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

<span data-metadata=""><span data-buffer="">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

<span data-metadata="">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

<span data-metadata="">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

<span data-metadata="">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

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​

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

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