Abstract
Innovative Circular Business Models (CBMs) can extend product and material lifecycles through reduction, reuse, recycling, and recovery. Achieving this, however, requires guidance from the performance management field. Most existing Performance Management Systems (PMS) focus primarily on material metrics, like recycling rates or waste volumes, often overlooking the role of managerial practices in CBMs. Addressing this gap, our research introduces the Circular Business Scorecard (CBS), a PMS based on Balanced Scorecard theory that integrates managerial practices for CBMs. The CBS includes four perspectives, encompassing financial and non-financial dimensions, to support the circular economy (CE) transition. Tested in a manufacturing case study, the CBS enabled the creation of a strategic map, highlighting two main pathways for companies moving toward CE: one pathway emphasizes cost reduction through eco-efficiency, while the other focuses on increased turnover driven by product design for circularity. Our contribution offers a structured, process-oriented approach, providing scholars and practitioners with a practical, step-by-step guide to implementing a PMS that supports CE transition.