Can (A)I help you measure your circularity? An AI-driven and collaborative framework for strategic KPI definition

The measurement of circularity is becoming increasingly important in steering companies toward more sustainable production models. Grounded in socio-technical systems (STS) theory, this exploratory multiple-case study investigates how to enhance the processes of defining KPIs for assessing corporate circularity, with particular attention to artificial intelligence (AI) and managerial collaboration. Based on ten case studies of circularity-related KPIs development, the research employs fuzzy set qualitative comparative analysis (fsQCA) to examine how different approaches to constructing KPI sets affect their perceived effectiveness, as evaluated by experts. The findings indicate that AI, internal and external collaboration may support the development of KPI sets. Drawing on these findings and insights from an expert workshop, the paper proposes a framework for measuring corporate circularity through AI. The paper offers contributions to both managerial practice and theoretical understanding by analyzing the interplay between managers and AI in defining measurement instruments and KPIs, connecting these insights to STS theory.