Climate Change

Ellen MacArthur Foundation report highlights key investment opportunities

A new report by UK charity The Ellen MacArthur Foundation advises policymakers on paving the way for a low-carbon recovery from the Covid-19 pandemic. 

It states that, in order to recover from the pandemic in a resilient, sustainable way, policies that focus on long-term ‘recovery’ efforts will be needed just as much as short-term ‘rescue’ efforts are. It notes ‘many countries around the world are still prioritising ‘brown’ stimulus packages over ‘green’ ones, relaxing … laws around controlling pollution and standards for vehicle energy efficiency’.

Front cover of 'Circular economy and the Covid-19 recovery'Acknowledging governments’ response to challenges posed by the pandemic, which has so far consisted of increasing budgets to address ‘short-term liquidity needs’ for SMEs, the report focuses on how to lay foundations for a recovery from the pandemic that benefits people and the planet by restructuring these SME schemes, and investing in local businesses and value chains that reinforce circular economy principles.

The report groups potential circular investment opportunities in five key action areas: built environment, mobility, plastic packaging, fashion and food.

The built environment serves as the report’s first focal point for circular investment opportunities. EMF identifies renovating and upgrading buildings and increasing reuse and recycling infrastructure as key solutions to issues such as the affordability and adaptability of housing and the industry’s consumption of virgin resources.

In terms of the transport sector investing in mobility infrastructure – for cycling, public transport and car-sharing – offer an enormous opportunity to achieve change, with these options having the potential to significantly improve the health of citizens in cities across the world.

Car parts refurbishing, remanufacturing and recycling infrastructure is also underlined as a key investment opportunity for policymakers, which the authors suggest should be looked at in parallel with the creation of markets for end-of-life parts.

The report identifies the potential for improvement in policies governing plastic packaging, by encouraging innovative reuse business models for plastic packaging and plastic collection, sorting and recycling infrastructure,

There are substantial economic and environmental benefits of investing in these particular areas. These include reducing growth in plastic production and consumption by one-third by 2040, and creating up to 100 times more jobs in plastic manufacturing than jobs at landfill sites.

For the fashion industry, the report advocates for investment opportunities in business models that focus on renting and reselling clothes enabled by digital technologies, rather than making and selling. Investments of this kind are expected to reduce pressure on virgin resources and attract price and environmentally-conscious consumers, ultimately making the industry more resilient.

In terms of food, EMF argues for investment in food collection, redistribution and valorisation infrastructure to address the vulnerabilities of the current food system – which is estimated to threaten 265 million people around the world with food insecurity this year.

You can read the full report on The Ellen MacArthur Foundation website.