In the Netherlands, there is currently a large funding gap for circular economy initiatives, particularly early-stage funding for circular ventures. The Circular Innovation Ecosystem (CIE) unpacks how cities and financial institutions can work together to create a vibrant ecosystem that stimulates circular entrepreneurship.
The paper Financing Circular Economy Innovation in the Netherlands authored by Metabolic Institute with support from the Goldschmeding Foundation, reveals a large funding gap for circular economy initiatives in the Netherlands, particularly early-stage circular ventures.
Interviews with city municipalities, entrepreneurs, financial institutions and working groups indicate that the funding gap is especially acute for higher value-yielding circular business models and activities such as reducing, reusing, repairing, and refurbishing. It is these activity types that have the largest potential to increase the economy’s resource efficiency, lower its impacts, and provide high-quality employment opportunities in cities.
Building a ‘circular innovation ecosystem’
To address current bottlenecks, the paper proposes the creation of a mission-driven investment fund and ‘innovation ecosystem’ that convenes impact investors, philanthropies, and city governments.
Numerous Dutch cities have impressive track records when it comes to circular economy plans, but access to finance is one of their most significant barriers to delivering on these plans.
In addition to systemic impact investing and fundraising, the fund will aim to create a circular innovation ecosystem that brings together capital, knowledge, and networks of expertise to provide entrepreneurs in the circular economy with the financial and non-financial resources they need to scale up their businesses.
“We believe that circular innovation and job opportunities are created by financing circular entrepreneurs. But financing alone is not enough; we have to build a support system for entrepreneurs on an urban level,” said Birgitta Kramer, Circular Economy Programme Manager at the Goldschmeding Foundation. “The ‘Circular Innovation Ecosystem’ is a first step towards guiding financiers, entrepreneurs and local governments to collaborate in this approach.”
The Circular Innovation Ecosystem (CIE) aims to support Dutch cities not only in achieving their circularity targets, but critically on regional recovery and employment strategies for building back better in light of the COVID-19 pandemic.
A call to action
An impact- and mission- driven finance ecosystem has potential to accelerate the transition to a circular economy that equitably distributes prosperity to all and safeguards the natural world.
We invite the following stakeholders to collaborate with us to advance the development of such an ecosystem:
- Financiers or investors with creative ideas and strategies for stimulating early-stage circular innovation in the Netherlands
- Asset owner or fund managers with the curiosity to develop and test impact-driven frameworks for portfolio management and evaluation
- Accelerators or incubators committed to supporting Dutch circular innovators and entrepreneurs
- Circular innovators or entrepreneurs interested in matching higher value circular solutions to the contexts and challenges of Dutch municipalities
- Municipalities looking for novel ways to deploy finance in service of circularity strategy
To learn more, please send an email to the CIE team at: firstname.lastname@example.org