At the United Nations Climate Change Conference (COP29) in Baku, Azerbaijan, the multilateral development banks (MDBs) presented their first joint report on the circular economy: “The Circular Economy in Motion”.

• The new report on the circular economy states that countries and companies are seeking to reduce their resource impact in order to cut costs, lower risk in supply chains and reduce the amount of waste.
• The multilateral development banks (Multilateral Development Banks, MDBs) are working to advance the circular economy using a broad range of instruments and focusing on a variety of sectors.
• The new report showcases 20 circular economy projects financed by the MDBs across a range of areas, such as plastics, critical raw materials, textiles, food and electronic waste.

The report includes 20 detailed case studies from around the world and from a variety of fields, ranging from waste management and food to the construction sector, plastics, textiles, battery recycling and the recovery of critical raw materials. The case studies provide an overview of MDB support for the circular economy, covering advisory services, financial support for governments, private sector investment and support for the financial sector.

Drawing on concrete examples, the report sets out six key findings:

• Despite an uneven policy framework, investment in the circular economy is becoming increasingly popular in middle- and low-income countries.
• The multilateral development banks as a group offer a wide range of products to develop and support the circular economy, from tailored loans and investments through to advisory services.
• The private sector is actively engaging with the circular economy, but a more favourable legal framework is needed to make full use of the opportunities the circular economy offers.
• Cities can incubate innovation and drive action.
• The financial sector has a crucial role to play in improving access to finance for circular economy businesses, but it needs guidance on how to seize these opportunities.
• The multilateral development banks' circular economy interventions must actively involve and support the most vulnerable people and the informal sector.

“The African Development Bank recognises the transformative potential of the circular economy, which, through regenerative practices and efficient use of resources, creates youth employment and ecological benefits. Through the Africa Circular Economy Facility (ACEF), the Bank is committed to continuing to enable African countries to seize the many opportunities offered by the transition to a circular economy,” stressed Dr Anthony Nyong, Director for Climate Change and Green Growth at the African Development Bank.

"The circular economy provides a useful framework and comprehensive solutions for addressing the triple planetary crisis – biodiversity loss, pollution and climate change,” said Yoko Watanabe, Director for the Environment in ADB's Climate Change and Sustainable Development Department. “ADB's Environment Action Plan, published during COP29, sets out a roadmap for scaling up nature-positive investment, including measures related to promoting the circular economy in Asia and the Pacific.”

Gianpiero Nacci, EBRD Director for Sustainable Business and Infrastructure, said: "This report is testament to the growing cooperation between the multilateral development banks, which now extends to the circular economy as well. As a group, we are working to help businesses reduce waste, improve resource efficiency and build resilient supply chains. At the EBRD, we are committed to fostering innovation in circular solutions across all our regions."

“The circular economy is a powerful shift that delivers growth within our planet's limits, “ said EIB Vice-President Ambroise Fayolle, who is responsible for financing the environment, climate action and the circular economy, "It calls for bold partnerships and knowledge sharing in order to promote and scale up high-impact solutions. As the European Union's climate bank, the EIB is committed to increasing its support for investment worldwide in climate action, environmental sustainability and the circular economy."

“The financial sector has a crucial role to play in driving the transition to a circular economy, by channelling investment and creating innovative financial instruments that support circular business models and solutions focused on efficient resource use, waste reduction and thoughtful design,” said Gabriel Azevedo, Director of Strategy at IDB Invest. “Adopting the circular economy not only opens up business opportunities for sustainable and inclusive growth, but also plays an important role in tackling the climate crisis.”

"The consequences of climate change, nature loss and pollution are felt first and foremost by developing countries. We can no longer sustain the viability of the planet with a linear economy that grows now and cleans up later. A shift to circular principles can support jobs and national competitiveness, but it requires better rules. The circular economy opens up enormous opportunities for the private sector. The multilateral development banks can play an essential role in supporting countries to create the right policy environment to attract private sector investment that would tap into the opportunities the circular economy offers, “ said Valerie Hickey, Global Director for Environment at the World Bank (Valerie Hickey).

In their joint vision, presented at the World Circular Economy Forum in Brussels in April this year, the multilateral development banks working group committed to promoting knowledge sharing with the private sector, civil society and local, regional and national authorities. The members of the MDB working group are the Asian Development Bank (ADB), the African Development Bank (AfDB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank and IDB Invest, and the World Bank Group (the World Bank and IFC).

Background

The African Development Bank (AfDB) is an international institution whose aim is to promote sustainable economic development and social progress in the African countries that make up its regional member countries (RMCs). www.afdb.org

The Asian Development Bank (ADB ) is committed to building a prosperous, inclusive, resilient and sustainable Asia and the Pacific, while continuing its efforts to eradicate extreme poverty. It was founded in 1966 and is owned by 69 members – 49 from the region.

The European Bank for Reconstruction and Development (EBRD ) is an international bank that promotes private sector development and entrepreneurial initiative in 36 countries across three continents. www.ebrd.com

The European Investment Bank (EIB) is the European Union's long-term lending institution, owned by its Member States. It provides long-term finance for sound investment in order to help achieve EU policy objectives.

The Inter-American Development Bank (Inter-American Development Bank – IDB) is dedicated to improving lives throughout Latin America and the Caribbean. Founded in 1959, the IDB works with the region's public sector to develop and deliver effective, innovative solutions for sustainable and inclusive development. Through finance, technical expertise and knowledge, it fosters growth and prosperity in 26 countries. www.iabd.org

IDB Invest is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects in order to achieve financial results and maximise the region's economic, social and environmental development. IDB Invest manages an asset portfolio of USD 21 billion and more than 394 clients in 25 countries, and it offers innovative financial solutions and advisory services tailored to clients' needs across a range of sectors. www.idbinvest.org

The World Bank Group works to create a world free of poverty on a liveable planet, bringing together finance, knowledge and expertise. It comprises the World Bank, including the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID). Further information can be found at www.worldbank.org, ida.worldbank.org/en/home, www.miga.org, www.ifc.org and www.icsid.worldbank.org