October 31, 2022

Circle Economy presents ways to tackle climate change through the circular economy at COP27

The Circle Economy team is heading to the 27th United Nations Climate Change Conference 2022 (COP27) in Sharm el-Sheikh, Egypt. On the 11th and 17th of November, we will be talking about the future of humanity—and why we must go circular. Along with our partners, we’ll shed light on how circular economy strategies align with the climate agenda, as well as how they can contribute to halting climate breakdown. 

‘Increasing the circularity of the world economy is a tool to combat climate change. Circle Economy has always been a practice-oriented organisation. At COP27, we are going to share our hands-on expertise to help businesses, cities and nations talk less and act more—providing practicable solutions for their climate transformation,’ notes Circle Economy CEO Martijn Lopes Cardozo in the run-up to the conference.

Here is an overview of the sessions we will participate in:

Laying the groundwork for a circular Latin America 

A growing economic powerhouse that’s home to a wealth of unique ecosystems, Latin America is at the heart of the global climate transition. To  present and discuss the methodology to develop the Circularity Gap Report (CGR) for this region, we will participate in a presentation called 'The Circularity Gap Report for Latin America and the Caribbean: Establishing a regional baseline for the circular economy'. This COP27 event will be held on the 11th of November, from 09:30 to 10:15 EET, at EuroKlima Pavilion and is co-organised by IDB, IDB Invest, UNEP, ECLAC, and Strategic Partners of the Circular Economy Coalition for Latin America and the Caribbean.

This presentation—and corresponding project—is part of our Circularity Gap Reporting Initiative. This Circularity Gap Report aims to enable national stakeholders in Latin America to better understand opportunities for change and the benefits of a circular economy for the labour market, environmental conservation and climate change mitigation, thus enabling Latin America to be compared with other geographies. The baseline analysis can then serve as a ground for developing more nuanced Circularity Gap Reports for Latin American nations. 

Navigating through murky waters of circular indicators

How do governments and businesses track circularity in their value chains and set tangible climate targets? Surprisingly, harmonised and widely adopted circular metrics are still lacking. This makes circular target-setting self-defined, self-serving and lacking accountability, and impedes progress towards net zero. The good news is that public and private circular indicators are taking shape, and beginning to form a coherent framework. The Circular Economy Indicators Coalition (CEIC) will discuss the latest developments in this field at the session 'Linking circular economy progress to climate impact: Guidance for governments and businesses', on the 17th of November, from 14:30-15:30 EET, at the Business Pavilion.

The CEIC is a collaboration between PACE and Circle Economy, in partnership with Accenture. It is aimed at supporting corporate circular target-setting by providing best practice indicators that will enable businesses in various sectors to share the same standards for circularity. CEIC will also equip businesses with tools to define, set and track meaningful circular targets. 

A bottom-up approach to green urbanisation 

Cities generate the bulk of global GDP and the lion's share of greenhouse gas emissions. As the centres of education and innovation, urban areas also hold the keys to green transition, including through the circular economy. Cities Alliance and  ICLEI – Local Governments for Sustainability have organised the session 'Tackling urbanisation, climate and poverty in cities through circular economy' to examine how cities can go circular and improve their citizens' livelihoods at the same time. Circle Economy will join colleagues from EMF, Arup, Cities Alliance and ICLEI on stage on the 17th of November, from 14:00 to 14:40 EET, at the Action Hub. 

Traditionally, cities have taken a top-down approach: mandating particular policies for their inhabitants, for example. However, we argue that a bottom-up approach is also viable for transforming typical cities into circular cities. Informal settlements and economies can serve as a starting point for circular transformation because circular practices—such as repair and reuse—are already common there. This session will also elaborate on means for cooperation between different economies to ensure more inclusive, sustainable urban growth.

Paving the way to more effective circular finance

Most climate initiatives today focus on the renewable energy transition and boosting energy efficiency—yet research shows that 70% of greenhouse gas emissions stem from material use and handling. This is why the circular economy, which cuts industrial emissions, is instrumental in achieving climate goals. Yet, despite a growing appetite for circular investment, financiers struggle to make informed decisions and still view circular projects as risky. As of today, circular investment lacks a unified assessment standard and understanding of the potential value and risk.

To address these challenges, we co-formed the Financial Institution Circularity Exchange Network, which includes international financial institutions (IFIs), private banks and non-profits and is supported by the Ministry of Infrastructure and Water Management of the Netherlands. At the EIB/Benelux Pavilion, on the 17th of November, from 17:30 to 19:00, we will present the brainchild of this collaboration: the ‘Circular finance roadmap for international financial institutions'. It proposes a series of concrete steps to unlock the potential of IFIs to fund the circular transformation. With this proposed agenda, we hope to motivate major finance organisations to develop a formalised roadmap for more effective investment in the circular economy. 

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