Towards circular economy: European manufacturers tend not to report on their actions

After analysing the data from 226 large manufacturing companies from the European Union, a team of researchers from Lithuania, Poland and Sweden have drawn a conclusion that organisations almost do not mention circular economy principles in their environmental reporting. In their reports, the organisations mostly refer to the effective use of primary flows and minimising waste. However, the other principles related to product lifecycle extending and useful application of materials are not sufficiently disclosed, according to a recent study lead by researchers of Kaunas University of Technology (KTU), Lithuania.

In 2020, the EU Circular Economy Action Plan already includes enhancing disclosure of environmental data by companies in the upcoming review of the non-financial reporting directive and supporting a business-led initiative to develop environmental accounting principles that complement financial data with circular economy performance data. “Reporting the company’s environmental impact is a formal way for the organisations to tell about their other activities than those related to financial matters. As manufacturing organisations are often criticised for their impact on the environment, these reports provide them with the possibility of explaining to the public how they are changing, in what initiatives they are participating, how they are involved in the lives of communities and society”, says Prof Dagiliene. According to her, there is a substantial body of research proving that investors are paying great attention to this kind of reporting – sometimes called social responsibility, sustainability or environmental impact report – while making their decisions.

“While conducting this research, we were fully aware that circular economy is a relatively new term and we might not be able to find direct references to it. Therefore, through the content analysis and the analysis of the companies’ key performance indicators, we were looking at the circular economy principles – how they are reflected in the organisations’ activities. For example, some of the researched companies were from the food and beverage sector, where the recycle principle for diminishing food waste and recovery of raw materials might be applied. However, there was no much communication on these activities in the reports”, says Prof Dagiliene.

Source: Eurek Alert!