CIRCULARITY ASSESSMENT OF COMPANIES

Why do we need a circularity assessment? Moving to a circular economy is increasingly recognized as a key objective by companies & governments Creating impact in the circular economy requires data and a scientific approach to guide decision making Need for a tool to evaluate and rank companies on circularity

Current ESG indicators are insufficient Focus on relative rather than absolute performance Focus on improvement against current state rather than distance from ideal state Focus on policies and intentions rather than performance Do not show where impacts are coming from Are not linked to changing context, key planetary boundaries, shifting market and technology landscapes

What will the Circularity Assessment do? The Circularity Assessment is a set of indicators and an automated tool that: Is able to comprehensively assess any type of organization on their performance against circular economy objectives Provides insights on risks that companies and investors face as a result of not adopting circular principles Is conducted on an annual basis to provide a strong informational feedback loop to push organizations to move towards circularity

Public Circularity Index of Companies We envision the Circularity Assessment to eventually enable the creation of a Public Circularity Index that ranks companies CompanyRating Leasing, Pty95 Sharing, GmbH89 Music, Sh.A.34 Balloons, Inc.65 Chairs, Ltd.24 Materials, ApS80 Energy, Oy45 Component Harvest, AG85 CompanyRating Recycling, LP55 Upgrade, Ltda70 Reuse, Plc Ltd93 Solar BV70 Algae, S.A.75 Car Parts, LLC30 Modular, NV87 Carpet, AS61

Refined framework for circularity

Categorization of analysis Input Risks Product / Service Design End-of-Use Value Preservation Organizational Improvement Planetary Impacts Assesses the circularity of the organization’s direct and indirect materials, energy, and labor inputs Assesses the circularity of design and delivery of the organization’s products and services to society Assesses the circularity of the organization’s product end-of- use scenarios and production waste flows Assesses the transparency, leadership, and vision of the organization in adopting circular principles Assesses the impact of all of the organization’s activities on key planetary boundaries

Input Risks – Key Circularity Principles Input Risks Materials and Resources Materials are from renewable sources Materials are from secondary sources rather than primary sources Material needs don't compete with other societal needs for material Materials are not scarce or critical Materials aren't sourced from countries with geo-political risk Materials are sourced from local sources where possible Energy Energy sources do not require critical resources Energy comes from renewable and on-site sources Energy needs don't compete with other societal needs Energy is recovered and reused where possible Labor Job creation is promoted through a dedicated workforce Employee labor rights are supported Worker health and safety is prioritized Labor isn't sourced from countries with geo-political risk

Product / Service Design – Key Circularity Principles Product / Service Design Design Characteristics Products utilize materials, energy, and labor in a smart and efficient manner Products are designed such that their lifetimes fit their intended use and technological maturity Products are designed in a modular fashion if appropriate for their typology Products are biodegradable if appropriate for their typology Products are recoverable and recyclable if appropriate for their typology Products are able to be upgraded if appropriate for their typology Products are able to be easily disassembled and components reused if appropriate for their typology Products do not use a significant amount of mixed materials and alloys Products use circular business models if appropriate for their typology Products do not pose a significant risk or operating hazard for users Packaging Packaging material is minimized Packaging is reusable if appropriate for product typology Packaging is biodegradable or recycable if appropriate for product typology Usage Energy sources do not require critical resources Energy comes from renewable sources Energy needs don't compete with other societal needs

End-of-Life Value Preservation – Key Circularity Principles End-of-Life Value PreservationEnd of life pathways End-of-life products are mainly upgraded and repaired End-of-life products are refurbished and remanufactured as a second priority Waste flows are mainly recovered and reused End-of-life products and waste flows are recycled End-of-life products and waste flows are incinerated for energy recovery End-of-life products and waste flows are disposed or lost as a last resort

Organizational Improvement – Key Circularity Principles Organizational Improvement Transparency Company is reports to a variety of initatives, is involved in various certification schemes Company reporting makes references to circular economy thinking Leadership Company sets clear targets for achieving circularity Company engages various stakeholders toward circularity Company pushes government policies towards circularity Company has executive level or board level members dedicated to circular thinking Company provides incentives for employees to achieve circularity targets Company leads supplier and industry initiatives on circular thinking

Planetary Impacts – Key Circularity Principles Planetary Impacts Land Company has minimal environmental impact on acidification, land use, toxicity, resource depletion AtmosphereCompany has minimal enviromental impact on climate change, ozone, smog WaterCompany has minimal environmental impact on eutrophication, toxicity, water depletion SocietyCompany has minimal environmental impact on human toxicity, particulate matter