The world’s leading multilateral development banks (MDBs) are stepping up their cooperation to promote the circular economy – including many projects targeting the fibres, textiles and clothing industries.

The banks announced their aim to tighten cooperation to increase the share of impactful circular economy projects at the World Circular Economy Forum WCEF2023, held from May 30-31 in Helsinki, Finland. The event drew over over 1,800 participants to Helsinki and was followed online by more than 5,000 people.

“Until now, financing for circular economy projects has remained marginal and we want to change that,” said Ambroise Fayolle, vice-president of the European Investment Bank (EIB). “Developing the capacity and tools for the proper assessment of circular economy investment will require collaboration between financial institutions. The financing of innovation is particularly important to support the emergence of circular economy solutions.”

In addition to the EIB, the African Development Bank (AfDB), the European Bank for Reconstruction and Development (EBRD), the Inter-American Development Bank (IDB) and the World Bank are involved.

It is often difficult for a single company to gain financing, because in the circular economy, value is created in value chains made up of several companies. Companies may also use new business models or technologies that investors consider risky.

Banks see the potential of the circular economy in achieving economic success in their target countries and in improving the ability of economies to respond to unexpected challenges and changing circumstances.

“The banking institutions have now acknowledged the challenge involved in reaching 2030 sustainability goals, and the economic risks which follow if these targets are not met,” said Svein Berg, CEO of Nordic Innovation, co-host with Sitra of the WCEF2023. “We hope that encouraging examples will also convince private investors that the circular economy can be profitable business,”

WCEF2023 also saw evidence that circular economy businesses can grow and flourish with private funding.

“Over the past 25 years, our company has demonstrated that circular models can be profitable, financially competitive and environmentally beneficial,” said Carmen Ene, CEO of 3StepIT, a Finnish provider of circular economy IT solutions. “However, for circularity to become the norm, we urgently need policymakers to provide a level playing field in regulation, tax and policy.”

www.wcef2023.com