Circular Transformation of Industries The Art of Scaling Circular Supply Chains 2025

4.3 Finance and investments Circular supply chains require upfront investments but cannot deliver immediate returns. Those gains, in the form of savings, resilience and new revenues, materialize in the medium term and, as a result, circular investments should be classified as strategic, with multi-year planning. Securing capital is difficult, given that circular projects compete with linear ones for scarce resources, but financing is expanding. Impact investors, green bonds and public grants are increasingly available. In 2024, global circular funding reached $400 billion, up $170 billion since 2021.8 4.4 Policy and regulation Policy is a critical driver, and local business context matters. Regulations define what is deemed a product and what is waste. They can set reuse and recycling standards, assign producer responsibilities and shape markets with incentives or penalties. Governments can encourage adoption through subsidies – for example, VAT exemptions on refurbished goods. The EU Taxonomy further supports financing by requiring disclosure of circular revenues, capital expenditure (CapEx) and operating expenditure (OpEx). In Europe and Asia, regulation often precedes voluntary action. The EU leads with frameworks such as the Waste from Electrical and Electronic Equipment (WEEE) rules and Packaging and Packaging Waste Regulation (PPWR). Anticipating circularity initiatives could give first movers a competitive advantage. Groupe SEB is already doing so with its right-to-repair rules for home appliances. Circularity-centred public procurement rules can also create a market for recycled goods, thereby reducing supplier risk. France’s AGEC Law, mandating 20% reused or recycled content for all public procurement, is a case in point. Corporate engagement with evolving regulation is essential. Without it, new rules may be misaligned and costly. Active participation helps shape workable standards. Aligning with ISO 59000 or the EU’s Corporate Sustainability Reporting Directive (CSRD) enhances predictability, while consistent metrics and benchmarks ensure comparability and allow companies to set and track progress. Circularity- centred public procurement rules can also create a market for recycled goods, thereby reducing supplier risk. Circular Transformation of Industries 24