The circular economy offers a powerful alternative to today’s linear “take–make–waste” model. By decoupling economic activity from resource consumption and waste generation, it can accelerate the transition to a more sustainable, resilient and inclusive global economy. It also provides practical pathways for financial institutions to address multiple sustainability goals simultaneously. However, scaling the circular economy requires the widespread adoption of circular business models and significant investment, making private finance essential to driving this transition.
This introductory report is the first one of the “Circular Economy as an Enabler for Responsible Banking” series. It provides a high-level overview of how circular economy approaches intersect with climate, nature, pollution, and healthy and inclusive economies. It is designed to support banks worldwide in operationalizing these interlinkages, helping them meet their sustainability commitments while accessing opportunities for new and better forms of growth and managing long-term risks related to linear economic models.
The “Circular Economy as an Enabler for Responsible Banking” series outlines concrete actions banks can take to move from setting sustainability targets to implementing them. It highlights how banks can integrate circular principles into lending and investment decisions across high-impact sectors, embed circularity within internal policies and processes, engage clients as they transition to circular business models, redirect financial flows toward circular opportunities, and advocate for the mainstreaming of circularity in financial systems and real-economy sectors.
The next publication in the series explores in more depth how circularity contributes to climate mitigation, with other impact areas such as nature to follow in 2026.
Circular Solutions to Achieve Climate Targets
With resource extraction and processing accounting for over half of global greenhouse gas emissions, implementing the circular economy is critical to achieve net-zero or climate mitigation objectives. This paper outlines guidance for banks to effectively embed circular solutions in their climate transition plans to achieve climate mitigation targets. Download the paper here.
It is accompanied by three sector supplements, guiding banks to develop sector-specific financing action plans that promote circular economy principles in high impact sectors with significant circularity potential, namely agrifood, buildings and construction, and textiles.
Together, these resources offer practical, actionable guidance for signatories to the Principles for Responsible Banking as they move from target setting to delivering measurable sustainability outcomes. The Principles for Responsible Banking are a unique framework for ensuring that signatory banks’ strategy and practice align with the vision society has set out for its future in the Sustainable Development Goals and the Paris Climate Agreement.