Bellagio Declaration
Circular Economy Monitoring Principles
Abstract
The “Bellagio Declaration” is a set of principles on how to ensure that a monitoring of the transition to acircular economy captures all relevant aspects and involve all relevant parties. It serves to guide national
and European authorities in the development of monitoring frameworks and indicators.
The “Heads of EPA Network” is invited to discuss and endorse these principles as a common approach todevelopment and strengthening of monitoring frameworks.
The work was started as a collaboration between ISPRA from Italy and EEA and guided by an advisory groupencompassing EPA representatives from Finland, Ireland, Netherlands, Portugal and Slovakia. Originally theintention was to establish a declaration via an intensive expert work session and a high-level meeting taking
place in Bellagio, Italy (hence the name). Due to Covid-19 the process was moved online and replaced by aseries of webinars and work of a smaller writing group (ISPRA, EEA and the advisory group), ending with atechnical meeting to finalize the declaration. Throughout the process European institutions (ENV, ESTAT,
JRC) has been consulted to ensure alignment with the work on the implementation of the European Green
Deal and in particular the Circular Economy Action Plan
The Bellagio Principles is a set of seven principles capturing the essential elements of a monitoring
framework for the transition to a Circular Economy:

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Bellagio Declaration
Circular Economy Monitoring Principles
4 December 2020

We, [see Annex 2] the representatives of institutions and authorities, endorse the following principles in
the context of measuring and communicating progress towards circularity in the economy.

Preamble
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Acknowledging that moving towards a circular economy allows to use natural resources more
efficiently and keep resource consumption within the planetary boundaries, while contributing to
GHG emissions reduction and limiting the depletion of natural capital and biodiversity loss.
Becoming more circular also increases the resilience of an economy by reducing its material
imports dependency.
Recognizing the economic potential linked to innovation and job creation as well as increased
competitiveness from a transition to a more Circular Economy;
Acknowledging that meeting some targets embedded in the UN framework of Sustainable
Development Goals (SDG), in particular for SDG 12, requires a circular approach.
Recognizing the central role of Circular Economy in the European Green Deal and observing that
the European Commission Circular Economy Action Plan is a key vehicle for its implementation in
the EU. The action plan includes the action on the update of the EU monitoring framework for the
Circular Economy;
Acknowledging that meeting environmental international targets as well as enhanced European
targets on biodiversity, health, and climate action is at the heart of the European Green Deal;
Acknowledging that the European Green Deal underlines that moving towards a Circular
Economy should be accompanied by a just transition, taking into account the distribution of
costs and benefits across the economy, including environmental and social costs, to ensure‘we leave no one behind’;Acknowledging that implementation of Circular Economy may differ across countries and adapt tolocal circumstances following the subsidiarity principle. Furthermore, recognizing the role ofcountries in monitoring progress towards Circular Economy and possibility to exchange bestpractices in data collection and indicator development;
Recognizing the need to involve both sub-state (i.e. regional, local) and non-state actors (e.g.
business) in the monitoring of Circular Economy;

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Acknowledging several ongoing related relevant monitoring initiatives at local, regional, national,
EU, international (e.g. OECD, UN PACE Partnership in Accelerating Circular Economy) and global
level and recognizing the need to ensure appropriate synergies.
Recognizing that context, scope, priorities, and starting points of circular economy strategies canvary significantly, monitoring principles need to respond to this diversity by being applicable fordifferent purposes. Further tailoring them to a specific purpose of the monitoring would add clarity.
Acknowledging that monitoring circular economy needs to be simple and effective in view of easily
communicating progress to policy makers, citizens and stakeholders.

Principles
A circular economy is an economy where the value of products, materials and resources is maintained in
the economy for as long as possible. All outputs from one process is input for another. Thus, a movetowards a circular economy entails reducing the intake of virgin materials and reducing the generation ofwaste.
“A circular economy is instrumental in delivering our ambitious goal of turning Europe into a climate-neutral
continent by 2050, in reducing pollution and in halting biodiversity loss, while reinforcing EU’s sustainable
competitiveness and industrial base. The circular economy must become beneficial not just for the frontrunners but to all citizens and economic players across value chains, throughout Europe and beyond. The EU
can play an important role in establishing the circular economy at the core of achieving the Sustainable
Development Goals globally.” (Circular Economy Action Plan, 2020)
The transition towards a Circular Economy is thus a process that touches upon all aspects of the economy –both ones internalized directly via prices in the economy, and those that are seen as externalities. As suchany monitoring of progress needs to encompass the entire economy, its processes, and its impacts on thesurroundings, be that people or nature, here and elsewhere.

4Seven principles for monitoring the transition to a Circular Economy
Monitor the Circular Economy Transition
Monitoring the transition towards a circular economy needs toholistically consider all relevant initiatives – public and private - acrossthe economy. It should capture the full extent of changes happening to
the material and waste flows, products over their life cycles, businessmodels, and consumer behaviour, including the economic,
environmental and social dimensions of these changes.

Define indicator groups
A robust monitoring system for the Circular Economy transition should
include:• Material and waste flow indicators to monitor changes
throughout the material life cycle including resource efficiency
dimensions.
• Environmental footprint indicators to capture the impacts acrossthe full life cycle of products and materials, so that spill-overeffects are assessed, and planetary boundaries are respected.
• Economic and social impact indicators to capture positive as well
as negative impacts that may occur during the structural changesof the circular economy transition.
• Policy, process, and behaviour indicators to capture theimplementation of specific Circular Economy policy measures andinitiatives, in particular for key sectors.
Follow indicator selection criteria (RACER)
Indicators included in a transparent monitoring framework for the
Circular Economy transition should follow RACER criteria: Relevant,Accepted, Credible, Easy to monitor, and Robust.
However, development of innovative, experimental indicators should
also be encouraged, even if not all RACER criteria may initially be
fulfilled.

Exploit a wide range of data and information sources
The data underpinning a monitoring framework for the Circular
Economy Transition may consist of:• Official statistics from the European Statistical System or National
Statistical Offices, other data produced by EU institutions, nationalor local authorities, as well as from international organisations) –Exploiting and integrating official information sources.
• Policy information – Tracking policy developments andimplementation including qualitative assessments.
• New data sources – Exploiting new information sources beyond
official statistics, such as data from the private sector and tradeassociations, research models, or from new applications of digitaltechnologies.
5Ensure multilevel monitoring
Monitoring should capture changes happening across all levels of theeconomy. It should address both public and private sector
stakeholders, and different governance levels from global to local
scale. A well-defined monitoring and governance structure is required
to promote the development of coherent metrics that capture themultiple dimensions of the circular economy transition.

Allow for measuring progress towards targets
Monitoring Circular Economy implementation should help assess
progress to relevant policy targets and objectives, thus helping inform
if the right policies are in place and well implemented, or if corrections
or new policies are needed.

Ensure visibility and clarity
A well-designed Circular Economy monitoring framework will inform
policy makers, stakeholders and citizens. Appropriate indicators as wellas user friendly methods of communication, such as dashboards,
should therefore be identified.
Where possible, open data principles should be followed, with data
being made fully and freely available.

6Annex 1 - Bellagio Principles background
A Circular Economy (CE) is by definition an economy where there is full recirculation of resources andnothing wasted and where the value of products, materials and resources is maintained in the economy for
as long as possible. All outputs from one process is input for another. A move towards CE entails reducing
the intake of finite virgin material, designing out waste and pollution, developing systems andinfrastructure that enable products and materials recirculation, and sourcing renewable materials in a waythat also regenerates natural systems the economy depends on. At a macro level the monitoring can bedone simply by looking at material input, waste output and reuse of secondary raw materials. Today this iscovered by indicators on material consumption, waste streams, and secondary materials re-entering in the

Figure 1 - Circular Economy model (EEA, 2019)7

economy, which are reasonably well documented with data flows and modelling outputs but on a highaggregation level only.
In figure 1 this corresponds to the movements across the dotted line. Material flow and waste indicatorsserve to describe the overall achievement in terms of “closing the loop on material flows”.
Principle 1 – Monitor the Circular Economy Transition
Monitoring the transition towards a circular economy needs to holistically consider all relevant initiatives– public and private - across the economy. It should capture the full extent of changes happening to thematerial and waste flows, products over their life cycles, business models, and consumer behaviour,
including the economic, environmental and social dimensions of these changes.

Such indicators are, however, often highly aggregated, fluctuating with other developments such as general
economic development, and are unlikely to accurately describe small incremental changes. They therefore
do not fully serve to guide shorter term policy developments. The aggregated nature furthermore means
they are biased towards large volume materials, but not necessarily the ones most important forenvironment or other parameters. There is therefore a need to complement them by looking at thecircularity strategies processes within the economy, both at the national level and at business level, toidentify changes in push and pull factors that may facilitate changes that are not yet visible at the macrolevel.
Equally relevant are the environmental impacts generated which should be reduced to close to zero if weare to deliver on the aspiration of the Green Deal. Impacts are generated throughout the lifecycle ofmaterials as they circulate in the economy, both within Europe and beyond. On material extraction, it isvital that while extraction of finite materials is eliminated, the sourcing of renewable materials is done in a
way which does not have a negative environmental impact. At the least this means sourcing below renewal
rate, but recognizing that most natural systems that support the economy are not in an ideal state (e.g.,
due to soil depletion in intensive agricultural systems), we need to strive to regenerate these natural
systems in terms of for example soil health and biodiversity. In order to properly monitor if circular
economy actions actually reduce these impacts, the related pressures and impacts need to be monitored.
Waste and by-products that are to enter into recycling or other similar processes, need to maintain aquality that allows the reuse to take place. Thus, aspects of embedded hazardous substances in secondary
material streams that could prevent such recycling needs to be monitored
In a globalized economy, measuring environmental impacts need to address all steps of the life cycle ofproducts and materials, therefore footprint-type indicators are most suitable to monitor progress on theobjectives of the circular economy. These will help assessing that environmental impacts are within theplanetary boundaries.
A further aspect is the just transition aim of the European Green Deal. Circular Economy is beneficial inmany aspects. However, becoming circular and resource efficient will have distributional consequences andmay pose challenges in the social and economic domains. In this regard it is important to study the8dynamics and acknowledge positive as well as negative socio-economic implications that may arise during
the structural changes of the CE transition, in order to highlight how additional policies and reforms may
reduce possible negative socio-economic impacts and increase inequalities, to ensure no one is left behind.
It is important to ensure the consistency with other indicators used in other environmental and crosscutting policies.

Figure 2 - Overview of 10 Circular Economy strategies (EEA, 2019)

Figure 2 showing an overview of 10 strategies include, for example, reuse, repair, refurbishment,
redistribution, remanufacturing and recycling. While the list is already long it is far from being complete. As
an example, other proposed processes for the R-list includes processes such as Remove, where for example
the use of carbon capture can be used to mitigate some of the environmental impacts of the present linear
model. Also Regenerate in terms of regenerative agriculture has been suggested as a further element.
Seeing the transition from linear to circular as a continuum means that a very large number of suchprocesses can play a role.
9In general, the ‘inner circles’ (see figure 1) have the highest potential to contribute to the aims of thecircular economy. The use of process indicators can illustrate how policy action is transferred into market
actions at a time where visible results in the material flows are unlikely to be present.
Other policies contributing to circular economy relates to aspects like education (e.g. from primary school
to University), training, voluntary work (repair café, etc) linking with other SDGs. A the same time becoming
more circular can decrease the pressure on critical raw materials in Less Developed Countries in particularsome countries in Africa where conflicts are often linked to access to resources (water, land, forest andmaterials) becoming more scarce, while demand is increasing.

Principle 2 - Define indicator groups
A robust monitoring system for the Circular Economy transition should include:••••

Material and waste flow indicators to monitor changes throughout the material life cycle including
resource efficiency dimensions.
Environmental footprint indicators to capture the impacts across the full life cycle of products andmaterials, so that spill-over effects are assessed, and planetary boundaries are respected.
Economic and social impact indicators to capture positive as well as negative impacts that may occur
during the structural changes of the circular economy transition.
Policy, process, and behaviour indicators to capture the implementation of specific Circular Economy
policy measures and initiatives, in particular for key sectors.

It is difficult to monitor circular economy by using only one indicator as monitoring must cover different
aspects: the material flows, the policies and processes and finally the environmental impacts. Therefore, it
is better to adopt a set of indicators, following the RACER criteria (Relevant, Accepted, Credible, Easy tomonitor, and Robust)

Principle 3 - Follow indicator selection criteria (RACER)
Indicators included in a transparent monitoring framework for the Circular Economy transition should
follow RACER criteria: Relevant, Accepted, Credible, Easy to monitor, and Robust.

development
innovative,
experimental
shouldalso needs
be encouraged,
even if not all
InHowever,order to capture
the fullofscopeof Circular
Economy,indicatorsa monitoring
systemto capture:
RACER criteria may initially be fulfilled.
• The scale and effects of material flows and policy actions across the entire economic cycle including
actions of the finance sector and other related services linked to product and services flows;• The effects along the full life cycle for material, products, and services;• The effects as they evolve over time;• The effect at both global, national, and sub-national level in a manner that allows for comparison;10•The environmental pressure and impacts, including impacts outside Europe’s borders, to respect theplanetary boundaries;

The impact across all pillars of sustainability, thus including health/social impacts, to ensure a justtransition. The aim of these principles is to make sure that all key processes are captured as well as to avoid
any rebound effects and outsourcing of impact creating processes.
Monitoring tools should furthermore be developed to measure environmental crime especially in the fieldof illegal waste exports to improve strengthen controls of shipments of waste, promoting the use of digitaltechnologies for tracking and tracing, such as digital passports, tagging and watermarks.
Concrete actions in monitoring depend on data availability, and principles needs to take as a point of
departure existing data, confidentiality issues and issues. There is also a call not to increase theadministrative burden, and lack of resources to initiative new data collections. At the same time, it isimportant to identify data gaps and prioritize new data collection now to build new indicators in the
future...
Transparency concerns dictates that monitoring should, as far as possible be based on open official
statistics. This entails exploiting and integrating all existing official information sources in the short term but
also further development of new data sources for monitoring missing aspects of the circular economy in
the medium and long term. Official statistics give a reasonable coverage of issues of primary and secondary
material and waste flows, but much less around the implementation of specific circular economy policies.
As an example it would be suitable to start reporting official statistics on reuse, as this is a key CE action to
prolong the life of products and materials.

Principle 4 - Exploit a wide range of data and information sources
The data underpinning a monitoring framework for the Circular Economy Transition may consist of:•••Official statistics from the European Statistical System or National Statistical Offices, other data
produced by EU institutions, national or local authorities, as well as from international organisations)– Exploiting and integrating official information sources.
Policy information – Tracking policy developments and implementation including qualitative
assessments.
New data sources – Exploiting new information sources beyond official statistics, such as data fromthe private sector and trade associations, research models, or from new applications of digitaltechnologies.

In view of collecting missing knowledge, it is important to also consider other tools, such as theEurobarometer surveys, policy implementation tracking, and exploit new data sources based on ‘big data’
where datasets based on elements such as e-trade, carsharing market shares, etc. are used to provide
proxies for some of the elements poorly covered by existing data.

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Following the principle 2 of using all indicator groups would allow to fully understand the transition
process.
Macro level monitoring is clearly the responsibility of governments and international institutions. On theother hand, micro level monitoring such as business or product level monitoring can only be carried withsolid business insight, and as such would generally fall to companies. Product level do however, run the riskof missing interactions across the economy and across geographical levels, i.e. international, national,
regional and municipal settings. There is therefore a need for a commonly agreed framework that substate, sector or product monitoring can make reference to. Such an interface should be formed bycommonly agreed definitions and shared access to transparently generated information. This adds up to ashared conceptual model for Circular Economy.
The collaborative interface should be approached as follows:••

Public administration - Ensure homogeneous monitoring of public administration actions to stimulatemarkets through, e.g., sustainable public procurement and to prevent waste generation.
Businesses and citizens - Long-term involvement of businesses and citizens and supporting them indeveloping and practicing sustainable forms of production and consumption.

Principle 5 - Ensure multilevel monitoring
Monitoring should capture changes happening across all levels of the economy. It should address bothpublic and private sector stakeholders, and different governance levels from global to local scale. A
well-defined monitoring and governance structure is required to promote the development of coherent
metrics that capture the multiple dimensions of the circular economy transition.

The identification of indicators should also consider possible existing targets and specific objectives, so thatthey can be used to monitor progress. Such indicators allow evaluating if the right policies are in place andwell implemented, or corrections or new policies are needed in view of reaching the targets. A goodknowledge of environmental problems supports setting ambitious and realistic targets. At the same time,targets can trigger the development and use of existing and new indicators.
Principle 6 - Allow for measuring progress towards targets
Monitoring Circular Economy implementation should help assess progress to relevant policy targets andobjectives, thus helping inform if the right policies are in place and well implemented, or if corrections or
new policies are needed.

The purpose of the monitoring is in the end to assess progress towards the Circular Economy transition andinfluence policy making. It is important to communicate the monitoring tools to policy makers,
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stakeholders and civil society, and using user-friendly communication tools on the related indicator sets,such as interactive website, infographics, etc.
The good communication and dissemination of circular economy monitoring can contribute to increase
widespread social awareness and engagement of all actors: citizens, civil society, business, media, public
administrators and policy makers.

Principle 7 - Ensure visibility and clarity
A well-designed Circular Economy monitoring framework will inform policy makers, stakeholders andcitizens. Appropriate indicators as well as user friendly methods of communication, such as dashboards,
should therefore be identified.
Where possible, open data principles should be followed, with data being made fully and freely
available.

13Annex 2 – Participants in Bellagio Process
The Bellagio Process was formally convened by:••

Istituto Superiore per la Protezione e la Ricerca Ambientale (ISPRA,
www.isprambiente.gov.it)
European Environment Agency (EEA, www.eea.europa.eu)

Under mandate from the network of heads of EPAs in Europe (www.epanet.eea.europa.eu)
Following a presentation to the epanet meeting on 4 December 2020 of the enclosed version of
the declaration it was formally endorsed by:
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Germany
FranceSlovakia
Switzerland
Netherlands
AustriaItaly14