Creative mindset needed to achieve circular economy in 2050

Press release -

Kanalen van Amsterdam

If the Netherlands is to succeed in its ambition to have a fully circular economy by the year 2050, thousands of large and small companies will have to change their business models. ABN AMRO draws this conclusion in its report “Alles van waarde: circulariteit door de sectoren heen”, which was released today . The bank provides support to companies that are going circular with new funding models. These funding models contribute to ABN AMRO's aspiration for 2020 to have financed at least a hundred deals with a total of one billion euros spent on circular company assets. The subsequent emission savings will add up to one million tonnes of CO2.

The new earnings models preceding the fully realised circular economy are already sparking big changes in various sectors. Corporate service and IT are experiencing explosive growth in terms of economic importance, while tangible assets are gradually getting pushed to the background. This comes hand in hand with a new shift in focus from ownership to access, which directly or indirectly impacts all sectors of the Dutch business community. ABN AMRO's report identifies and describes opportunities for twelve individual sectors in a circular economy.

Towards supply chain financing

According to ABN AMRO's predictions, overall product sales revenues are on a downward trend, while profitable growth will instead be generated by lease arrangements, paying-as-you-go, output and aftersales services. Naturally, financing models have to be updated and adjusted accordingly. Currently the bank mostly funds independent companies, but expects to gradually move into supply chain financing as the circular economy develops.

Circular business models call for new funding options

Consequently, it's important to gain a clear understanding of companies' earnings models and the chain's financial performance, from raw material suppliers to end users. By sharing knowledge and expertise, businesses and the financial sector can reinforce one another for mutual gain: “A creative mindset is needed to achieve the circular economy we envision, so at ABN AMRO we want to lead the way within the sector,” says ABN AMRO's CEO Kees van Dijkhuizen,. “We're investigating the various funding options by combining our circular business model insights with our expertise in financial solutions and risk management. That's how we enable and assist our business clients in best leveraging the opportunities that lie ahead in the circular economy.”

The Netherlands at the forefront

As the world's population expands to an estimated 9.5 billion in 2050, worldwide demand for products is rapidly on the rise as well. Our current consumption profile prompts us to consider the physical limits of our planet, making the transition to a circular economy an obvious next step. Although the Netherlands is the world’s number one in waste recycling and is also gaining ground in other areas of sustainability, ABN AMRO is not yet satisfied that we've done all we can. Upcycling materials is still in its infancy and our food waste remains relatively high: 38 percent of food for human consumption ends up being thrown out or used to feed livestock. With Dutch customers owning more and more household goods, our commodity footprint has increased from 13.1 tonnes (2004) to 13.7 tonnes (2014), so there is still a lot we can do.

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