Measuring Corporate Alignment With the Circular Economy: a Text‐Based Circularity Index From Mandatory Non‐Financial Disclosures

ABSTRACT The transition to a circular economy (CE) has become a strategic priority for firms, yet empirical assessments of corporate circularity remain fragmented and heavily dependent on structured indicators or self‐reported metrics. This paper proposes a novel, text‐based circularity index derived from mandatory non‐financial statements of large Italian companies. Using a corpus of FTSE MIB sustainability reports (2017–2022), we compute cosine similarity scores between firms' disclosures and