Amsterdam, 30th June 2025 — Businesses engaging the circular economy raised nearly US$164 billion between 2018 and 2023, according to the Circularity Gap Report (CGR®) Finance released today. Investment in circular business models surged by 87% in the latter half of the period (2021–2023) compared to the earlier years (2018–2020), showing growing investor appetite and an increasing business case for the circular economy. Yet most capital is still flowing to more conventional solutions like car repair, resale of electrical goods and recycling, leaving many high-impact innovations underfunded.
The Circularity Gap Report Finance is the first empirical global study that quantifies and explains the global financial streams to circular business models, such as resale and repair, which allows for estimating the ‘gap’ in finance for a circular economy. It was authored by the Amsterdam-based impact organisation Circle Economy in collaboration with KPMG International, with support from the International Finance Corporation (IFC).
The report highlights that circular economy investments can deliver risk-adjusted returns. Circular business models generate additional revenue, unlock new markets, and deliver greater value from fewer resources. In addition, circularity is emerging as a key strategy for the financial sector to manage resource risks from supply chain disruptions and material scarcity—risks that are now more relevant than ever, considering trade wars and geopolitical instability.
The sector increasingly recognises these benefits: investment in the circular economy has grown from US$ 10 billion in 2018 to US$ 28 billion in 2023, peaking at US$ 42 billion in 2021. While this upward trend signals a strengthening business case for circularity, the failure to surpass the 2021 peak suggests waning momentum. Banks account for the majority of these investments in the form of debt. Nevertheless, circular investments still represent just 2% of all tracked capital (in the scope of this report), suggesting a vast unrealised potential.
Investments mainly go to conventional applications of circularity, like rental and repair, which have existed for decades. High-impact solutions and innovations in design and production received just 4.7% of all investment, despite their potential to eliminate waste and pollution at the source.
‘The circular economy isn't just a sustainable solution—it’s an essential tool to manage financial risk,’ said Marvin Nusseck, Finance Lead at Circle Economy. ‘From supply disruptions tied to resource dependence on single countries, to the rising likelihood of taxes on virgin materials, the economics of resource use is shifting. Circular businesses are well-positioned to thrive in this new reality. That’s why investors must rethink how they assess risk and value in circular models—updating their frameworks to reflect the circular economy’s benefits and building resilience as a result.’
The global economy is only 6.9% circular today*, and the circularity gap continues to widen. Redirecting finance from linear to circular activities is crucial to reversing this trend. A more circular economy would enable us to maintain high living standards while reducing environmental pressure and building long-term economic resilience.
Investors and lenders can update valuation and risk assessment methods to reflect the retained value of durable, repairable, leased or reusable products and the reduced reliance on volatile global supply chains.
Financial regulators can accelerate this shift by standardising circular definitions and metrics as well as mandating disclosures related to the circular economy. This includes requiring companies to report natural resource dependencies and incorporating resource risk into financial stress tests—such as the impact of material shortages or ecological collapse.
Policymakers can explore a range of fiscal measures that more effectively recognise the social and environmental cost of resource use and the economic risk this involves. Public institutions can reduce the perceived risk of the circular economy by generating market demand for circular products and services through green public procurement and direct investment in critical circular infrastructure.
High-impact circular models remain largely underfunded, representing significant untapped potential and a missed opportunity to build a more resilient financial sector. Realising this potential will require targeted policies, updated financial frameworks, and a concerted effort to shift capital toward circular solutions.
‘The economic case for continued investment in the circular economy is clear. Business leaders, capital providers and investors now understand that in an uncertain geopolitical and economic environment you can’t have long-term growth without putting circular economy strategies at its heart,’ said Arnoud Walrecht, Circular Economy Lead, KPMG Netherlands.
‘Our findings reveal that the economic case for investment in the Global Circular Economy has been made and is embedded in C Suite thinking and planning. Whether its tackling supply chain blockages or navigating the regulatory environment for higher levels of recycle or reuse models, the business community is facing a new reality. Our findings show that progress is being made, but far more scale and focus is required and we can achieve through collective, international focus on ensuring that higher levels of capital are directed towards circular economy opportunities.’
* According to the Circularity Gap Report 2025 by Circle Economy
About Circle Economy
Circle Economy is driving the transition to a new economy. In this circular economy, we help businesses, cities, and nations leverage business opportunities, reduce costs, create jobs and inspire behavioural change. As a global impact organisation, our international team equips business leaders and policymakers with the insights, strategies, and tools to turn circular ambition into action.
Circle Economy has been at the forefront of the circular economy since 2011. Our annual Circularity Gap Report (CGR®) sets the standard for measuring progress, and we manage the world’s largest circularity database, encompassing data from over 90 nations, 350 cities, and 1,000 businesses.
About KPMG International
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KPMG firms operate in 143 countries and territories with more than 273,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. Each KPMG member firm is responsible for its own obligations and liabilities. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.
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