The idea of the circular economy has been around for decades. Essentially it refers to an economy that is made up of materials that either biodegrade or circulate at high quality without harming the environment. And it’s becoming increasingly important that we move towards one, not only because material-rich countries like China are now using more than they are producing, but because global overconsumption has already led to a sharp reduction in available resources—and a reversal of this trend is nowhere in sight. One day our economy will not be able to find what it needs on the market, so by then it has to be well on its way towards a truly circular economy.
So, how are we getting there?
EU leading the charge
The European Commission has promised to release an ambitious (in their own words) circular economy strategy in late 2015, with the aim to “transform Europe into a more competitive resource-efficient economy” with a focus on several economic sectors. One area specifically mentioned is waste, which, according to the founding principles of the circular economy, shouldn’t exist (sorry, raccoons)—rather, bio-material used should be compostable, and everything else should be reusable with minimal energy.
Luxembourg currently has the EU council presidency and the initiative is set to be released before it is handed over to the Netherlands in January 2016. The Netherlands have stated, however, that they will continue the strategy.
Our friendly northward neighbours
Technology is helping to put the circular economy within our grasp, but one remaining roadblock is getting the financial aspect right when it comes to new, green business models. This is why we recently announced plans to team up with KPMG Netherlands to marry financial connections to environmental expertise.
Our Dutch friends have a long and proven history of providing services regarding environmentalism—things like carrying out impact assessments and government policy evaluations. KPMG Netherlands is also an ambassador for the national “circular hotspot” initiative, which aims to position the Netherlands as the leader in moving towards a circular economy.
Here in Luxembourg, of course, we have a strong link to the finance industry. Last year, we signed a Memorandum of Understanding with the Luxembourg EcoInnovation Cluster, in which we pledged to help bring the finance sector into the fold by investigating the resources, business models, and technology apt to a circular economy.
In order to make the circular economy spin, finance and environmentalism will need to be intertwined more and more seamlessly.