Circular economy contributes to UN goals

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In September 2015, seventeen United Nations goals were established to make the world a better and more liveable place. These goals, which span the next fifteen years, are collectively referred to as the Sustainable Development Goals. Many large organisations, including ABN AMRO, have committed to these SDGs. Our current objective is to translate the essence of those sustainable goals into concrete actions, under our shared motto: end poverty, protect the planet, and ensure prosperity for all.

With circular construction, we contribute to innovation and resilient infrastructure. Richard Kooloos Richard Kooloos Head of Sustainable Banking

The SDGs have been designed by a UN working group to replace the Millennium Goals of the year 2000. The main difference between the two types is that SDGs are also aimed at issues in developed countries, rather than only focusing on the developing ones like the Millennium Goals did. An example: 'Make cities and human settlements inclusive, safe, resilient and sustainable'. While policy makers and professionals within the field of sustainability are familiar with the SDGs, I wonder how many people know them outside of those circles. For us as a bank, it is important to bring the SDGs to life by applying them as concretely as possible in our daily operations.

Maximise sustainable impact

Much of what we as a bank do already contributes to the realisation of the SDGs. I believe we should sharpen our focus to maximise our sustainable impact. We cannot contribute to each SDG equally, but what matters is the impact we can realise. Within ABN AMRO we are taking a close look at the effects of our services, products, and internal operations. The SDGs serve as guidelines for the sustainable initiatives we launch. Each of them includes concrete and specific targets. I believe our focus is best aimed at impactful initiatives that contribute to solving the major issues at play across the globe.

High-impact contribution to SDGs with circular construction

In another post, I have written about the circular economy. This theme is eminently applicable to a sector in which we are very active: real estate. By building circularly, we contribute to innovation and a resilient infrastructure (meeting SDG 9) and to making our cities sustainable (SDG 11). Let's discuss a few examples that illustrate the role a bank can play in accelerating the circular economy.

Doing business in the circular economy involves a new and different mindset, from manufacturers and consumers to banks. To continue recycling existing resources within a closed system, and to minimise wasting of those resources, leasing can take preference over purchasing. The consumer uses a product, while the manufacturer remains the owner. When the product has to be replaced, the user simply leases a new version while the manufacturer takes back the old one.

Financial issues within the circular economy

Since manufacturers benefit from maximising product value, they will design the product to be durable and easy to disassemble. So they can reuse, process or resell as much of it as possible, and throw away as little as possible. However, an issue arises: this way it takes longer for manufacturers to get paid, which means they have to pre-finance their production. That's where we as a bank come in. Not only by issuing loans to circular manufacturers, but also by sparring with them to find healthy financial solutions.

Reaching a sustainable solution with the client

Another example: the bank is engaging in dialogue with an office furniture manufacturer. One of their clients is the government, for which they produce desks, chairs and cabinets. If this manufacturer were to switch and start offering workplace services instead of selling office furniture, a financing problem would arise. ABN AMRO is working with the client to find a solution that makes this new business model work. It goes without saying that any and all financing risks are thoroughly investigated.

Step by step towards a closed-cycle economy

The idea of a closed-cycle economy can also be applied to the construction sector. Adjacent to our headquarters in Amsterdam, a new pavilion is being built in which we apply all the circular techniques we can come up with. The project is generating a wide range of new ideas and lessons learned; this experience will be invaluable in realising our sustainable real estate ambitions. This is our double-edged contribution to the development of the circular economy: we benefit from the sustainable functions of this building, and meanwhile offer a tangible example for our clients to see.

Circular construction, flexible use

A major advantage of a circular building is the flexibility that results from using separate components. As user needs shift over time, the building can be adjusted to match the new demand. A factory is easily transformed into a hotel, because of its modular construction. This makes building in regions with population shrinkage viable again; the building can simply and affordably be moved to another location where demand is higher. The separate modules are always available to purchase or recycle, which makes investments in circular projects very attractive in terms of yield. Especially for parties such as housing cooperatives and real estate investors.

Working together towards a better world

Because developers have to think long and hard about form and function, it is important that all parties involved work together in close cooperation right from the start. This also applies to the way we are developing our pavilion. Sustainable Development Goal 17 reads: Revitalise the global partnership for sustainable development. That may be one of our most vital contributions of all. With 400,000 corporate clients we are part of a huge network within the Netherlands, which puts us in touch with smart entrepreneurs, innovative start-ups and engaged foundations and NGOs. Where possible, we connect ideas, people and knowledge to SDG issues.

Your sustainable neighbour

While the SDGs can appear abstract to some people, what we do with them is very concrete. Our sustainable activities make for some great examples. And they may be closer to you than you think. You do not have to live next to the circular hotspot The Valley in Hoofddorp to see for yourself; certainly one of the 20,000 buildings that we have performed a sustainability analysis for can be found near you.

To learn more about the circular economy, read our Circular Economy Guide​ (PDF 4 MB).


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