Foreword We recognize a growing consensus in both policy and business domains that circularity/resource efficiency is an indispensable tool for addressing climate change, biodiversity loss and pollution globally. This will need more sustainable use of resources and minimization of waste along value chains. It will increase resilience and efficiency of business operations, reducing the dependence on specific raw materials and the associated risks for value chains and national economic security. The Group of Seven (G7) leaders under Japan’s Presidency, bearing this in mind, endorsed “Circular Economy and Resource Efficiency Principles,” or CEREP , at the G7 Summit in 2023. CEREP created a basic voluntary framework for companies to expand their circular and resource- efficient businesses and expedite the transition to a more circular economy. The principles include identifying risks and opportunities from a circular economy transition; enhancing corporations’ disclosure of circularity-related information such as business models, governance, targets and the progress on these; as well as the monitoring of progress of circularity and resource efficiency at the value-chain level to enable aggregation. These are fundamental for scaling circular business across the globe in the mid to long term, involving the public sector and other stakeholders. Implementing such principles requires common guidance and standards, in particular comparable metrics and disclosure schemes, which are missing right now, to ensure quality performance assessment and a level playing field, among other conditions. The G7 environment ministers also supported these efforts under the Italian Presidency this year. Since companies operate their businesses across borders and make efforts to transition to a circular economy in an open economy, harmonized rules and standards, as opposed to those fragmented across regions, are essential to reduce the cost and further increase circularity. Indicators and disclosure schemes are relevant examples in this context. Countries need to work together with the private sector to achieve this goal. In this regard, it is encouraging that there are relevant initiatives to set a global standard, in particular the Global Circularity Protocol led by the United Nations Environment Programme, One Planet Network and the World Business Council for Sustainable Development, which could serve as global guidance and standards. I believe that this briefing paper helps readers understand business perspectives and where we are now in terms of circularity/resource efficiency metrics, with possible actions to further encourage the business sector to set targets and improve measurement of circularity with concrete action.Satoshi Yoshida Director for International Resource Circulation and Circular Economy, Ministry of the Environment, Japan Harmonizing Metrics to Measure Circularity: A Call to ActionNovember 2024 Harmonizing Metrics to Measure Circularity: A Call to Action 3

Harmonizing Metrics to Measure Circularity A Call to Action 2024