WRAP chair, Julie Hill, says we need to encourage the banking and investment sectors to buy into the virtues of the circular economy, to lend leverage, and expertise…
Having been WRAP chair for over a year now, two questions I’m often asked are what are the circular economy priorities for the year and what are the challenges to making it wide-scale?
The first one is simple to answer – promoting circular economy business models for all areas of our lives, ultimately transforming the way we do business and the way we treat our stuff.
But – there are many challenges to making the circular economy wide-scale, and usually they are connected to buy-in.
As I told CIWM readers in an interview last summer, we still need people to tune in to the resource mission and embrace the many benefits.
Part of the challenge is that despite the best efforts of sustainability leaders within organisations who are banging the drum for change, they often meet a wall of resistance from those who hold the purse strings.
“Last year, ING was one of the first banks to report on circular economy opportunities, examining where financial models may need to adapt in order to fulfil a business’ circular economy potential”
Making a business model change, large or small requires a leap of faith and for many that isn’t enough of an incentive to mitigate against potential risks.
The Argos gadget trade in initiative that WRAP helped bring to fruition last year could only happen because we were able to get the finance and the commercial people in the organisation on board.
Where Argos were innovative and saw an opportunity, others have not always been so willing to take the next steps.
So how to reach those in charge of financing the future? We need to encourage the banking and investment sectors to buy into the virtues of the circular economy, to lend leverage, and expertise.
There are encouraging signs of such a move. Last year, ING was one of the first banks to report on circular economy opportunities, examining where financial models may need to adapt in order to fulfil a business’ circular economy potential.
The European Investment Bank held a conference on Circular Economy Finance last December, as well as contributing to a €24bn EU fund to help businesses make the shift. This year, Adair Turner, the former chair of both the Committee on Climate Change and the Financial Standards Authority, has been speaking about the need for ‘sustainable finance’.
One of the best things that could happen for the resource agenda is the merging of the debates about reducing debt, both financial and ecological, into a new and better proposition for the finance sector.
At WRAP, the interest in new financial models is welcome given our work to show the employment opportunities coming from circular approaches. Some of the new jobs we’ve identified will be readily financeable from existing sources. But others will need these newer, more bespoke approaches, and we look forward to their emergence.