Financing the circular economy

AJ Gonzalez | June 18, 2021

Ellen MacArthur Foundation

The circular economy is a crucial part of the solution to climate change and other global challenges, while offering significant opportunities for new and better growth.

Our September 2020 report, Financing the circular economy – Capturing the opportunity, brings new analysis that highlights the rapid growth in circular economy financing and investment across asset classes and sectors.

It calls on financial services firms to build on the momentum by seizing the opportunities and scaling the circular economy, in collaboration with governments and corporates.

The circular economy financing market is taking off

The past two years have seen a steep increase in the creation of debt and equity instruments related to the circular economy.

Bonds With Ce Focus
Number Of Pmf With Ce Focus

The total amount of assets managed through public equity funds increased 22-fold since the end of 2019, from USD 0.3 billion to over USD 6 billion.

Aum With Ce Focus

The circular economy is vital to help address climate change and other global challenges

Next to being a source of new forms of better growth, the circular economy is a crucial part of the solution to tackle climate change and other Environmental, Social and Governance (ESG) issues.

The question is no longer whether climate change and other global challenges matter to the financial services sector, but how it will address them.

If the circular economy were adopted in just five key sectors (steel, aluminium, cement, plastic, and food), annual greenhouse gas emissions could fall by 9.3 billion tonnes of CO2e in 2050, equivalent to eliminating all transport emissions globally.

Finance Assets

The transition is happening

Hundreds of companies are already moving to the circular economy to reduce costs, generate new sources of revenue, and manage risks.

Number Of Businesses With 2025 Targets
Finance Resale Bigger Than Fast Fashion

Governments are also recognising the potential of the circular economy to increase competitiveness, develop more resilient supply chains, and deliver on societal and environmental objectives.

Growth opportunities exist across industries

Circular economy opportunities can be found in nearly every sector in the global economy. The plastics, fashion, and food sectors stand out as some of the most likely to be significantly impacted or even disrupted by the circular economy in the near term, driven by innovation, regulation, and evolving customer preferences.

Finance Emf 936Px Heatmap2

Financial Times Moral Money Summit 2020

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