New mechanisms needed to tackle Dutch early-stage circular economy funding gap
- There is a large funding gap for circular economy initiatives in the Netherlands, particularly early-stage ventures
- Achieving a circular economy by 2050 requires new finance and collaboration mechanisms
- City- and regional-level ‘innovation ecosystems’ can address critical bottlenecks
New research 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. Entrepreneurs in these areas of the circular economy struggle to find funding even though these activity types have the largest potential to increase the economy’s resource efficiency, and provide high-quality employment opportunities in cities. Research indicates that achieving a circular economy in the Netherlands could create approximately 200,000 new jobs by 2030.
The paper Financing Circular Economy Innovation in the Netherlands authored by Metabolic Institute with support from the Goldschmeding Foundation, highlights a lack of systemic collaboration as a critical barrier to circular innovation, and proposes new approaches to circular economy financing in the Netherlands. “Blended finance instruments in particular can help to address circular economy related risks, and make the circular economy more investable for the private sector,”’ said Seadna Quigley, Lead Circular Finance at Metabolic. Public-private collaboration in the form of blended finance works to de-risk circular asset classes by using public or philanthropic capital to stimulate the market, provide proof-of-concept, and draw private-sector capital into the circular economy. “But lack of funding is not the only problem facing Dutch circular economy entrepreneurs,” said Liz Corbin, Director of Metabolic Institute. “They also lack access to experts and the necessary knowledge to navigate the funding landscape.”
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 an enabling 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.”
Dutch city and regional governments, financial institutions, and circular economy working groups interested in advancing the future development of the initiative are invited to collaborate.
Media contacts:
Metabolic – Contact Communications Lead Kate Black on (+31) 6 555 75083 or media@metabolic.nl
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About Metabolic Institute
Metabolic Institute is a think tank working at the intersection of academic research and real-world experimentation. We build collective intelligence around pressing global challenges – connecting society, policy, industry, and academia with knowledge and tools to navigate towards a sustainable future. The Institute forms part of the broader Metabolic ecosystem of organizations tackling global sustainability challenges through consulting, research, and venture-building.
About the Goldschmeding Foundation
The Goldschmeding Foundation works towards an inclusive and sustainable society based on the belief that a better world can be created when people serve each other. To this end, we support innovative projects and excellent scientific research in the fields of Inclusive Labour Market, Circular Economy and Humane Society.