Global financial companies with $ 18 trillion in assets support the circular economy
The authors of a major report on circular economy financing are calling on finance companies to increase collaboration with businesses and governments to change the sector.
There are major opportunities for the financial sector to achieve environmental, social and governance goals, while ensuring profitable growth, he says.
The volume of investor portfolios geared towards circular economy initiatives has increased 22-fold over the past two years.
Assets managed through these funds grew to nearly $ 7 billion, and on average the funds scored five percentage points better than their category benchmarks in the first half of 2020.
The report, from the Ellen MacArthur Foundation, urges companies to recognize the potential to drive significant environmental change through circular economy initiatives.
In a foreword to the report, HRH the Prince of Wales said: “The circular economy is helping to tackle the root causes of many problems, including climate change, biodiversity loss and plastic pollution, by fundamentally rethinking business models and rethinking entire value chains of products and materials used, through significant system changes.
“Now it’s time to scale up the circular economy. Finance will play a crucial role in this regard – and, if done right, will translate into new forms of value creation and real ecological, societal and economic benefits from accelerating this transition.
Research from the Ellen MacArthur Foundation shows that if the circular economy were adopted in just five key sectors (steel, aluminum, cement, plastic and food), annual greenhouse gas emissions could fall by 9.3 billion euros. tonnes of CO2e in 2050, which is equivalent to eliminating all transport. global emissions.
More than 30 CEOs and senior executives of major asset managers and banks representing $ 18 trillion in assets under management supported the report.
Andrew Morlet, President and CEO of the Ellen MacArthur Foundation (on the picture) said: “We have seen tremendous growth in funding for the circular economy over the past three years, with key players leveraging its potential to create value while meeting their climate change goals. Investors, banks and other financial services companies can play a critical role in rapidly scaling up the circular economy by helping businesses make this change and, in doing so, seize new and better business opportunities. growth. “
The Ellen MacArthur Foundation is a UK-based charity that develops and promotes the idea of a circular economy to address some of the world’s biggest challenges, such as plastic pollution, climate change and biodiversity loss.
You can download the report here – Financing the circular economy.