finance initiative - positive impact incubator · 2016-03-07 · circular economy business &...

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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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1

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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