Circular Transition Indicators (CTI): Measure Circularity

Milgro Circular Economy

While circularity is widely recognised as a strategic priority, many organizations struggle to answer a fundamental question: how circular is their business in practice? Without clear metrics, circular ambitions often remain abstract and difficult to implement.

CTI is an enterprise-level circular economy measurement framework developed by the World Business Council for Sustainable Development (WBCSD) in collaboration with companies and knowledge partners such as Circle Economy, GRI and the Ellen MacArthur Foundation. It provides a quantitative, objective and cross-sector method to measure circularity, set targets and track progress.

CTI creates a common language for circular performance. The framework shows:

How materials and resources are used
What design choices enable circularity
How circular use contributes to value creation

More background on the relationship between CTI and sustainability reporting can be found in CSRD and circular economy: Navigating sustainability reporting with the Circular Transition Indicators.

Why is CTI important?

Without a measurement tool, circularity often remains an intention rather than a strategic issue. CTI makes visible where linear risks are and where opportunities for circularity lie. The framework helps with:

Understanding dependence on virgin and critical raw materials
Measuring actual recovery of materials
Assessing design choices that affect circularity
Linking circular use to financial value

These insights support strategic choices, investment decisions and collaboration within the value chain....

How does CTI work?

A CTI assessment begins by determining the scope: a product group, business unit or entire organization, including relevant value chains. Then all inflows and outflows of materials, water and energy are identified.

Inflow, the origin of materials
CTI measures what proportion of the inflow consists of secondary materials and what proportion comes from renewable biobased sources.

Outflow, what happens after use.
A distinction is made between:

Potential: how well are products designed for recovery
Actual: how much of the outflow is actually recovered

Recovery includes reuse, repair, refurbishing, remanufacturing, recycling and in the case of biobased materials also composting or biodegradation. For practical application, the CTI online tool can be used.

CTI and the circular economy

CTI follows the circular economy through four modules:

Step 1: Close the Loop

Focuses on closing material cycles. The core indicator is the percentage of material circularity, based on circular inflows and outflows. Water and energy are also included, with water assessed locally and energy linked to existing renewable energy indicators.

Step 2: Optimize the Loop

Focuses on efficient use and value retention. Key elements include:

Critical Materials.
The proportion of critical raw materials in the inflow reveals where there are supply risks and geopolitical dependencies. Internal lists or public sources such as those from the European Commission can be used for this purpose.

Recovery type and lifetime
CTI looks not only at whether materials are recovered, but also how. Reuse, repair and remanufacturing retain more value than recycling. In addition, CTI encourages an understanding of the actual lifespan of products: how long are they used in practice, regardless of design or warranty?

Step 3: Value the Loop

Link circularity to financial performance, for example through Circular Material Productivity. Circular revenue can also be calculated by linking circularity to product or business unit sales.

Step 4: Impact of the Loop
Measure the effects of circular strategies on climate and nature, and in future versions also on equity. For example, scenarios show that recycled aluminum has a much lower impact on land use and biodiversity than virgin aluminum. Potential greenhouse gas reductions thus become transparent.

From measurement to action with 7 ways to close the gap

CTI shows where an organization stands and where the biggest gap is between linear and circular. The next step is to determine how this gap can be closed in concrete terms. In the roadmap 7 ways to close the gap, CTI plays a central role.

Using CTI as a baseline creates a clear starting point. From there, targeted choices can be made in design, procurement, chain cooperation and investments that are circular and create demonstrable value.