Benchmarking the Circular Economy Index: methodological challenges and practical implications

Abstract

Circular Economy represents a topic of great concern, both for policy makers and academia, but above all for citizens. The challenge that academia and policy makers face when communicating the topic of circular economy to wider audience is scaling down several individual indicators into one synthesized value. This is often performed using the composite index approach. Still, for a considerable amount of time, researchers have been grappling with methodological challenges related to the development and evaluation of composite indexes of circular economy. These challenges include choosing appropriate indicators, determining an effective weighting scheme, accounting for substitutability among indicators, and more. Despite these challenges, the advantages of using a composite index have consistently outweighed the potential drawbacks, prompting researchers to strive for a methodologically sound index that can be applied and communicated effectively to a wider audience. In our paper, we will provide an overview of the methodological challenges and practical implications related to the benchmarking the Circular Economy Index, with particular emphasis on the raising robustness of the indexes and minimizing the impact of methodological inconsistencies on the interpretability and generalizability of composite index results.