Accounting for circularity

The circular economy envisages a closed-loop system of production and consumption where waste becomes a resource, reducing the environmental impacts associated with today's linear economy. Although a deceptively simple idea in theory, a shift from a linear to circular system will require significant reorganisation of society, reinforcing the need for cooperative business models: because no organisation can become circular on its own. From an accounting perspective, the network requirements of a circular economy raise questions about what should society account for within the circular economy? How can we account for cooperative ventures between organisations? and who accounts within these networked systems? In this chapter, we begin to address some of these questions. Academic interest in the circular economy has increased significantly in recent years, and we begin the chapter by exploring interdisciplinary scholarship in circular economy, identifying key concepts and tools for organisation level analysis. We then frame the circular economy as an interest for accountants, focusing on the particular accounting challenges posed by circular systems of resource use. We argue that existing tools and accounting practices fail to meet the level of cooperation required to account for the circular economy at a networked level. Drawing on a case study on an agricultural cooperative in France, we offer some insights into how these accounting challenges emerge and impact upon circular economy projects. We conclude the chapter by offering examples for potential future research which investigates collective accounting practices for multiple organisations.