RECOMMENDATIONS

General


Executive summary


Motivation

Raw materials are the backbone of all industrial supply chains. They play a prominent role in global socio-economic development and their production and use shape the pathways towards the low-carbon and circular economy. Global material production and consumption have increased substantially in recent years. Complex supply chains have been developed to satisfy our material needs and to underpin economic growth.

In order to tackle the problems associated with past unsustainable practices and to improve our capacity for forecasting and scenario development, it has now become imperative to monitor the physical economy. Existing monitoring practices focus primarily on the monetary dimension and do not address the physical dimension of supply chains. Current monitoring is characterised by datasets describing isolated flows (e.g. mine production) rather than whole systems (e.g. material cycles). There are considerable uncertainties in existing data. In addition, there are substantial data gaps that are not always explicit. There is serious fragmentation and discrepancies in data reported by different countries, different economic activities and different supply chain dimensions (e.g. production and trade). Existing data commonly lack a system context, which often leads to false assumptions, misinterpretations and wrong decisions. Furthermore, there are few incentives to share data, while confidentiality rules reduce transparency and result in fragmentation. Thus, the existing monitoring practice is inefficient and not suited to inform robust policies and strategies for addressing some of the most relevant societal challenges.

Due to these shortcomings, existing monitoring practices fail to provide the evidence base needed for assessing impacts on climate change, for monitoring progress towards implementing the circular economy, achieving the sustainable development goals and securing long-term supply of raw materials. Monitoring the physical economy can enhance our perception of society’s metabolism, improve our understanding of the interactions between economic activities and the environment and facilitate the identification of those intervention points in the supply chains that can lead to better outcomes.

This roadmap provides a series of ‘strategic’ recommendations for moving towards the monitoring of the physical economy. The overarching goal is to move away from monitoring individual, isolated flows to monitoring systems at company, national, regional (e.g. EU) and global levels. For this to happen the development of systems and data that accurately reflect the supply chains for a wide range of commodities is required. The lack of systems and data is a serious barrier at present and it will require substantial coordinated efforts and collaboration across different communities, including academics, government and industry, to enable their further development. The recommendations in this document are designed specifically to assist in overcoming this barrier.