Government and Banks Collaborate to Accelerate Circular Economy

A circular economy produces as little waste as possible and avoids unnecessary resource wastage. Such an economy is essential to achieve climate goals, reduce pressure on our living environment, and increase the security of supply of scarce raw materials. Only by collaborating with various parties can the Dutch ambition for a circular economy be realized. This includes businesses, municipalities, provinces, the national government, and the financial sector. With the signing, government and banks outline what is needed to strengthen the position of circular entrepreneurs. Government and banks will discuss the progress of this agreement and the transition annually.

Banks and the government already collaborate in the Circular Finance Taskforce, working on concrete solutions to problems faced by circular entrepreneurs. For example, the way financial risk is calculated by banks, where linear business cases are still often the starting point. The scarce availability of raw materials or residual values of products is still only limitedly taken into account here.

With the statement signed by the Dutch Banking Association (NVB), banks ABN AMRO, ASN Bank, ING, NWB Bank, Rabobank, Triodos Bank, and the government, they indicate what they need from each other to accelerate the transition to a circular economy. Banks ask the government, for example, to ensure a level playing field for entrepreneurs in the circular economy compared to the linear economy. The government asks banks to make circularity an integral part of financing application assessments by 2030. Knowledge development of employees about circular financing and a mutual exemplary role in procurement are also part of the agreements. The involved organizations acknowledge that financing circular companies is necessary and requires extra attention.

State Secretary Vivianne Heijnen: “For a healthy future of our planet for our children and grandchildren, we cannot continue producing, using, and throwing away products and buying new ones as we do now. The Netherlands aims to be fully circular by 2050. This means an economy where raw materials are continuously reused and there is virtually no waste. We are working hard on this but still need to make great strides. I see many beautiful circular initiatives, but also challenges to scale up. Circular initiatives need support to think and act big. That is why I am happy with these agreements with the banks, which will help us shift from a linear to a circular economy.”

NVB Chair Medy van der Laan: “A circular economy is crucial for achieving the goals of the Climate Agreement and the Biodiversity Convention. For this, government and banks already participate in, for example, the Circular Finance Taskforce. Government and banks strengthen that cooperation with these agreements. If we each take our roles and responsibilities, we will succeed together. Especially a level playing field for circular products compared to linear products is important, along with stimulating demand. Circular producers ultimately benefit from consumers who demand their products. This contributes to a sustainable business case, increasing the chances of financing.”