In order to transition to a circular economy, new and innovative business models are required. The financial sector plays a crucial role in accelerating this transition to a circular economy.
Perceived risks by financiers of these new and innovative circular business models can be overwhelming due to a lack of information and traditional ways of risk modelling, which fail to capture the advantages that circular business models present. Minimizing risk and maximizing return often within a short timeframe defines the success of the financial industry.
The absence of uniform circular metrics prohibit transparency and benchmarking
The current offering of funding instruments to not match the funding need of circular business.
The financial sector needs to work together to overcome these complications. The working group Financing Circular Economy, part of the Sustainable Finance Platform, was established in 2021 with the support of the Ministry of Infrastructure and Water Management and Invest-NL. The peer-to-peer working group is dedicated to implement the Roadmap towards 2030 to ensure circular financing will become the new normal.
Role Circular Finance Lab
The working group was established upon the initiative of Circular Finance Lab in cooperation with the Ministry of Infrastructure and Water Management. Circular Finance Lab is responsible for the overall coordination and project management and to ensure the working group is and becomes well embedded in the Dutch financial sector. Next, in line with the Roadmap, Circular Finance Lab is additionally actively involved in de projects related to the Roadmap: Fit for Finance, Risk and Financial Instruments.