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Finance

Trackingcapitalflowsinthecirculareconomy

Behindthecover

Justasstartrailsrevealhiddenpatternsinthenightsky,the

CircularityGapReportFinancetracestheoften-invisiblepathsof

capitalthroughoureconomy.

Thecoverreflectsthisdualmotion—naturalandfinancial—

remindingusthattobuildacircularfuture,wemust

understandwhereourmoneygoesandwhatitenables.

TheCircularityGapReportFinance2

TheCircularityGapReportFinance3

CircleEconomyisdrivingthetransitiontoanew

economy.Inthiseconomywehelpbusinesses,cities

andnationsleveragebusinessopportunities,reduce

costs,createjobsandinspirebehaviouralchange.As

aglobalimpactorganisation,ourinternationalteam

equipsbusinessleadersandpolicymakerswiththe

insights,strategies,andtoolstoturncircularambition

intoaction.

CircleEconomyhasbeenattheforefrontofthecircular

economytransitionsince2012.OurannualCircularity

GapReportsetsthestandardformeasuringprogress

andwemanagetheworld’slargestcircularitydatabase,

encompassingdatafromover90nations,350cities,

and1,000businesses.

TheCircularityGapReportFinance4

IncollaborationwithKPMG

KPMG,asaglobalnetworkoffirmsoperatingin142

countriesandterritories,knowstheintrinsicpower

ofESGtotransformyourbusiness.Withmorethan

275,000partnersandemployeesworkinginmember

firmsaroundtheworld,KPMGprofessionalscanshow

youhowtoenhancetrust,mitigateriskandunlocknew

valueasyoutransformtobuildasustainablefuture.

KPMGservicesareholisticandpracticaltoguideyour

teamstodrivesustainableinnovationacrossyour

organization.Throughindustry-leadingknowledge,

data-driventechnologyandglobalalliances,KPMG

professionals'experienceacrosscriticalESGissues

meansKPMGprofessionalscanassistyouincreating

therightroadmapforyourjourney,puttingESGatthe

coreofyouroperations—whereitshouldbe.

WithsupportfromIFC

lnternational

Financecorporation

WORLDBANKGROUP

IFC

IFC—amemberoftheWorldBankGroup—isthe

largestglobaldevelopmentinstitutionfocusedon

theprivatesectorinemergingmarkets.Weworkin

morethan100countries,usingourcapital,expertise,

andinfluencetocreatemarketsandopportunitiesin

developingcountries.Infiscalyear2024,IFCcommitted

arecord$56billiontoprivatecompaniesandfinancial

institutionsindevelopingcountries,leveragingprivate

sectorsolutionsandmobilizingprivatecapitaltocreate

aworldfreeofpovertyonalivableplanet.Formore

information,visit

.

TheCircularityGapReportFinance5

InsupportoftheCircularityGapReportFinance

JAMIEFERGUSSON,GLOBALDIRECTOROFCLIMATE

BUSINESS,INTERNATIONALFINANCECORPORATION

‘Understandinghowcircularityinvestmentsflowthroughoureconomiesisessentialtounitingstakeholdersacrosstheecosystem—supportinginclusivegrowth,jobcreation,andbusinessresilienceinbothemerging

anddevelopedmarkets.TheCircularityGapReportFinanceisawelcomecontribution,reinforcingtheprivatesector’srolein

unlockingsustainablevalueforcompanies,communities,andcountries.’

‘Thisreportisaclearreminderthatthe

JANEZPOTO?NIK,CO-CHAIR,INTERNATIONALRESOURCEPANEL

globalfinancialsystemstillremains

gearedtowardslinear,notcircular,modelsofresourceuse.Circulareconomyisnot

economicallyattractiveandsufficiently

financiallysupported.Marketsignals

toproducersandconsumers,including

financialflows,areplayingacriticalrole,ifwewantthecirculareconomytobecomeanorm.’

'INGwelcomesthisfirstCircularityGap

ReportFinance.Itgivesgreatinsightinto

JOOSTVANDUN,DIRECTORSUSTAINABLESOLUTIONS

GROUP&CIRCULARECONOMYLEAD,ING

howcapitalflowsarecurrentlyallocatedtocircularactivities,andhighlightsthatmoreactionisneededtounlockthefullpotentialofthecirculareconomybusinesscase.

It’sanimportanttopicforING,aswealsosupportclientsthatareseekingtoaddresssystemiccircularchange.'

TheCircularityGapReportFinance6

‘Werecognisethatfinancingcircular

DRAFKEVANRIJN,

DIRECTOR-GENERALFORTHEENVIRONMENTAND

INTERNATIONALAFFAIRS,GOVERNMENTOFTHE

NETHERLANDS

businessactivityisoneofthekey

bottleneckstoachievingfullcircularityby2050.Ithereforewarmlywelcome

thisinnovativereport.Itisacrucialstepinhelpingusunderstandhowcapital

flowscurrentlyoperateandhowwecanaddressconcreteobstaclestogether.For

theNetherlands,thisisvital—backingourbusinesseswiththeinsighttheyneedto

leadinafuture-proofeconomy.’

‘TheCircularityGapReportFinance

QUENTINDREWELL,SENIORDIRECTOR,CIRCULAR

PRODUCTSANDMATERIALS,WBCSD

providescriticalanalysisofthecapital

flowsneededforthetransitiontoacirculareconomy.ThesefindingssupporttheGlobalCircularityProtocolforBusiness,which

willguidecompaniestomeasure,manage,report,anddisclosetheircircularity

performance—demonstratingresilience,enhancingcompetitiveness,andattractinginvestment.’

‘AttheEuropeanBankforReconstruction

GIANPIERONACCI,

MANAGINGDIRECTORFOR

CLIMATESTRATEGYAND

DELIVERY,EUROPEANBANKFORRECONSTRUCTIONANDDEVELOPMENT

andDevelopment,weseethecircular

economyasavitalpathwaytolong-term

resilienceandsustainability.Byfactoringresourceuseintofinancialdecision-making,wecanunlocksmarterinvestmentsand

strongeroutcomes.Thisreportisatimely

andpracticalguideforinvestors,businessesandpolicymakersalike,helpingtosteer

capitaltowardsamorecircularandresource-efficientfuture.’

TheCircularityGapReportFinance7

‘Trackingcapitalflowsinthecircular

MASSIMIANOTELLINI,HEADOFCIRCULARECONOMY,

INTESASANPAOLO

INNOVATIONCENTER

economyisessentialtounlockingits

potentialasadriverforcompetitivenessandinnovation.Asthisreporthighlights,circularbusinessmodelsremain

underfinanceddespitetheircapacityto

reduceriskandgeneratelong-termvalue.Aligningcapitalwithcircularprinciplesiskeytobuildingamoreregenerativeandfuture-proofeconomy.ThisiswhyIntesaSanpaolohasdisbursedmorethan€20

billionforcircularprojectssince2018andiscommittedtosupportingthecircular

transitionthroughtheactivityofIntesa

SanpaoloInnovationCenter.Thisistrulyacollectivejourney.’

‘Aftermorethanadecadesupporting

businessesinthecirculareconomy,it’s

JAMIEBUTTERWORTH,PARTNER,CIRCULARITYCAPITALLLP

clearthatfinanceisakeygrowthlever.Thisreportoffersavaluablebenchmarkthat

helpsusunderstandwherewestandandwherecapitalcanflowtoscaleimpactandreshapeoureconomiesforgood.’

SUZANNEKUIPERS,DIRECTORCIRCULARECONOMYAND

PRODUCTDECARBONIZATION,KPMG

‘Thetransitiontowardsacirculareconomyiscrucialforvaluepreservationandvaluecreationintheeconomyatlargeandfor

individualbusinesses.Inordertoacceleratethetransitiontowardsthecircular

economy,sufficientfinanceisessential.

Understandingthecurrentcapitalflows—asthisreporthelpstodo—isanimportantsteptowardsincreasingthesefinancialflows

andultimatelyscalingcircularity.’

TheCircularityGapReportFinance8

Preface

Whoisthisreportfor?

Financialmarketparticipants:asallocatorsofcapitalandassessorsofrisk,financialmarketparticipants

playacrucialroleinshapingthefinanciallandscapeforcirculareconomyinvestments.

Financialsectorregulators:taskedwithmaintainingsectorstabilityandaddressingsystemicrisk,

regulatorscanleveragecirculareconomyinsightstomitigateturbulenceandfosterresilientfinancialsystems.

Policymakers:withthemandatetodirectcapital

flowstowardskeypolicyobjectives,policymakerscanusethisreporttoinformstrategiesthatalignfinancewithsocio-economicandenvironmentalgoals.

Thisreportishoweverdesignedforanyoneinterestedinunderstandingtheintersectionoffinanceandthecirculareconomy.Thoughprimarilyconcernedwith

macro-leveltrendsandanalysis,itisexpectedthat

theempiricalresultsandanalysispresentedarealsorelevanttofinancialcounterpartsinbusiness,as

potentialfundseekers,aswellasresearchersandcivilsocietyorganisationsconcernedwiththetopic.

Interpretingthe

CircularityGapReportFinance

TheCircularityGapReportFinanceoffersaglobal

overviewofknowninvestmentsinbusinesses

engagingwiththecirculareconomyoverthesix-

yearperiodbetween2018and2023.Thescopeoftheresearchfocuseson‘a(chǎn)vailablemarketfinance,’intermsofsourcesandinstrumentsthatarehypothetically

availabletoanyprospectivefundseeker.Toprovideaclearpictureofcapitalflows,thereportcategorisesinvestmentdataacrossfourkeydimensions:

?Sources:Whoprovidesthefinance?

?Types:Whichfinancialinstrumentsareused?

?Businessmodels:Whichcirculareconomyactivitiesaresupported?

?Sectors:Inwhichindustriesdoesinvestmenttakeplace?

Thisreportrepresentsacriticalfirststepincircular

economyinvestmenttrackingandisintendedasa

foundationforfutureiterations.Theambitionisto

refinethemethodologyovertimetoprogressively

filldatagaps,broadenthescope,andtoenhance

accuracyandrelevanceinsubsequentversions.Giventhemethodologicalcomplexitiesinvolvedinanalysingfinancialflows,severalscopingdecisionshavebeen

made.Understandingthesechoicesisessentialfor

correctlyandaccuratelyinterpretingandcitingthe

findings.Foraconcisesummaryofkeymethodologicalconsiderations,pleaserefertoSection1:Introduction,foramoredetailedoverviewofmethodological

decisions,pleaserefertothesupplementaryMethodologyDocument.

9TheCircularityGapReportFinance9

Executivesummary

Trackingcapitalflowsinthecirculareconomyis

acriticalprerequisitetoincreasingtheminscaleandimprovingefficacy:theCircularityGapReportFinancetakesthisfirststep.Thecirculareconomy

representsasignificantinvestmentopportunity,a

crucialrisk-mitigationstrategy,andkeymeansto

deliveringasustainableandjusttransition,butthereisaconsiderablegapinourunderstandingofhow

capitalflowssupportit.Asaninvestmentopportunity,theapplicationofcircularbusinessmodelsleveragesresourceefficiencytogeneraterevenuestreams,

provideaccesstonewmarkets,addressarangeofenvironmentalconcerns,andfundamentallydelivermorevaluewithfewermaterialinputs.Circular

businessmodelsalsoplayavitalroleinmitigatingresourcerisk—thoseassociatedwithvolatilityinthepriceandsupplyofcriticalnaturalresources—whichareagrowingconcernandoftenoverlookedin

traditionalfinancialriskassessments.

Ouranalysisshowsthatinvestmentinbusinessesengagingwiththecirculareconomygrew

substantiallyoverthesix-yearperiod2018-

2023butdeclinedinthetwoyearsfollowingits

2021peak.Trackingexternallyraisedcapitalonly,

commercialcirculareconomyinvestmentaveraged

US$27billionannually,withtotalinvestmentinthe

latterthreeyears(2021-2023)87%higherthanthe

first(2018–2020)(FigureA).Whilethisgrowthsignalsastrengtheningbusinesscaseforcircularity,thefailuretoexceed2021investmentlevelssignalsalossof

momentum.Further,theCircularityGapReportFinanceestimatesthatcirculareconomyinvestmentvolumesmakeupjust2%oftotaltrackedinvestment,while

theoverwhelmingmajorityofcapitalfundslinear,

resource-intensiveindustries—increasingeconomicandenvironmentalrisks.WhilecapitalflowstotheEUandUSappeartobethelargest,theanalysismaynotfullycaptureinvestmentsinemergingmarketsduetodatagaps.

Billion$

45

35

25

15

5

0

Peakin2021

$42

201820192020202120222023

FigureAdisplaystrackedinvestmentinbusinessesengagingwiththecirculareconomy2018–2023.

TheCircularityGapReportFinance10

Circulareconomyinvestmentisconcentratedin

conventionalbusinessmodelsinmatureindustries.

Thisanalysisdistinguishesinvestmentincircular

businessmodelsfrominvestmentinlinearbusinessestransitioningtocircularity.Investmentfortransitionrepresents35.7%oftotaltrackedinvestment,while

investmentincircularbusinessmodelsissplitbetweenthethreecirculareconomycategories:

Recoverymodels,whichhaverelativelylowerpotentialforresourceefficiencygains,receivethemostwith

27.5%ofthetotal.Usemodelsreceiveslightlyless

with23.5%,whilejust4.7%isinDesignandProductionmodels,despitetheirpotentialtodrivesystemic

change(FigureB).Thethreecircularbusinessmodelsreceivingthemostfundingare:vehiclerepair,rental,andresale;onlinemarketplacesforusedelectronics;andorganicandagriculturalwasterecovery—eachrelativelyconventionalapplicationsofcircularitythathaveexistedfordecades.

Atthesectorlevel,weseethatthesectoral

proportionsofcirculareconomyinvestmentare

notcloselylinkedwithproportionsofassociated

resourceusepersector(FigureC).Encouragingly,

forcapitalraisedbylinearbusinessesforcircular

economytransitionpurposestherelationshipbetweeninvestmentproportionsandsectoralresourceuseis

morepronounced.Interestingly,circulareconomyinvestmentproportionsaremorecloselylinkedtoclimateimpactthantheyaretoresourceuseatthesectorlevel.Thereissignificantpotentialtoinvestinhigher-valuecirculareconomyapplications,

particularlyDesign&Productioninitiativessuchasmaterialinnovation,andsectorsofstrategic

economicimportance.

%

50

45

40

35

30

20

20

15

10

5

0

Electronics&IT

Transportation

ConstructionAgrifood&Water

Circular

businessmodels

Financefortransition

Resourceuse

Climateimpact

FigureCpresentstheshareofcirculareconomyinvestmentallocatedtoasubsetofsectors,alongsideeachsector’scontributiontoglobalGHGemissionsandresourceuse.Itshows,forexample,thatdespitecontributingto48%oftotalresourceuse,theConstructionsector

receivesjust8%oftotalcirculareconomyinvestment.

FigureBshowsknowninvestmentinbusinessesengagingwiththecirculareconomyoverthesixyearperiodof2018–2023.

Thesectorthattherecipient

businessprimarilyoperatesin

Sectors

SourcesandintermediariesInstrumentsBusinessmodeltype

ThetypeoffinancialinstrumentusedThebusinessmodelcategorythat

bestdescribestheinvestmentactivity

Capitalprovidersandfinancialintermediariesallocatingcirculareconomycapital

C

4

Debt

61%

Transitioning

36%

AGRIFOODANDWATER

22%

Banksand

creditproviders

46%

MANUFACTURINGANDTRADE

Design

andProduction

20%

5%

Institutional

△

investors

Equity

23%

9%

Use

BUILT

23%

ENVIRONMENT

PrivateEquity1

12%

13%

VCs,acceleratorsandangels

6%

TRANSPORTATION

Recovery

Grants

28%

23%

DFI2

7%

12%

OTHER

Government

Unknown

10%

14%

9%

Unknown

6%

.Private

●Public

1

CGRFtrackssourcesandintermediariesbasedonthe

allocatorofcapital.ThismeansthatdespitePrivateEquityleveragingsignificantamountsofdebttofinancebuyouts,thiswillhavebeencapturedintheBanksportionasthe

providerofthisdebt.

TheCircularityGapReportFinance

2DevelopmentFinanceInstitution(DFI)istheonlyinstancewheredataacquiredfromproprietarysourceswas

supplementedbyowncollecteddata.Theproportion

collecteddirectlyfromDFIsisonlyrepresentedinthesourcecolumnastherelationshipstotheothercolumnswere

undeterminable.Theyarethereforepresentedasunknownintheothercolumns.

3Unknownasasourcereferstoasubsetofdealsforwhich

allnecessaryinformationwasavailableexceptfortheactualproviderofthecapital.Thesewerekeptininstanceswherethedealsmetallotherscopingcriteria.

4Transitioningbusinessmodelsreflectscapitalraisedbylinear

businessesspecificallyforcirculareconomypurposes.It

coversgreenloansandsustainability-linkedloansonly.

11

TheCircularityGapReportFinance12

Thelackofharmonisedfinancialsectortrackingandreportingoncircularityobscuresinvestmenttrendsinthecirculareconomy.Intheabsence

ofwidespreadreportingoncirculareconomy

investments,thisstudycombinespublicand

proprietarydatasourcestocapturehowcapital

flowsintocircularbusinessesandlinearbusinessesintransitiontocircularity.Thefindingscapturerealeconomyinvestmentsintheformofloans,equity

andgrantsawardedtocompanieswhoseprimary

activitiesareconsideredcircular,aswellasthe

proportionofgreenandsustainability-linkedloanswheretheUseofProceedsorkeyperformance

indicatorsrelatetothecirculareconomy.Project-

levelfunding,corporateself-financing,domestic

publicspending,andfinancialeconomytransactionsareexcluded.Asaresult,thereportedinvestmentvolumesshouldbeseenasabaselineestimate

ratherthanafullaccount.Insteadoffocusingon

totalvolumes,thedistributionofinvestmentacrossthereport’svariousdistinctionsprovidesthemostreliableinsightsintocirculareconomyinvestmenttrends,particularlyasasignalofthecommercial

businesscase.

Tounlockthefullpotentialofthecirculareconomybusinesscase,coordinatedactionisneededacrossfinancialmarketparticipants,regulators,and

policymakers.Astheeconomicsofresourceuseshift,theneedtoimprovethescaleandefficacyofcirculareconomycapitalflowsisclear.

Thefollowingactionsarecrucialtomakethis

areality.

?Forfinancialmarketparticipants:

Recognisethevalueofcirculareconomybusinessmodels,developeffective

approachestoassessthem,integrate

resourcerisksintofinancialassessments,andprioritiseinvestmentsthatsupport

long-termsustainabilityandresilience.

?Forfinancialsectorregulators:

Standardisecirculareconomydefinitionsandframeworks,provideguidanceon

integratingresourcerisks,mandate

resourceriskconsiderations,andsupporttheinclusionofthecirculareconomylensinfinancialsectorreporting.

?Forpolicymakers:Internalisethesocialandenvironmentalcostsofresource

depletionandresourceriskthrougha

rangeofpolicymeasures,removebarrierstocirculareconomyactivities,andleveragepublicprocurementandinvestmentto

createstabledemandandstimulatemarketgrowthforcircularsolutions.

TheCircularityGapReportFinance14

Glossary

Businessestransitioningtocircularityarethosewheretheprimarybusinessactivitydoesnot

contributetocirculareconomyobjectives,butwheretheyareraisingcapitaltoimplementsomecircularpractices.Thistransitionistrackedthroughtheuseofspecificfinancialinstruments,namelygreenloansandsustainability-linkedloans,thatincludeUseofProceedsorkeyperformanceindicatorsrelatedtoresourcesorcirculareconomyobjectives.

Circularbusinessmodelsreferstocompanieswhoseprimaryactivitycontributestocirculareconomy

objectivesbykeepingproducts,components,and

materialsinuseandattheirhighestvalueforaslongaspossible.Themodelsaimtooptimiseresource

useandminimisethroughstrategiessuchascirculardesignandproduction,product-lifeextension,reuse,andmaterialrecovery,amongothers.[

Source

]

Circleeconomyfinancereferstocapitalthatflowstobusinessesengagingwiththecirculareconomy.Thisincludesbothinvestmentincircularbusinessmodelsandcapitalraisedbylinearbusinessesforcircular

economypurposes,specificallythroughgreenloansandsustainability-linkedloans.

Developmentfinanceinstitutions(DFI)arepublic

financeinstitutionsthatprovidecapitalinsupport

ofsustainabledevelopment.DFIsplayakeyrole

infinancingcirculareconomyandclimate-focused

investmentsbyprovidinglong-termcapitaltohigh-

impactsectorsthataretypicallyunderservedby

commercialfinance.[

Source

]Multilateraldevelopmentbanks(MDBs)areasubsetofDFIsestablishedby

multiplemembercountries.Inadditiontoprovidingcapital,MDBsofferpolicyadvice,technicalassistanceandcapacitybuildingtocreateanenabling

environmentforsustainableinvestment.[

Source

]

Financialflowsreferstothemovementofcapital

betweenactors,sectors,orregions,encompassing

variousformsoffundingsuchasgrants,debtand

equity.Inthecontextofcirculareconomy,this

includesinvestmentsadoptingcircularbusiness

modelsandfundingprovidedtotraditionalbusinessesimplementingcircularpractices.

Greenloansareanytypeofloaninstrumentmadeavailableexclusivelytofinanceorre-financeeligibleGreenProjects.Greenloansmustalignwiththe

fourcorecomponentsoftheGreenLoanPrinciples.

[

Source

]Inthecontextofthecirculareconomy,

eligibleactivitiesmayincludeeco-efficientand

circularproductiontechnologies,environmentally

certifiedproducts,resource-efficientpackaging,wasteprevention,recycling,remanufacturing,andvalue-

addedproductsfromwaste.

KeyPerformanceIndicators(KPIs)inthecontext

ofsustainability-linkedloansarequantifiablemetricsselectedtomeasureaborrower’sperformanceagainstpre-definedSustainabilityPerformanceTargets.Theyserveasthebasisforassessingimprovementsinthe

borrower’ssustainabilityprofile,withthefinancialtermsoftheloanpotentiallyvaryingbasedontheachievementofthesetargets.[

Source

]

Product-as-a-serviceisabusinessmodelwhere

customerspayforaccesstoaproduct’sfunctionalityorbenefitsratherthanowningitoutright.The

companyretainsownershipoftheproductandis

responsibleforitsmaintenance,upgrades,and

end-of-lifemanagement.Thisapproachencouragesproductlongevityandresourceefficiency.[

Source

]

Realeconomyreferstothepartoftheeconomythatproduces,provisionsandtradestangiblegoodsandservices.Itcontrastswiththefinancialeconomy,

whichdealswithfinancialmarketsandthetradingoffinancialassets.[

Source

]

Resourcesinclude,forexample,arableland,fresh

water,andnaturalmaterials.Theyareseenasparts

ofthenaturalworldthatcanbeusedforeconomic

activitiesthatproducegoodsandservices.Materialresourcesarebiomass(suchascropsforfood,energyandbio-basedmaterials,aswellaswoodforenergyandindustrialuses),fossilfuels(inparticularcoal,

gas,andoilusedforenergy),metals(suchasiron,

aluminium,andcopperusedinconstructionand

electronicsmanufacturing)andnon-metallicminerals(largelyusedforconstruction,notablysand,gravel

andlimestone).[

Source

]

Resourceefficiencymeanscreatingmoreorthe

same(economic)valuewithfewerresourceinputs.It

canalsoinvolvereducingtheenvironmentalimpactsassociatedwithresourceusetobreakthelinkbetweeneconomicgrowthandtheuseofnature.Inthissense,resourceefficiencyiscloselylinkedtotheconceptof(relative/absolute)decoupling.[

Source

]

Resourceriskistheexposuretodisruptionsinthe

supplyofmaterialsandresourcesduetofactorssuchasmarketvolatility,geopoliticalconflict,resource

scarcity,environmentaldegradation,orregulatory

change.Itreferstothevulnerabilitybusinessesfacewhentheyrelyonconventionalsupplychainsthatmaybecomeunstable,threateningproductioncontinuity,costpredictability,andlong-termresilience.[

Source

]

Sectordescribesanycollectiveofeconomicactorsinvolvedincreating,delivering,andcapturingvalueforconsumers,tiedtotheirrespectiveeconomic

activity.Formoreinformationonoursectoralaggregations,pleaserefertotheMethodologyDocument.

Sustainability-linkedloansaredebtinstrumentswherethefinancialterms—suchasinterestrates

orpaymentschedule—aretiedtotheborrower’s

achievementofpredefined,ambitious,and

measurablesustainabilityperformancetargets,

typicallyexpressedthroughKPIs.Sustainability-linkedloansaimtoimprovetheborrower’ssustainability

profileandaregenerallyusedforgeneralcorporatepurposes.Inthecontextofthecirculareconomy,

theycansupportbusinessescommittedtoincreasingrecyclingrates,usingrecycledrawmaterials,or

improvingresourceefficiency.

[Source]

Transitionfinancereferstofundingforcompaniesthatareactivelyworkingtowardsnetzero.Itinvolveslendingtobusinesseswithascience-basedplanto

reduceemissionsinlinewiththeParisAgreement.

Financialinstitutionsincreasinglyviewcircular

economypracticesasatoolforclimatemitigation,embeddingcircularityintobroadertransitionplans.

[Source]

UseofProceedsisarequirementofgreenfinance

instrumentswherethecapitalraisedmustbe

allocatedtospecificeligibleenvironmentalprojects.UseofProceedsisadefining