04.10.2016 | Sustainable finance
The circular economy is typically viewed through an ecological lens: respecting the environment, preserving resources, reducing waste, etc. But it also offers strong economic advantages, with a potential of creating more than 500,000 jobs in France, and several million across Europe. So why not shift from the linear economy to the circular economy?
The circular economy is first and foremost an ecological approach to preserving the environment. But it also offers a real benefit to the national economy. According to a study by Club of Rome, relayed by the French Institute of Circular Economy, it has the potential to generate 500,000 jobs in France and add 2.5% in GDP. Though it varies by country, this impact is substantial.
In this vein, the Institute of Circular Economy has assessed the impact of developing the circular economy – or improving natural resource management in different countries – in terms of job creation. It would spawn 1.2 million jobs by 2020 in South Korea, nearly 233,000 in South Africa, and 3.3 million by 2026 in Australia.
In Europe, different studies have pointed to numbers ranging from 1.4 to 2.8 million jobs created by reducing natural resource consumption by 17%, with nearly 400,000 coming from a full implementation of the waste framework directive.
These figures support the claims of Accenture, which sees the circular economy as “the biggest revolution of the next 250 years in terms of organizing modes of production and consumption."
In rethinking relationships between economic players, the circular economy stimulates:
In addition, the jobs it generates are often tied to the social and solidarity economy. In short, the circular economy preserves the environment, creates jobs and business, and also represents a socially responsible initiative!
According to France Stratégie, today’s total workforce involved in the circular economy measures at least 800,000 full-time equivalent (FTE) jobs. Most of these are local jobs, created in proximity to demand, in order to provide eco-activities, repairs, leasing and used goods.
It is easy to imagine how a business that manufactures a product might shift to the circular economy: by using recycled wastes as raw materials, favoring renewable energies, limiting consumption of energy and resources, recycling its own waste, etc.
But how can banks take action? First of all, by financing the transition: investments in businesses seeking to adapt their processes and creating or incubating startups in the circular and/or social economy.
BNP Paribas has demonstrated how a bank’s actions can go above and beyond this role:
A subsidiary of the BNP Paribas group, BNP Paribas Real Estate, has outlined its actions in support of the circular economy: