Government and banks work together to accelerate the circular economy
The State Secretary for Infrastructure and Water Management, Vivianne Heijnen, and Medy van der Laan of the Dutch Banking Association have put their signatures to agreements to further develop a circular economy.
This strengthens collaboration between banks and government on accelerating the transition to a circular economy.
A circular economy produces as little waste as possible and avoids unnecessary consumption of raw materials. An economy of this kind is essential in order to achieve climate goals, ease the pressure on our living environment, and make the supply of scarce raw materials more secure. The Netherlands can only achieve its ambition to establish a circular economy by means of joint efforts that bring together businesses, municipalities, provinces, central government and also the financial sector. The agreements signed by government and banks bring into focus what is needed to strengthen the position of circular businesses. Every year government and the banks will discuss progress on the agreements and the circular transition.
Banks and government already collaborate through the Financing Circular Economy working group, for example by developing concrete solutions to problems that circular businesses encounter. These include the way banks calculate financial risks, which is often still based on linear business models that take little account of the scarcity of raw materials or the residual value of products.
Acceleration
The statement signed by the Dutch Banking Association and the banks ABN AMRO, ASN Bank, ING, NWB Bank, Rabobank and Triodos Bank sets out their reciprocal needs for accelerating the transition to a circular economy. For example, banks are asking government to create a level playing field for businesses in the circular economy vis-à-vis the linear economy. Government is asking banks to make circularity an integral part of how financing applications are assessed by 2030. The agreements also address the need for bank staff to acquire knowledge of circular finance and require both government and banks to play an exemplary role in procurement procedures. The signatory organisations affirm that financing for circular businesses is necessary and requires additional attention.
Scaling up is necessary
‘If we want a healthy planet for our children and grandchildren, we cannot carry on making, using and throwing away products and buying new ones like we do now,’ said State Secretary Vivianne Heijnen. ‘The Netherlands wants to be fully circular by 2050. That means having an economy in which raw materials are continually re-used and there is next to no waste. We are working hard to get there, but we still have a long way to go. I've seen lots of wonderful initiatives, but we also need to overcome challenges when it comes to scaling up. Circular initiatives need support if they are to think big and put their ideas into action. That's why I’m pleased we've reached these agreements with the banks. They’ll help us make the switch from a linear to a circular economy.’
‘A circular economy is hugely important if we are to achieve the goals of the Climate Agreement and the Biodiversity Convention,’ said the Chair of the Dutch Banking Association, Medy van der Laan. ‘That’s why government and the banks are already collaborating in the Financing Circular Economy working group. And these agreements strengthen that cooperation. If each of us plays our part and assumes our responsibilities, we’ll get there together. A level playing field for circular products vis-à-vis linear products is especially important, as well as stimulating the demand side. After all, circular producers benefit from consumers who want their products. And that contributes to a sustainable business case, which increases the likelihood of obtaining finance.’