7 February 2024
Circular Finance Leading Group launches open source scorecard
The road to a circular economy is new and radical. It requires a different perspective, experimentation and the courage to choose a circular future. The Circular Finance Leading Group is a powerful public-private partnership between ABN AMRO, the European Investment Bank, the Municipality of Amsterdam, ING, Invest-NL, the Ministry of Infrastructure and Water Management, the Royal Netherlands Institute of Chartered Accountants, the Dutch Banking Association, the Dutch Water Authority Bank, the Province of Utrecht, Rabobank, the Regional Development Companies, Triodos Bank and De Nederlandse Bank with a common goal: to make the Netherlands a leader in the circular economy by making circular financing the norm in 2030.
The circular economy aims to minimise the use of new raw materials, materials and products, maximise reuse and reduce waste by creating a closed loop of production and consumption. The circular economy is essential for staying within our planet's ecological limits. At the same time, it makes the Dutch economy less dependent on raw materials from the rest of the world. Financiers, investors, and other service providers in the financial sector play a key role in driving the circular transition. The Kopgroep is working on solutions to the bottlenecks relating to the financing of circular entrepreneurs, which are identified in the Roadmap for Circular Financing 2030. The primary objective is that circularity must be an integral part of the assessment of financing applications and investment decisions.
‘Invest-NL has been actively financing circular propositions since its inception in 2020. Intensive collaboration with this diverse group of financiers and investors has yielded knowledge, networks and experience. This makes us a unique transition network. And in this way, we are enabling the financing of a circular future.’
Anne Mieke van der Werf, Director of Business Development at Invest-NL and Chair of the Circular Finance Leading Group
An important pillar of the Kopgroep's approach is to inspire with concrete examples. In search of evidence, technology and data, circularly financed companies and projects are analysed and shared by the Kopgroep. The examples that emerge from this are shared within the sector.
Looking at financing through circular glasses
One challenge is that linear risks, such as depletion of natural resources, rising raw material costs and environmental damage, and circular opportunities, including sustainable innovation, cost savings and customer value, are explicitly included in financing decisions. After all, the continuity of business is at stake as long as dependence on new raw materials continues. It is also important that we assess the risks of the circular economy more realistically. This means that we need to align our risk models more closely with the future and look at certainties in future cash flows, long-term stability and solid contracts within the production chain.
Arjan van den Born, director of ROM Utrecht Region, on behalf of ROM Netherlands: "Establishing and growing an innovative circular business is incredibly difficult. Not only because the technology still needs to be developed, but also because the market is extremely opaque. Customers are conservative, the products do not yet exist, prices fluctuate and the necessary rules and laws are lacking. That is why circular entrepreneurs need support; financial support, but also knowledge and networking. That is where the ROMs come in; creating a better world by supporting innovative entrepreneurs.”
The Circular Financing Leading Group has jointly developed an open-source, anonymous Circular Risk Scorecard, which examines risks and opportunities from a circular perspective. The aim of the Circular Risk Scorecard is to collect data to substantiate that the risks of circular entrepreneurship are currently overestimated and that the opportunities are not sufficiently taken into account in financing or investment decisions.
If you would like to get started with the scorecard (free of charge) or receive more information, please read more here.
The Circular Financing Leading Group is part of the Dutch Central Bank's Sustainable Financing Platform.
About the Circular Finance Leading Group
The Circular Finance Leading Group was established in 2021 under the Dutch Central Bank's Platform for Sustainable Finance. The Leading Group takes a project-based approach. Its core values are: action, connection and anticipation. We work with motivated and dedicated teams on action-oriented projects. We choose effective projects with impact that contribute to at least one objective on the Circular Finance Roadmap 2030. Members of the Circular Finance Leading Group are representatives from the financial institutions ABN AMRO, European Investment Bank, ING, Invest-NL, Dutch Professional Organisation of Accountants (NBA), Dutch Banking Association, Dutch Water Authority Bank, Rabobank, the Regional Development Companies, and Triodos Bank. Strategic partners of this leading group are the Ministry of Infrastructure and Water Management, the Province of Utrecht and the Municipality of Amsterdam.
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