The present and the future of the circular economy in four Dossiers

Published on Friday, 1 October 2021

The Alliance for the Circular Economy, which we helped found in 2017, has entered a new phase of its activities. In fact, it has launched the publication of a series of Dossiers on important aspects linked to the development and spread of the circular economy.

The project, which is the fruit of in-depth studies carried out by the companies that belong to the Alliance and discussions with external stakeholders, involves a total of four Dossiers, created to identify prospects, disparities and common policies concerning the transition from a linear to a circular economy.

The four topics identified to promote debate with stakeholders are:

  • Measuring circularity: combining global, national and corporate approaches
  • The circular economy and finance
  • The role of circularity in mitigating climate change
  • The circular economy in rural areas and in cities.

 

The first Dossier: Measuring circularity

The starting point for the first Dossier, “Measuring circularity: combining global, national and corporate approaches,” is the acknowledgment that measuring circularity is essential for assessing progress that has been achieved and for setting increasingly ambitious goals.

The dossier provides a mapping of approaches and useful metrics for evaluating circularity, followed by an analysis developed based on methods adopted, resources required, targets and other relevant parameters.

Ample space is allocated to an overview of the experiences gained by the companies that belong to the Alliance, in various fields, including the restaurant industry, banking, waste management, public lighting and the bioeconomy.

The best practices include our CirculAbility Model©, a measurement model that takes into consideration the five pillars of the circular economy along the entire length of the value chain. Beginning with the CirculAbility Model, which represents the Group’s integrated approach, specific approaches for the various business lines and process are identified, such as Enel X’s Circular Economy Report.

But what are the main elements for measuring circularity? The analysis of current indicators forms the basis for the drafting of four policy proposals for effective measurement:

  1. integrating the measurement of circularity into the new national strategy for the circular economy
  2. introducing at regulatory level clear and unequivocal definitions concerning products’ input and output phases
  3. implementing public initiatives to support circularity linked to a standardized measurement approach
  4. introducing support mechanisms for businesses to tap into subsidized financial tools for the development of circular economy projects and improving public-private cooperation to foster their diffusion.
     

Find out more about the first dossier “Measuring circularity: combining global, national and corporate approaches.

 

The Second Dossier: Circularity and finance

The second Dossier, “The Circular Economy and Finance,” takes an in-depth look at the relationship between sustainable finance and the circular economy. With regards to this mutually beneficial relationship, the dossier outlines both the ways in which finance can promote the development of circular business models and the benefits of the circular economy for the world of finance.

The document begins with an overview of the current Italian and European policies concerning sustainable finance, paying particular attention to the initiatives specifically linked to circularity. It then moves on to analyzing the financial profiles of circular business models and identifying the main factors that prevent businesses from accessing financial tools oriented towards the circular economy.

The second dossier also contains a section that is dedicated to companies’ virtuous experiences, including our own “Circular EBITDA” methodology. This is a tool for measuring the proportion of company revenues linked to circular activities and evaluating the social benefits of the investments, in addition to the projects’ economic returns.

Finally, a comprehensive set of proposals to foster the relationship between finance and the circular economy will be formulated to:

  1. encourage and boost company budgets for non-financial issues
  2. extend the sustainability-linked requisites to financial statements, requiring businesses to quantify their use of resources with circular features within their statements or other reports
  3. include the indicators of circularity in the European taxonomy for sustainable finance
  4. establish support mechanisms for sustainable business models
  5. provide small and medium-sized enterprises with training and consultancy tools to support them in taking full advantage of their circular potential.
     

Find out more about the second dossier “The Circular Economy and Finance.”

 

Third dossier: circularity and climate change

The third Dossier, “The Circular Economy and mitigating climate change,” cuts to the heart of why it is so important to adopt a circular approach – the positive consequences for the environment and, in particular, for the climate.

The study was presented on September 24 as part of the events that previewed the 2021 edition of the Sustainable Development Festival, which is promoted by Alleanza per lo Sviluppo Sostenibile (ASviS) – the Alliance for Sustainable Development. The dossier examines the current state of climate change. It reports on the increase in temperatures, forecasts based on various future scenarios, as well as the targets set at international level with the Paris Agreements and those of the European Union. What is clear is that we are not doing enough: we must work much harder at reducing greenhouse gas emissions.

Beginning from this premise, the dossier then examined the opportunities that the circular economy can offer in crucial industrial sectors, such as food production, the chemical industry, transport, textiles, energy and construction. In the section on the energy sector ample space was given to our strategy: from “circular by design” to the management of products’ end of life, we apply circularity in all phases of the lives of products and assets.

The Dossier also formulates a combination of cross-sectoral proposals, such as:

  • measures to support the circular economy system
  • the introduction of consolidated methods for measuring circularity and relative impacts on emissions
  • reinforcing the circular economy in non-financial reporting and the European classifications
  • public awareness, training and engagement initiatives.

 

Find out more about the third dossier “Circular Economy and mitigating climate change

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