Financial and Non-Financial Indicators of the Circular Economy in the Accounting System

Abstract

the research paper is devoted to the study of integrating the financial and non-financial indicators of the circular economy into the accounting and reporting system for sustainable development. In the current transition from a linear business model to a circular one, the need to develop new approaches to measuring business performance is becoming more urgent, considering economic, environmental, and social aspects of activity. Based on the analysis of scientific sources and practical data, it was found that traditional accounting, focused mainly on financial metrics, does not provide complete information for assessing the effectiveness of circular practices. It is shown that financial indicators, such as cost savings from waste reduction, additional income from the sale of secondary raw materials, or ROI of circular projects, make it possible to assess the economic effect of sustainable initiatives. At the same time, non-financial indicators reflect qualitative changes in resource efficiency and social responsibility. The methodological basis of the study was a combination of an analysis of scientific literature, a comparison of international reporting standards, and a generalization of statistical data on Ukraine and the EU. The article provides examples of using key macro and micro-level circularity indicators. It compares the level of waste recycling and CO₂ emissions in Ukraine and the European Union countries, revealing a significant gap in implementing circular practices. Particular attention is paid to the problem of inconsistency between companies' declarations in the field of sustainable development and the actual results of their activities, which leads to the risks of «greenwashing» and reduces the value of non-financial reporting for stakeholders. The need to create a single integrated accounting system that combines financial and non-financial indicators and modernizes information systems to automate data collection and analysis is substantiated. The proposed systematization of indicators can serve as a basis for forming corporate KPIs and adapting Ukrainian enterprises to the new requirements of European regulation in the field of sustainable development.