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P O S I T I V E I M P A C T I N C U B A T O R
Kick-off Webinar
Resource Efficiency: Circular Economy Business & Financing
Models
23rd February 2016
1. Welcome & Introductions – 5 min
2. Circular Economy Business & Financing Models – 50 min
- What is the problem / the need?
- Circular economy business models & illustrations
- Implications for financial institutions
- Q&A
- Tour de table
3. Conclusions & Way forward – 5 min
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AGENDA
I. WELCOME & INTRODUCTIONS
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Financing the SDGs – Global Imperative & Market Opportunity
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POSITIVE INCUBATOR TOPICS
I. INCUBATOR
Opening markets,
financing the “impossible”
Economic Development
SME development
Entrepreneurship
Small-holder farming
Base of the pyramid
Circular Economy /
Resource Efficiency
Waste management & sanitation
Energy efficiency
Water efficiency
Infrastructure
Access to energy, water
Public transport
Smart cities
Guidelines
POSITIVE IMPACT •Contribution to at least one of the three pillars of
Sustainable Development •Negative impacts duly assessed and mitigated as
appropriate
ADDITIONALITY •Priority to be given to processes and projects that will offer
additionality – solutions to banking the “unbankable”
SCOPE •The funding gap: several trillions •To be relevant the Incubator could
aim for 1% i.e. approx. 10 billion •For a project to be of interest to investors: 300
million •Aim for: 500 million
SCALABILITY •Projects should be scalable if they are to make a significant
contribution to addressing the funding gap •Aim for: potential replicability to min.
1 billion
PROFITABILITY •The point of the incubator is to unleash private finance, for
which the profitability item is key. •Aim for: ROI of 10% (indicative)
TRANSPARENCY & TRACEABILITY • Any projects financed should be available
to test the positive impact assessment framework (part of development of the
framework)
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Not enough shifting and almost no additionality.
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The Scale Problem
FUNDING
GAP
Non-existing,
and/or
currently
unbankable
assets ?
ADD
venture
capital, crowd-
funding…
B.A.U. –
existing and
bankable
assets
blended
finance, green
bonds…
SHIFT
II. CIRCULAR ECONOMY BUSINESS & FINANCING MODELS
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The transition to a circular economy asks from
the financing industry to collaborate with
businesses to develop smart ways of using and
reusing resources
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0
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Linear economy Technological
innovations Circular economy
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Five circular business models by Accenture
Circular Supplies: Provide renewable energy, bio based
or fully recyclable input material to replace single-life inputs
Resource Recovery: Recover useful resources/energy
out of disposed products or by-products
Product Life Extension: Extend working lifecycle of
products and components by repairing, upgrading and reselling
Sharing platforms: Enable increased utilization rate of
products by making possible shared use/access/ownership
Product as a Service: Offer product access and retain
ownership to internalize benefits of circular resource productivity
Circular Supplies Resources Recovery Product Life Extension Sharing Platforms Product as a Service
Smurfit Kappa
For production of paper and
cardboard company uses
waste from tomato production.
Avantium
Technology firm producing
PEF. PEF is a new polymer
that is 100% plant based and
100% renewable.
Bundles
Renting of laundry machines
on a pay-per-use basis
Netflix
24/7 access to movies and tv-
series based on a pay-per-use
model
Caterpillar
Designs and produces heavy
use products based on
effective and extensive use
and ease of repair.
Examples of the circular economy
Financial implications
Balance sheet
extension
Cash flow
Credit risk
Financing
Reporting
Financial industry’s role to play
Other types of
financing
Different view on
collateral
End-of-life policy
Financing of the
value chain
III. CONCLUSIONS & WAY FORWARD
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Next steps
• Share further information on current interests and work on the topic with a
view to consolidate potential pilot projects (based on commonality of interests*
& incubator guidelines) (within a week)
• Next webinar to present proposed pilots and pilot leads (within a month)
• In-person convenings as appropriate to procede with the following steps
Note: report on progress in October AGMs
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THANK YOU