The path to a circular economy is both new and profound, demanding a different perspective, experimentation, and the courage to choose a circular future. The Dutch circular finance initiative, known as the Kopgroep Circulair Financieren, is a public-private partnership that unites Dutch frontrunners in circular finance towards a common goal: Establishing circular financing as the norm by 2030.
The circular economy aims to minimize the use of new raw materials and products, maximize reuse, and reduce waste by creating a closed loop of production and consumption. It is essential for staying within the ecological boundaries of our planet, while simultaneously reducing the Netherlands’ reliance on resources from other parts of the world. Financiers, investors, and other financial sector service providers play a key role in driving the circular transition. The Kopgroep Circulair Financieren addresses the challenges in financing circular entrepreneurs in the Circular Finance Roadmap 2030 (NL), to ensure that circularity becomes an integral part of financing assessments and investment decisions.
“Since its inception in 2020, Invest-NL has been actively involved in financing circular propositions. The intensive collaboration with this diverse group of financiers and investors has yielded knowledge, new connections and valuable experience. This makes us a unique transition network, and this is how we make financing a circular future possible.”
– Anne Mieke van der Werf, Director Business Development at Invest-NL and Chair of the Kopgroep Circulair Financieren –
Looking through a circular lens at financing
At the moment, one of the main challenges is to incorporate linear risks and circular opportunities in financing decisions (e.g. resource depletion, rising raw material costs, environmental damage). The group emphasizes the importance of integrating circularity into the assessment of financing requests and investment decisions, to ensure business continuity.
Arjan van den Born (ROM Nederland): “Realizing and growing an innovative circular business is extremely challenging. Not only because the technology still needs to be developed, but also because the market is highly opaque. Customers are conservative, the products do not exist yet, prices fluctuate, and the necessary rules and laws are lacking. That’s why circular entrepreneurs need support; financially, but also in terms of knowledge and network. This is where the Regional Development Agencies (ROMs) come in; contributing to creating a better world by supporting innovative entrepreneurs.”
The Kopgroep Circulair Financieren has collaboratively developed an open-source Circular Risk Scorecard. This scorecard aims to collect data to demonstrate that the risks of circular businesses are currently overestimated, while the opportunities are not adequately considered in financing or investment decisions. The Kopgroep Circulair Financieren calls on the financial sector to use the scorecard, providing insight into the circular risk score of the business (or project) to be financed and incorporating this score into decision-making for financing and investments.