As ESG reporting becomes a non-negotiable requirement for companies operating in regulated jurisdictions, a new concept is taking centre stage: circularity. Circular economy principles such as resource reuse, waste minimisation, and full product lifecycle accountability are reshaping how sustainability is measured, reported, and assured. For accountants, this marks a shift not just in what is disclosed, but how that information is captured, validated, and integrated across financial systems.
As new directives such as the EU’s Corporate Sustainability Reporting Directive (CSRD) demand deeper granularity, businesses must embrace circular economy reporting frameworks. This article explores how finance teams can align with evolving expectations in ESG reporting, embed sustainability disclosures into financial narratives, and prepare clients for a more circular, compliant future.
From Linear Models to Circular Metrics
Traditional reporting models have typically focused on linear resource consumption—input, usage, waste. In contrast, circular economy reporting aims to measure value creation across the entire lifecycle of a product or service. That includes extraction, production, usage, repurposing, and reintegration into the economy.
PwC’s “Tooling for Transition” study highlights how this shift challenges financial reporting norms by introducing new KPIs such as reuse ratios, resource intensity, and end-of-life recovery rates. Accountants must rethink how these data points are audited, linked to financial materiality, and incorporated into ESG reporting frameworks like GRI and ESRS.
Sustainability Disclosure: A Strategic Imperative
As regulatory expectations evolve, sustainability disclosure is becoming a core aspect of corporate accountability, not a voluntary initiative. Businesses are under increasing pressure from regulators, investors, and consumers to provide evidence-backed reporting on their environmental and social impact. This shift requires accountants to go beyond financial figures and help define the metrics that capture circularity, emissions, and broader ESG outcomes.
Effective sustainability disclosure depends on the quality and clarity of underlying data. This means accountants must work closely with operational teams to align internal processes with disclosure frameworks such as the CSRD. Data integrity, audit-readiness, and consistency in valuation approaches are critical. Circularity-related metrics (such as material reuse rates or lifecycle emissions) must be tracked and reported alongside financial statements with the same level of scrutiny.
Moreover, integrating sustainability data into the broader narrative of enterprise value is increasingly important. Investors are looking not only for compliance but for credible ESG strategies that reflect long-term viability. Accounting professionals play a pivotal role in translating non-financial data into decision-useful insights, helping organisations align sustainability goals with financial performance.
Embedding Circular Economy Metrics into ESG Reporting
Circular economy reporting requires more than just good intentions—it demands clarity, structure, and consistent methodologies. As businesses begin integrating circular principles into their ESG frameworks, accountants must be equipped to interpret, measure, and validate these disclosures.
Here are four focus areas to support effective circular reporting:
- Lifecycle-Based Valuation
- Waste and Resource Efficiency
- Quantifying waste reduction and resource efficiency improvements helps translate sustainability actions into measurable business gains. This is critical for demonstrating ROI and meeting CSRD expectations.
- Product Reuse and Recycling Metrics
- Accurate tracking of secondary material use supports transparency and comparability. Accountants can help ensure these disclosures are aligned with both internal reporting standards and external audit requirements.
- Assurance and Audit-Readiness
- With ESG data coming under increasing scrutiny, accountants should establish robust internal controls and prepare circularity data for third-party assurance. This step will become essential as regulatory audits expand.
Preparing for the Future of ESG Reporting
As global ESG reporting standards mature, companies must prioritise circular economy reporting to remain competitive and compliant. This is not simply a matter of environmental stewardship—it is an operational and reputational imperative.
For accountants, the opportunity lies in translating circular performance into financial language. That includes building assurance-ready models, advising clients on disclosure requirements, and ensuring alignment between operational KPIs and financial outcomes.
Partnering with INAA for Strategic ESG Advisory
INAA member firms combine global ESG expertise with deep local understanding of compliance mandates, helping clients navigate evolving disclosure frameworks with confidence. Whether supporting CSRD preparation or developing circular economy KPIs across multinational supply chains, INAA professionals bring the financial precision and strategic foresight necessary for resilient ESG reporting.
If your firm is looking to lead in ESG reporting while building future-ready advisory services, reach out to an INAA member to explore how we can support your goals.