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Product recycling rate

How should product recycling rate be measured and interpreted?

AccessibleStrategicTeam3 min read

Contents

Helps managers answer: To what extent are we minimising the environmental impact of the products we produce or sell?

With earlier environmental KPIs, the focus is often on reducing or recycling waste from operations. Product recycling rate extends that responsibility beyond the factory or office: it asks what happens to the products a business makes or sells when customers have finished using them.

When to use it

Use it to answer the key performance question: “To what extent are we minimising the environmental impact of the products we produce or sell?”

Include it in the corporate social responsibility perspective of a performance framework.

Define the collection method, calculation, reporting frequency and data sources before comparing periods or organisations.

Track progress against an explicit target, a credible industry benchmark or the organisation’s own trend.

Origins

This indicator grew out of waste-management practice and the development of extended producer responsibility: the principle that producers should help manage the environmental consequences of products after use. Governments, industry bodies and businesses subsequently translated that principle into collection, reuse and recycling measures. Product recycling rate is one practical KPI for monitoring the outcome.

What it is

Perspective: Corporate social responsibility perspective.

Key performance question: To what extent are we minimising the environmental impact of the products we produce or sell?

At the end of a product’s useful life, the preferred outcome is usually to recover its materials or preserve its value through reuse rather than send it to disposal. Manufacturers are increasingly expected to take responsibility for that outcome, while retailers and other sellers may also measure and disclose what happens to the products they place on the market.

Product recycling rate expresses the proportion of eligible products sold or reaching end of life that were recycled or reused during the measurement period. A useful definition must state the denominator, the geographic boundary, whether reuse counts, and whether the result is based on units, mass or material value.

How to use it

Measurement

Set the system boundary first. Identify the products and markets covered, estimate how many units or how much material became eligible for end-of-life treatment, and determine how much was verifiably reused or recycled. Keep reuse, closed-loop recycling, downcycling, energy recovery and disposal separate where those outcomes matter to decision-making.

Data collection method

Collection can be difficult because products leave the company’s direct control. Combine internal sales and production records with take-back data, recycler certificates, producer-responsibility scheme reports, customer returns, market studies and documented estimates. Record assumptions and uncertainty so the rate is reproducible.

Formula

Frequency

Product recycling rates are commonly calculated annually or every six months. The reporting interval should reflect the product’s life, the availability of external recovery data and the speed at which management can act on the result.

Source of the data

Sales and production volumes normally come from transaction, inventory or accounting systems. Recovery data may come from take-back programmes, waste contractors, recyclers, distributors, customers or industry-wide studies. When direct observation is unavailable, use a defensible estimation method and distinguish estimates from verified quantities.

Cost/effort in collecting the data

The effort can be high because end-of-life products may pass through several independent organisations and remain in use for many years. Cost rises when the business must commission research, reconcile incompatible units, verify downstream treatment or estimate the eligible population.

Target setting/benchmarks

The long-term ambition may be to reuse or recycle 100% of eligible products, but operational targets should reflect product design, collection infrastructure and the treatment routes actually available. Regulatory and government targets can provide context. For example, the Scottish government’s historical zero-waste programme set a target of 70% recycling by 2025; confirm that any such benchmark is still relevant before adopting it.

Example

The tyre industry illustrates the measurement challenge. Roughly one tyre per person is discarded each year, yet tyres are designed to withstand demanding conditions and can remain useful as material for products such as sports surfaces and footwear. Independent research commissioned by tyre companies and industry bodies reported that more than 87% of used tyres in Europe were being diverted from landfill at the time of the study.

Magazine publishing offers another historical example. A UK agreement with publishers set a 70% recycling standard by 2013. The voluntary arrangement involved the Periodical Publishers Association, which represented 90% of the country’s magazine publishers at the time. As with the tyre measure, the reported rate depended on independent research rather than a simple internal transaction count.

Top practical tip

Decide explicitly how packaging will be treated. For a short-lived product, product and packaging may enter the waste stream together and can be reported within one calculation. For a long-lived product, report separate product and packaging rates so the timing difference does not distort performance.

Top pitfall

Do not divide current-year recycling by current-year sales when products remain in use for a long time. Match recovered products to a defensible estimate of the population reaching end of life, and avoid treating collection, export or energy recovery as proven recycling unless the definition expressly allows it.