Circular Economy Briefing

The latest developments for investing and the circular economy

The various taxonomies for sustainable finance that have been developing worldwide have begun to turn their attention to defining the circular economy. The EU has appointed more than 50 experts including big companies like E.ON, Airbus and Iberdrola and investors such as PGGM and BNP Paribas, to advise it on the next four environmental objectives of its taxonomy, including the circular economy. Meanwhile, scholars in Japan recently laid out their vision for the circular economy as part of plans for a national Transition Finance Taxonomy. The initiative, convened by Japan’s Research Institute for Environmental Finance, said that the consumer goods sector should convert plastic packaging to sustainable alternatives as a first step towards transitioning towards a sustainable business model, but should ultimately adopt a circular economy model if companies want to receive ‘transition’-labelled investment.

BlackRock’s Circular Economy Fund, which launched last October, raised more than $900m in its first year. Created in partnership with the Ellen MacArthur Foundation, the fund invests in companies making headway to address climate change, biodiversity loss and plastic pollution.

The Global Reporting Initiative has launched a Business Leadership Forum for reporting on the circular economy and waste. The programme brings together business executives for interactive sessions on the topic, focused on reporting. For more details, see here.

Impact Lens and Liontrust Asset Management provided support for a recent film, E-LIFE, which looks at why electronic waste is a serious risk for investors, highlighting the need for the industry to throw its weight behind creating a circular economy.

The Candriam Academy has launched a module on the circular economy via its free-to-access accredited training platform. The course aims to raise awareness around the economic opportunities of a transition towards circularity.

The European Circular Bioeconomy Fund has received seed funding of €82m from the European Investment Bank (EIB), and three private investors: PreZero International, Corbion and Hettich Beteiligungen. Its first investments have been in two growth-stage companies: PeelPioneers, which uses technology to turn orange peel into products such as oils, dietary fibres and animal feed; and Prolupin, which produces plant-based proteins. The fund has an ultimate target size of €250m, of which €100m will eventually be committed by the EIB. 

A new circular economy standard called the Chain of Custody has been developed by DNV GL, at the behest of non-profit the Ocean Cleanup. The standards outline minimum requirements for organisations wanting to verify every phase of the recycling process for plastic, from extraction, transportation, recycling/disposal/recovery, manufacturing and sales.