The path to the circular economy is new and radical. It requires looking differently, experimenting and daring to choose a circular future. The Kopgroep Circular Funding is a powerful public-private partnership between ABN AMRO, European Investment Bank, Municipality of Amsterdam, ING, Invest-NL, Ministry of Infrastructure and Water Management, Dutch Professional Association of Accountants, Dutch Association of Banks, Dutch Water Board Bank, Province of Utrecht, Rabobank, the Regional Development Agencies, Triodos Bank and De Nederlandse Bank with a common goal: to make the Netherlands a leader in the circular economy by making circular funding the norm in 2030.
The circular economy steers toward minimizing the use of new raw materials, materials and products, maximizing reuse and reducing waste by creating a closed loop of production and consumption. The circular economy is essential to stay within the ecological limits of our planet. This simultaneously reduces the Dutch economy's dependence 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 related to funding circular entrepreneurs, these bottlenecks are identified in the Roadmap Circular Funding 2030. First and foremost, circularity must be an integral part of the assessment of funding applications and investment decisions.
'Invest-NL has been active in funding circular propositions since its inception in 2020. The intensive cooperation with this diverse group of financiers and investors has provided knowledge, network and experience. And that makes us a unique transition network. And in this way we make funding a circular future possible.'
Anne Mieke van der Werf, Director of Business Development at Invest-NL and Chairman of the Circular Funding Kopgroep
A key pillar of the Kopgroep's approach is to inspire with concrete examples. Looking for evidence, technology and data, circularly financed companies and projects are analyzed and shared by the Kopgroep. The resulting examples are shared across the industry.
Looking at finance with circular glasses
One challenge is that linear risks, such as depletion of natural resources, cost increases in raw materials and environmental damage, and circular opportunities, including sustainable innovation, cost savings and customer value, are explicitly factored into funding decisions. After all, the continuity of business is at stake as long as dependence on new raw materials persists. It is also important that we assess the risks of circular economy more realistically. This means making our risk models more forward-looking and looking at certainties in future cash flows, long-term stability and solid contracts within the production chain.
Arjan van den Born, director ROM Utrecht Region, on behalf of ROM Netherlands: "Realizing and growing an innovative circular enterprise is incredibly difficult. Not only because the technology still needs to be developed, but also because the market is incredibly opaque. Customers are conservative, the products do not yet exist, prices fluctuate and the necessary regulations and laws are lacking. Therefore, circular entrepreneurs need support; financially, but also with knowledge and network. That's where the ROMs help; realizing a more beautiful world by supporting innovative entrepreneurs."
The Kopgroep Circular Funding has collectively developed an open-source, anonymously usable, Circular Risk Scorecard, which looks at risks and opportunities from a circular perspective. The purpose of the Circular Risk Scorecard is to gather data to substantiate that the risks of circular business are currently overstated, and the opportunities are not sufficiently considered in a funding or investment decision.
The Kopgroep calls on the financial sector to start using the scorecard and use it to provide insight into the circular risk score of the company or project to be financed and include this score in decisions for funding and investments.
If you want to get started (for free) with the scorecard or learn more, read on here.
The Kopgroep Circular Funding is part of the Sustainable Funding Platform of The Dutch Bank.
About the Head Group on Circular Finance
The Kopgroep Circular Funding was established in 2021 under the Sustainable Funding Platform of De Nederlandse Bank. The Kopgroep takes a project-oriented approach. The core values are: doing, connecting and anticipating. We work with driven and dedicated teams on action-oriented projects. We choose effective projects with impact that contribute to at least one objective on the Roadmap Circular Finance 2030. Members of the 'Kopgroep Circulair Financieren' are representatives from the financial institutions ABN AMRO, European Investment Bank, ING, Invest-NL, Nederlandse Beroepsorganisatie van Accountants (NBA), Nederlandse Vereniging van Banken, Nederlandse Waterschapsbank, Rabobank, the Regionale Ontwikkelings Maatschappijen, Triodos Bank. Strategic partners of this leading group are the Ministry of Infrastructure and Water Management, Province of Utrecht and Municipality of Amsterdam.