Circular Economy and the SDGs in the EU: a Quantitative Empirical Analysis

Objective: The transition to a Circular Economy (CE) is widely posited as a crucial driver for achieving the United Nations' Sustainable Development Goals (SDGs), but cross-national empirical evidence quantifying this relationship remains limited. This paper addresses this gap by investigating the link between CE strategies and SDG progress across the 27 member states of the European Union for the period 2010-2021. Theoretical Framework: Using a robust panel dataset sourced exclusively from Eurostat, this study constructs two novel composite indices: a Circular Economy Performance Index (CEPI) and an SDG Composite Score (SDGS). Method: Unlike previous studies that rely on normative weighting, this research employs Principal Component Analysis (PCA) to statistically determine the optimal contribution of each indicator. The primary analytical method includes correlation and panel regression analysis, validated by a Fixed Effects model to control for unobserved country-specific heterogeneity. Results and Discussion: The analysis reveals a robust and positive relationship (r = 0.605), indicating that improvements in circular performance are strongly associated with better sustainability outcomes, particularly in innovation-driven economies. Country-level analysis further identifies distinct performance clusters: 'CE Specialists' (e.g., Netherlands) and 'Innovation-Led SDG Champions' (e.g., Sweden, Germany). Research Implications: We conclude that integrating circular principles into national policy is a potent strategy for accelerating the 2030 Agenda.