# Enabling strategic growth across the circular economy Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-10-26 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Circular Economy: Driving Regenerative Economic Growth Meta Description: Discover the reasons why the circular economy is becoming a powerful tool for sustainable growth and how investors are capitalising on this trend. Learn from URL: https://financedigest.com/enabling-strategic-growth-across-the-circular-economyhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/businessman-holding-dollar-symbol-sbi-301985821-2-1736837520956-compressed.jpg) ![Jamie Butterworth, partner at Circularity Capital LLP](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/jamie-butterworth-1736837520885-compressed.jpg) **In this article, Jamie Butterworth, partner at Circularity Capital LLP; and Antonia Gawel of the World Economic Forum’s Pace initiative, explain why the circular economy is increasingly being seen as a powerful framework for regenerative economic growth and how investors are developing specialist strategies to drive value in this space.** All around the world, businesses, governments, investors and consumers are recognising the challenges caused by [linear](https://www.financedigest.com/innovation-at-periodic-intervals-to-upscale-the-linear-accelerator-market.html) ‘take-make-dispose’ models of production and consumption. In 2019, for example, more than 92 billion tonnes of materials were extracted and processed, producing roughly 50% of global carbon emissions. The subsequent waste produced across fields such as plastics, textiles, food and electronics is consequently yielding a high environmental toll worldwide. In a bid to reverse this trend, governments, investors and corporations are closely examining the circular [economy as an alternative framework for future growth](https://www.financedigest.com/visa-revenue-growth-slows-more-as-tough-economy-sobers-spending.html "Visa revenue growth slows more as tough economy sobers spending"), with a number of factors driving this increasing interest. The circular economy, which focusses on designing out waste and building regenerative flows of materials, [offers both the ability to decouple growth from primary resource](https://www.financedigest.com/copper-miner-teck-resources-rejects-glencores-22-5-billion-offer.html "Copper miner Teck Resources rejects Glencore’s .5 billion offer") extraction and the potential to deliver up to $4.5 trillion in economic benefits to 2030.\* Firstly, the transition away from today’s extractive, linear business [practices](https://www.financedigest.com/6-practical-tips-for-starting-an-online-business.html "6 Practical Tips for Starting an Online Business") is dependent on the development and uptake of circular business models. A growing number of businesses are now developing such business models which can enhance asset utilisation and [enable companies to grow faster](https://www.financedigest.com/forescout-and-fireeye-expand-partnership-enabling-faster-response-to-cybersecurity-threats.html "FORESCOUT AND FIREEYE EXPAND PARTNERSHIP, ENABLING FASTER RESPONSE TO CYBERSECURITY THREATS") and achieve higher margins. Secondly, it is becoming increasingly clear that we will struggle to address the global climate [crisis](https://www.financedigest.com/flying-high-could-drones-help-address-the-delivery-crisis.html "Flying High: Could Drones Help Address the Delivery Crisis? ") without addressing our relationship with consumption – and how we make and use products and services. With global resource extraction forecast to double to c.190 billion tonnes by 2060,\*\* the pressure is on for the circular [economy is increasingly being seen](https://www.financedigest.com/bank-of-canada-seen-on-hold-even-as-economy-accelerates.html "Bank of Canada seen on hold even as economy accelerates") as a tool that can enables us to re-design energy and resource intensive models of production and consumption. Thirdly, [consumers are also now increasingly aware](https://www.financedigest.com/increasing-consumer-awareness-to-fuel-adoption-of-trailer-suspension-system-market.html "Increasing Consumer Awareness to Fuel Adoption of Trailer Suspension System Market") of the broader environmental ‘externalities’ of today’s predominently linear economy. This is illustrated by the recent increase in awareness of plastic pollution – 60 years after the launch of lab-synthesized plastics, 5.25 [trillion plastic items are now littering our oceans and governments](https://www.financedigest.com/european-governments-spend-half-a-trillion-euros-on-energy-crisis-report-2.html "European governments spend half a trillion euros on energy crisis – report") across the world are working to ban the sale of single-use products. The resulting publicity has [generated huge momentum around the environmental issues plastics pose and created](https://www.financedigest.com/the-electric-vehicle-sound-generator-market-to-create-turbulence-in-automotive-sector-at-a-cagr-of-14-between-2019-and-2029.html "The Electric Vehicle Sound Generator Market to create turbulence in automotive sector at a CAGR of 14% between 2019 and 2029") an appetite for change. [Finance has a critical](https://www.financedigest.com/hiding-in-plain-sight-finance-as-critical-national-infrastructure.html "Hiding in plain sight – Finance as Critical National Infrastructure") part to play in enabling a transition from linear to circular business models. Its role is two-fold. Firstly, finance has the potential to dis-incentivise [investment in linear business models](https://www.financedigest.com/nissan-renault-to-invest-600-million-to-make-6-new-models-in-india.html "Nissan, Renault to invest 0 million to make 6 new models in India") that contribute to high natural resource extraction. Secondly, it can [support the innovative solutions pushing the circular economy forward](https://www.financedigest.com/taiwans-president-looks-forward-to-britain-supporting-its-cptpp-bid.html "Taiwan’s President looks forward to Britain supporting its CPTPP bid"), enabling circular innovators through supportive financial mechanisms. The World Economic Forum (WEF) has introduced a number of circular [economy initiatives since](https://www.financedigest.com/uk-factories-suffer-worst-month-since-may-2020-as-economy-stumbles-pmi.html "UK factories suffer worst month since May 2020 as economy stumbles – PMI") 2012\. In 2017, it launched the Platform for Accelerating the Circular Economy (PACE) as a [forum for public and private sector leaders](https://www.financedigest.com/young-leaders-forum-niamh-corbett-qa.html "Young Leaders Forum: Niamh Corbett Q&A") to take the commitments needed to accelerate collective action towards a circular economy transition. Comprising 80 public, private, international and [civil society executive leaders](https://www.financedigest.com/us-ftc-leaders-will-target-ai-that-violates-civil-rights-or-is-deceptive.html "US FTC leaders will target AI that violates civil rights or is deceptive") and more than 200 members, the PACE community champions 18 projects across the globe. Value chain [transformation is also a key](https://www.financedigest.com/banking-on-the-future-why-payments-transformation-is-the-key-to-success.html "Banking on the Future: Why Payments Transformation is the Key to Success") focus. In 2018, the Global Plastic Action Partnership (GPAP) launched to translate commitment to a move to a circular [economy for plastics into tangible strategies and investible](https://www.financedigest.com/a-two-way-street-chinese-investment-in-the-uk-will-benefit-both-economies.html "A TWO WAY STREET: CHINESE INVESTMENT IN THE UK WILL BENEFIT BOTH ECONOMIES") action plans. Working actively in Indonesia, Ghana and Vietnam, the WEF has brought key stakeholders together to achieve the targets required to achieve a transition away from the ‘take-use-dispose’ model of plastics production, and to [identify the data](https://www.financedigest.com/new-gleif-challenge-facility-extends-ability-to-trigger-updates-of-legal-entity-identifier-data-to-all-interested-parties.html "New GLEIF Challenge Facility Extends Ability to Trigger Updates of Legal Entity Identifier Data to All Interested Parties"), information, investment and policy changes needed to make this a reality. [Scale360](https://www.weforum.org/scale360-circular-innovation/) [°](https://www.weforum.org/scale360-circular-innovation/) is an initiative which aims to grow the ecosystem for circular fourth industrial revolution (4IR) by mobilising action among innovators, governments, civil society and private sector stakeholders. The [initiative focuses on driving innovation](https://www.financedigest.com/taylor-fay-homes-recruit-cordant-projects-for-innovative-property-initiative.html "Taylor Fay homes recruit Cordant Projects for innovative property initiative") across the fields of plastics, electronics, food and fashion/textiles. The circular economy is now, as a term, part of the [business vernacular, but progress towards achieving full business circularity is slow](https://www.financedigest.com/euro-zone-business-growth-slowed-in-may-as-factories-struggled-pmi.html "Euro zone business growth slowed in May as factories struggled-PMI"). Indeed, today, only 8.6% of the world is circular.\*\*\* At Circularity we believe that nimble, innovative, [growth stage businesses](https://www.financedigest.com/which-kpis-should-a-budding-business-focus-on-for-sustained-growth.html "Which KPIs should a budding business focus on for sustained growth?") play a key role in transforming this challenge into an opportunity. Since establishing the firm in 2015 we have worked hard to develop the network and knowledge base required to source, select and grow a subset [circular](https://www.financedigest.com/why-building-new-products-for-a-circular-economy-is-essential-if-we-are-to-preserve-the-earths-finite-resources.html) businesses that are outperforming their linear competitors whilst [delivering a measurable positive environmental impact](https://www.financedigest.com/adnami-signs-agreements-with-schibsted-and-amedia-to-deliver-high-impact-ads-with-unparalleled-reach-across-the-nordics.html "Adnami signs agreements with Schibsted and Amedia to deliver high impact ads with unparalleled reach across the Nordics"). \*Accenture, Waste to Wealth (2015) \*\*Global Resources Outlook, International Resource Panel (2019) \*\*\*Circularity [Gap Report](https://www.financedigest.com/hurricane-harvey-highlights-magnitude-of-insurance-protection-gap-according-to-aon-outlook-report.html "Hurricane Harvey highlights magnitude of insurance protection gap, according to Aon outlook report") (2020) --- This blog is powered by Superblog. 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