Table 1: Main Discussion Items at the Study Group ⟨recovered⟩
| Category | Issues, comments, questions, etc. | Policies in response, discussions about issues, etc. |
|---|---|---|
| Clarification of the definition of CE business | The definition of CE business is unclear. | • From the perspective of taxonomy related to the CE, the EU is taking the lead; however, at present, it is still under development [6]. In Japan as well, the definition of CE commerce is making progress among CPs, but areas outside commerce are not defined [7]. At WBCSD, discussions are expected to proceed with the GCP [8]. • It is difficult for individual companies to define CE business, but we expect that the definition will be clarified as the CE matures. Even if CVP values are disclosed while it remains uncertain which operations qualify as CE business, we consider it possible to prevent greenwashing if companies clarify what they have calculated as CE business. • In the case of VNs, this may depend on whether or not the VN is a CE. |
| Difficulty of disclosing CVP data | The disclosure of data used in CVP calculation is difficult. | • It was pointed out that, at least initially, using CVP internally without disclosure is effective as a tool for promoting an efficient transition to a CE. • If they do choose to disclose CVP data, it may be an option to use third-party certification to have just the final CVP value certified. • Conversion to data that can be disclosed, such as year-on-year comparisons, may also be possible. |
| The disclosure of numerator and denominator data within VNs is difficult. | • Data management by financial and other institutions as third parties is also possible. • Disclosing numerator and denominator values within a VN can be expected to have an effect in maintaining equity among the stakeholders that comprise the VN. | |
| Difficulty of acquiring CVP data | The acquisition of data separating CE business and existing business is difficult. | • Methods of separating CE business from existing business with some sort of ratio (i.e., a CE ratio) will be necessary. • In this regard, it was pointed out that companies are undoubtedly calculating costs internally when they conduct CE business, so this should be left up to the companies. We believe that, even in this case, it might be advisable to prepare a simple certification system and guidelines. |
| Motivation to use CVP and associated demand | Can CVP become an indicator sought by financial institutions? Can this indicator be successfully linked to sustainable finance? | • We believe that, among diverse sustainable finance indicators, CVP offers potential for linkage to sustainable finance as a CE indicator that accounts for economic viability. • Financial institutions are seeking an easily understood CE indicator, and CVP could be a candidate. |
| Will new value be created by this indicator, such as formation of a new market? | • CVP could make it possible to select economically efficient businesses for advancing the transition to a CE. In other words, clarifying economically inefficient CE transition businesses could enable areas that government should strengthen to be identified. | |
| It would be good if Japan could contribute to indicator design based on its knowledge and experience regarding circularity. | • Japan’s experience in household appliance recycling and other areas could be used in setting a CE taxonomy, etc. | |
| There do not appear to be clear benefits justifying the work-hours required for calculation. | • It was pointed out that CVP can initially be used internally as an effective tool for advancing an efficient transition to a CE. • Thereafter, the range of use could be expanded if, compared with other indicators, it can be used as an effective tool for presentations to financial institutions, etc. | |
| Target boundaries | Can CVP be used for everything from products to national governments? Companies want to use it for product promotion, and the standards must address VNs. | • Regarding use on an individual-product basis, the calculations themselves are theoretically possible, but fundamentally CVP is intended to be used at the level of businesses to national governments. As everything need not be assessed using a single indicator, a different indicator may be better for product promotion. |
| Potential for CVP application | The indicator is difficult to use for infrastructure, buildings, and so forth, for which it takes a long time to recover investment. | • The EU taxonomy for buildings and infrastructure is progressing. However, we consider that there are presently issues in using annual CVP values for infrastructure and construction businesses with long investment and recovery periods. Our assumption is that CVP will first be used in electrical, electronic, and service fields. |
| Standardization | It would be best to first push the cause at WBCSD; and as value added varies by industry, standards should be discussed and addressed individually at the ISO. | • After standards for VNs are addressed, one option will be to prioritize influencing WBCSD. |
Equations (printed pp. 3–4, Unicode-normalised)
Eq. (1), single organization:
CVP = Y_CE / E_CE
where Y_CE = value added from Circular actions, E_CE = expenditure on Circular actions.
Eq. (2), expressed in standard financial-statement items:
CVP = (S_CE − I_CE) / (C_CE + G_CE)
where S_CE = sales from Circular actions, I_CE = intermediate goods costs, C_CE = cost of goods sold, G_CE = selling, general and administrative expenses. Value added by the subtraction method.
Eq. (3), value network:
CVP_VN = Σ(S_CE,i − I_CE,i) / ( Σ(C_CE,i + G_CE,i) − Σ C_D,i )
i indexes each participating organization; C_D = purchase costs of resources exchanged within the VN (materials, products, services, information and other items), excluded from the denominator to prevent double counting.
Appendix tables
Tables A1 (45 indicators × 6 assessment scopes × 11 assessment items) and A2 (indicator sources, with CTI and ISO check columns) survived in the Markdown twin in degraded but readable form; the load-bearing finding is stated in the body text and is not table-dependent: no indicator among the 45 has a “focus on cost and value added” except CVP (#38, source “H-AIST”), and none is contributed by CTI, ISO 59020 or ISO 59040 in that cell either. Indicator #38 is CVP. Derivation: ~1,400 indicators from 34 types of resource material → ~770 after merging synonyms → 45 after recategorising onto the Circular Partners indicator set (14 indicators added to the CPs’ set).