular business models and their performance measurement have been studied only a little in academia.

The circular business models examined in this study are: product as a service; product- life extension; renewability; resource efficiency and recycling; and sharing platforms. The selection of these circular business models is based on the categorization made by the Finnish Innovation Fund Sitra, which is one of the leading organizations promoting the circular economy in Finland.

The research methodology of this thesis is constructive case study and the motivations are mainly practical; the objective is to help current and future businesses operating in the circular economy measure their circular economy performance. This thesis aims to achieve that objective by identifying useful indicators, of which some might become as key performance indicators for the circular business models.

The research findings indicate that simplified performance indicators covering all the aspects of the circular economy are challenging to develop. Therefore, the main practical contribution of this thesis, i.e. the managerial construction is formed from two indicator pools: the first pool contains internal strategic and operational circular economy performance indicators and the second pool includes the more comprehensive circular economy related indicators.

During the thesis project it became apparent that the research question is currently an important discussion point. Many new academic researches and other surveys such as the report made by WBCSD were published during the year.