Why we need to finance circularity
Building a Circular Economy is key to address issues ranging from greenhouse gase emissions to resource scarcity or plastic waste production. It also is at the core to align our economies with the UN Sustainable Development Goals (SDG). Re-directing financial resources plays a key role in this transformation.
The course for that has been set and there is no way back. However, the strategic implications of sustainability in general and circularity in particular challenge our financial as well as our economic systems. Financial flows need to be redirected in new, low-carbon business models. Not only businesses, but also financial institutions now need to adapt to this changing landscape. They are key to mainstream financing of circularity and sustainability.
While there are tremendous opportunities to scale up financing of circular solutions, downside risks from changes in business models or technological solutions need to be wisely managed as well. However, Financial institutions that help to scale up the transition to a circular economy can position themselves well, if they are an active part of such an economy fit for the future.
Chances for financial institutions
De-risk your portfolioA carbon neutral and Circular Economy will change the risk profil of the economy. Consequently, financial institutes need to adapt their risk profil to the new circumstances. Anticipating the changes brings competitive advantage.
Growing marketIf financial institutions re-orient investments towards technologies and businesses that enhance circularity, they can participate in an economy, that could generate about USD 4.5 trillion in annual economic output by 2030 [Accenture].
Securing talentsSustainability is a growth market that promises employees purpose for their work. Only companies, that are truly invested in the future will secure young talents. And only young talents provide the competences we need to compete in the future markets.
How we can help you
The Circular Economy aims to keep resources at the highest possible value during their lifetime and to reduce waste in our economies. Coming from a currently linear economy, which operates from a take-make-waste model and degrades resources and generates unacceptable levels of waste, this will need a very different value creation architecture. Supporting this transition from a linear to a circular economy creates business opportunities for the financial industry.
We are Circular Economy experts. We understand the circular transition and the challenges, risks & opportunities that come with it. Therefore, ecocircleconcept can support you to explore the strategies and actions that financial institutions can take to accelerate the circular transition and highlight ways in which you can manage related risks and barriers and scale up innovation and opportunites related to products, services and financial instruments or investments.
Integrate circular transition into your institutions strategy
To accelerate financing circularity successfully, it has to be implemented into your organisations core strategy. That means, you have ot manage linear and circular risks and opportunities by applying the circular strategies and concepts in your financial institutions risk policies, product development and client engagement. As every industry has different sets of risks and opportunities, it is beneficial to develop sectoral competences.
As Circular Economy experts, ecocircleconcept helps you to identify linear risks and supports you to start developing long-term execution pathways to contribute to the creation of a low-carbon, climate resilient and circular economy. We introduce you to cirular process, product and business model strategies, and support your analysis of related material risks and opportunities.
Furthermore, we provide our experience and research capacities to evaluate sectoral best practices for finance focusing on sectors such as construction, chemistry, electronics food and agriculture and others. We help you to develop an understanding of the Circular Economy market and its flow of materials, such as recycling infrasctructure and capacity, relevant legislation, and changing consumer demands and patterns.
Circular transformation requires additional competences
The circular transformation will take its´toll - your organisations needs to adapt to the requirements of the new circumstances. This means, some competences, knowledge and experiences might expire while others will become crucial.
ecocircleconcept helps you to pro-actively monitor the threats and opportunities to jobs internally for your financial institution as well as externally for the jobs destroyed and created in the businesses of your clients. We also support you to enhance the understanding of the circular transition of the internal C-suite level, which is critical to secure the necessary means and decision-making for the circular transition. The same holds true for decision makers of your clients: they need to be able to anticipate risks and opportunities of the circular transition. ecocircleconcept can support you with that.
Measuring internal circularity
Grow your circular footprint
To track your progress of circularity, you need to measure Circular Economy finance on your blance sheet. That way, you can strategically decide for appropriate and dynamic measures to grow the Circular Economy footpring on lending, investment and insurance activities. This can raise awareness about Circular Economy activities with clients, employees and investors.
ecocircleconcept supports you in disclosing your institutions level of financing for circularity on your balance sheet. As experts on circularity, we can also support your contribution to the standardisation of Circular Economy metrics and financial instruments. This can affect the development of financial instruments to mainstreaming circularity, such as green bonds and loans, positive impact finance or ESG integration.