Leveraging the Nexus between Circularity and Sustainability Impact – United Nations Environment – Finance Initiative

The circular economy replaces the linear “take-make-waste” economic model and can enable and accelerate the transition to a more sustainable, resilient and inclusive economic system, bridging different sustainability goals and providing practical and viable business solutions. However, transitioning to it requires mainstreaming circular business models and significant financing, making private investment crucial for its success.

The “Circular Economy as an Enabler for Responsible Banking” series of resources helps banks around the world operationalise the interlinkages between the circular economy and climate, nature, pollution and healthy and inclusive economies. It provides actions for signatories to the Principles for Responsible Banking to move from setting sustainability targets to implementation, emphasising the integration of circular economy principles in their lending and investment decisions for high impact sectors. The series encourages banks to embed circularity into internal policies and processes, engage with clients in their transition to circular business models, redirect financial flows towards circular solutions and opportunities, and advocate for mainstreaming circularity.

The report “Leveraging the Nexus between Circularity and Sustainability Impact” is aimed at setting the scene and providing a general overview on operationalising the interlinkages between circular economy and climate, nature, pollution, and healthy and inclusive economies. We are releasing it in conjunction with a paper providing guidance for banks covering the link between circular economy and climate mitigation in more depth with reports on interlinkages with other impact areas will follow. 

The series also includes sectoral supplements for high-impact sectors with high circularity potential. Each sectoral supplement offers guidance for banks to develop sector-specific financing strategies that promote circular economy principles. More sector supplements will follow in the future.

These new resources set out practical guidance for signatories to the Principles for Responsible Banking to move from target-setting for sustainability objectives to delivering on their commitments. The Principles for Responsible Banking are a unique framework for ensuring that signatory banks’ strategy and practice align with the vision society has set out for its future in the Sustainable Development Goals and the Paris Climate Agreement.