Circular economy, banks and other financial institutions: what’s in it for them?

Peterson Ozili

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, I highlight the benefit of the circular economy to banks and other financial institutions. The paper uses discourse analysis methodology to present an overview of the circular economy concept and the benefit of the circular economy to banks and other financial institutions. The findings show that some benefit of the circular economy to banks include: (i) greater loan diversification opportunities, (ii) promotes responsible and sustainable banking, (iii) increased lending to circular clients and the recycling sector which means more profit for banks, and (iv) correcting the bad perception about banks in society. Some benefit of the circular economy to other financial institutions include: (i) issuance of special insurance policies for reused products; (ii) greater sustainability-adjusted return on investment; (iii) greater funding to microfinance institutions; and (iv) more opportunities for collaborative funding to circular businesses. This study contributes to the scant literature that examine the role of the finance industry in the circular economy.

Keywords: circular economy; linear economy; banks; financial institutions; criticism; sustainability; climate change; waste; insurance; sustainable finance; sustainable banking; hedge funds; microfinance institutions (search for similar items in EconPapers)
JEL-codes: G02 G21 G22 G23 G24 G29 Q01 Q20 Q32 Q54 Q56 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-cfn, nep-env, nep-fdg, nep-ias and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Circular Economy, Banks, and Other Financial Institutions: What’s in It for Them? (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:107397

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