The role of banks in the circular economy

Peterson Ozili and Francis Opene

MPRA Paper from University Library of Munich, Germany

Abstract: The circular economy concept has received considerable attention both in the business sector and in academia. In this paper, we highlight the role of banks in the circular economy. We propose that banks need to: develop a common understanding of the circular economy; issue widely accepted and recognized guidelines on circular economy finance; adapt existing finance models to fit into a circular economy model; offer credit lines to circular businesses; create a green bank; train bank staff; promote a strong culture of waste reduction and material re-use; ensure that the board risk committee is competent in circular risk management and control. Overall, banks have an important role to play both as a leader in circular economy finance and as a lender to companies in the circular economy.

Keywords: banks; circular economy; environment; waste; resources; financial institutions; climate change; sustainable development (search for similar items in EconPapers)
JEL-codes: G21 G22 G23 Q2 Q54 Q56 Q57 (search for similar items in EconPapers)
Date: 2022-02-01
New Economics Papers: this item is included in nep-env
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