Circular Finance

Interest in the topic of circular finance has been growing over the last few years globally, with Europe out in front. For example, the EU’s Sustainable Finance Action Plan includes six environmental objectives (including transitioning to a circular economy and the sustainable use of resources), as well as a categorization system to define related activities.

Research has shown that circular economy strategies can curb investment risk and drive superior risk-adjusted returns. Potential drivers of these circular economy benefits include a focus on design and business model innovation and diversification, achieving greater resource decoupling, anticipation of stricter regulation, and changing customer preferences.

The Circular Finance in Canada Work Stream is an initiative working with UNEP FI, Delphi and Canadian banks and credit unions focused on developing:

  • Collaborative partnerships amongst financial institutions to facilitate knowledge exchange on best practices and to foster a peer-to-peer network, including with internal, cross-departmental teams.
  • A harmonized, definitional framework with key indicators and information to allow financial institutions to better understand circular economy opportunities, risks, and returns.
  • Support for Canadian banks and other financial institutions with practical solutions and applied approaches for getting started on the subject of circular economy.
  • Stronger linkages between circular finance and its potential to support broader sustainability related goals around ESG and climate / net-zero objectives in key sectors of the Canadian economy.
  • Guidance that will support the ability for banks and other financial institutions in Canada to engage more meaningfully with clients on the subject of the circular economy and related business models, products, and services.

An important output from the workstream is the Financing the Circular Economy Guidance Document which is intended to help Canada’s finance sector accelerate the transition to a circular economy. The overall goal of the Guidance Document is to set criteria for lending and investing in circular economy projects and initiatives, which in turn can help FIs meet their sustainable finance targets and ESG goals.

Publications, Blogs & Articles

Supporting Partners

  • Coast Capital Savings
  • Delphi
  • Desjardins
  • National Bank of Canada
  • Scotiabank
  • TD Bank
  • United Nations Environment Programme Finance Initiative (UNEP FI)