Your Playbook to overcome circularity data issues with Circular IQ
Streamline compliance, empower reporting, and achieve sustainability goals with auditable material composition insights
Why Material Composition Data Matters
The materials we use are the foundation of a regenerative circular economy. Information about the material composition influences every stage of a product’s life cycle — from raw material extraction to recycling.
With regulations like CSRD and ESRS E5 becoming stricter, precise data is essential for:
Reducing
environmental impact
Complying
with regulatory frameworks
Improving
reusability and recycling
Role in Product Lifecycle Management
Material composition data influences every stage of a product’s lifecycle:
Enables tracking of raw material sourcing for sustainability
Optimizes material choices for durability and reusability
Provides transparency to end-users regarding material properties
Ensures efficient recovery and reduces landfill waste
How do all of these connect with regulatory frameworks and reporting standards
GRI 301, ESRS E5, ISO 14021 & 59020, CTI Framework
Understanding material composition on the inflow and outflow side of your business is essential for:
CSRD (Corporate Sustainability Reporting Directive) and ESRS E5 (Environmental Standards for Resource Use and Circular Economy) mandate businesses to disclose resource use and circularity
Accessing and analyzing your material composition data to comply with ESRS E5
Business Benefits
Leveraging material composition data provides:
Enhanced Compliance
Streamlines reporting processes, aligning with ISO 59020 and other standards
Risk reduction
Minimizes exposure to supply chain risks and regulatory fines
Improved decision-making
Identifies sustainable alternatives and reduces costs
Understanding the Challenges
Managing sustainability data presents significant hurdles for organizations aiming to align with the circular economy and comply with regulations like CSRD and ESRS E5. Key challenges include:
One of the most critical roadblocks is the limited access to complete and accurate material composition information. This challenge stems from:
Supplier Reluctance
One of the most critical roadblocks is the limited access to complete and accurate material composition information. This challenge stems from:
Capability Gaps
Smaller suppliers may lack the technical resources or expertise to provide precise data
Fragmentation
Data often exists in silos, scattered across various teams or systems, making it difficult to centralize and integrate
Impact
Without reliable data, organizations struggle to establish a solid baseline for sustainability efforts, leading to delays in compliance and reduced operational efficiency
The quality of material composition data can vary widely, presenting additional hurdles:
Inconsistencies in Format
Suppliers may provide data in multiple formats, such as PDFs, spreadsheets, or custom templates, complicating data processing
Accuracy Issues
Errors or outdated information can undermine confidence in decision-making and reporting
Completeness
Missing data points make it difficult to create comprehensive analyses or generate accurate reports
Impact
Poor-quality data leads to inefficiencies, increased costs, and risks of non-compliance
Managing sustainability data at scale becomes increasingly complex as organizations expand their operations globally:
Supply Chain Complexity
Large, multinational supply chains generate massive amounts of data from diverse sources, creating logistical challenges
Aggregation Difficulties
Collecting and harmonizing data from thousands of suppliers and products requires robust systems and processes
Impact
Without scalable solutions, organizations face bottlenecks that slow progress, especially when aiming to meet ambitious sustainability goals
Navigating the intricate landscape of regulations is another major challenge:
Evolving Requirements
Frameworks like CSRD and ESRS E5 require organizations to disclose increasingly granular information about their material composition and sustainability impacts
Global Standards
Compliance demands often vary by region, requiring businesses to juggle multiple regulatory frameworks simultaneously
Impact
Failing to comply can result in financial penalties, reputational damage, and loss of stakeholder trust
Many organizations lack the technological infrastructure necessary to manage sustainability data efficiently:
Insufficient tools
Legacy systems often fall short in handling modern data requirements, such as material traceability and auditability
Integration challenges
New solutions often struggle to integrate seamlessly with existing platforms, creating additional barriers to adoption
Manual processes
Reliance on manual data collection and analysis leads to inefficiencies and increased error rates
Impact
Technology gaps not only slow down progress but also hinder an organization’s ability to leverage data for strategic decision-making
Strategies for success
Overcoming data access barriers
Gaining access to comprehensive material composition data is one of the most significant challenges companies face when working towards sustainability goals, particularly when it comes to circularity and compliance. However, overcoming these barriers is crucial, and with the right steps, businesses can make substantial progress even if they don’t start with a perfect dataset
Audit Existing Data
Conduct a thorough data audit
Begin by identifying all the data that already exists within your organization. Look for information across departments such as procurement, production, logistics, and product lifecycle management. This will often include material composition, suppliers, energy usage, waste data, and emissions, as well as existing reporting or certifications
Utilize past experiences
Consider data from past projects that can be repurposed for your circularity assessment. The immediate consideration might be a Life Cycle Assessment. However, valuable data can also be extracted from your organization’s Scope 3 calculations. Avoid limiting your scope to only sustainability initiatives – you may discover that departments like procurement or sales have undertaken notable initiatives previously
Manual processes
Once you’ve identified existing data sources, assess them in relation to key performance indicators (KPIs) and regulatory requirements (e.g., CSRD, ESRS E5, ISO standards). This audit helps you to understand what data you have, what is useful for your reporting, and what you still need to collect
Highlight gaps
A critical part of this audit is determining where data is missing. For instance, do you have supplier data but lack granular material composition data? Is your emission data incomplete due to gaps in operational processes? These gaps will inform your strategy for data acquisition and improvement
Embrace Imperfection
Start with available data
Recognize that the quality of your data might not be perfect initially, but starting with whatever is available is essential. Imperfect data, if managed well, can still drive action. The goal is to avoid analysis paralysis where you delay progress waiting for the “perfect” dataset
Leverage what you have
Even partial material composition data or incomplete emission profiles can provide a foundation. Use them to estimate, benchmark, or build initial models that allow you to start reporting and refining over time
Make incremental improvemets
The idea is to take actionable steps with the data available today while planning for future improvements. Treat data gaps as opportunities to continuously enhance and evolve your datasets
Encourage incremental improvements
Map out the data gaps
Once you’ve identified what’s missing, break down these gaps into actionable parts. Who in your organization can provide the missing data? Do you need to engage with external suppliers for material compositions or certifications? Are there systems or tools that can automate data collection?
Set achievable, short-term targets
Develop short-term data collection and improvement goals. For example, aim to acquire 80% of the missing data in the next quarter or improve the granularity of material data within the next six months. These incremental steps help build momentum and ensure that progress continues at a manageable pace
Foster a culture of continuous improvement
The idea is to take actionable steps with the data available today while planning for future improvements. Treat data gaps as opportunities to continuously enhance and evolve your datasets
How Circular IQ can help?
Circular IQ Software and Services
Circular IQ is specifically designed to support businesses in collecting, processing, and reporting sustainability data, with a strong focus on ESRS E5 compliance and circular economy goals
Seamless Data Collection & Processing
Circular IQ automates the collection of data from various sources, centralizing material composition and lifecycle data. It normalizes this data for consistency, making it ready for analysis and reporting
Customizable Dashboards Reporting
The software features interactive dashboards and customizable reports, aligned with ESRS E5 and ISO 59020 standards. It simplifies the process of tracking and reporting on sustainability metrics, ensuring accurate and timely disclosures
Auditability & Transparency
Circular IQ ensures full auditability by providing an audit trail for all data changes, making it easy to validate sustainability claims and meet compliance requirements under ESRS E5
Accelerates Circular Economy Transition
Circular IQ helps businesses monitor circularity metrics and identify areas for improvement, supporting a smooth and efficient transition toward a more sustainable, circular business model
CTI Tool
CTI Tool, developed in collaboration with WBCSD, enables businesses to integrate key circular economy data points into their operations. It helps track circularity performance, reduces complexity, and is a stepping stone for faster compliance with ESRS E5 and other circular economy frameworks
Your Path to Sustainability Success
Achieve your sustainability goals with an actionable 90-day plan
- Secure management approval
- Audit existing data for gaps and opportunities
- Deploy Circular IQ for small-scale implementation
First 30 Days
- Collaborate with stakeholders to enhance data quality
- Train teams on Circular IQ for circularity metrics
- Build a robust data model with interim assumptions
First 60 Days
- Complete your first ESRS E5 compliance report
- Establish a baseline measurement for sustainability performance
- Optimize processes and set long-term improvement goals
First 90 Days
