The circular economy—built on principles of eliminating waste, keeping materials in use, and regenerating nature—offers powerful pathways to reducing greenhouse gas (GHG) emissions. But despite its promise, current GHG emissions accounting frameworks often fail to capture the full climate benefits of circular strategies, thus missing out on the full benefits.
The circular economy—built on principles of eliminating waste, keeping materials in use, and regenerating nature—offers powerful pathways to reducing greenhouse gas (GHG) emissions. But despite its promise, current GHG emissions accounting frameworks often fail to capture the full climate benefits of circular strategies, thus missing out on the full benefits.
As highlighted by Alasdair Hedger from the Ellen MacArthur Foundation at the Canadian Circular Economy Summit 2025 in April, widely used accounting standards such as the GHG Protocol inadvertently create barriers for circular economy adoption. For instance, durable products are penalized under current rules because their full lifetime emissions are counted upfront, making them appear worse than their short-lived counterparts. Similarly, incineration is often recorded as having zero GHG emissions at end-of-life, giving linear waste practices an unfair advantage. Even innovative rental and repair models can backfire under accounting rules that shift GHG emissions categories, potentially discouraging resource-efficient business practices.
These systemic flaws were explored in the Ellen MacArthur Foundation’s recent report, Improving Emissions Accounting to Accelerate the Circular Economy Transition, which outlines five key areas where the GHG Protocol must evolve to support a climate-smart circular economy. Without these changes, companies struggle to demonstrate the business case for circular solutions—slowing progress toward both circularity and net-zero goals.
Relatedly, the CSA Group’s research report Climate-Smart Circularity: Guiding Decision-Making Through Data-Informed Standard Protocols, written in collaboration with Ivey Business School, presents a framework to ensure circularity efforts are both environmentally sound and climate-aligned. It emphasizes the role of evidence-based standards in helping policymakers and businesses identify the most effective strategies for reducing GHG emissions and making the most of the efficiencies that circular models offer. Read our recent guest blog for key insights and implications from this research.
While not all circular pathways are inherently climate-friendly, with the right data, standards, and policy support, we can optimize efforts to reduce our climate impacts using circular methods and practices. As we work to achieve Canada’s environmental targets and global climate commitments, aligning GHG emissions reporting with circular economy principles is not just important—it’s essential.
We are encouraged and inspired by the research being done in this area by our CELC Partners, and the contributions they make to shaping our systems and standards in order to unlock the full climate potential of the circular economy.
