IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/113466.html
   My bibliography  Save this paper

The role of banks in the circular economy

Author

Listed:
  • Ozili, Peterson K
  • Opene, Francis

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.

Suggested Citation

  • Ozili, Peterson K & Opene, Francis, 2022. "The role of banks in the circular economy," MPRA Paper 113466, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:113466
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/113466/1/MPRA_paper_113466.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Walter R. Stahel, 2016. "The circular economy," Nature, Nature, vol. 531(7595), pages 435-438, March.
    2. Alfonso Aranda-Usón & Pilar Portillo-Tarragona & Luz María Marín-Vinuesa & Sabina Scarpellini, 2019. "Financial Resources for the Circular Economy: A Perspective from Businesses," Sustainability, MDPI, vol. 11(3), pages 1-23, February.
    3. Mark Anthony Camilleri, 2020. "European environment policy for the circular economy: Implications for business and industry stakeholders," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(6), pages 1804-1812, November.
    4. Kirchherr, Julian & Reike, Denise & Hekkert, Marko, 2017. "Conceptualizing the circular economy: An analysis of 114 definitions," Resources, Conservation & Recycling, Elsevier, vol. 127(C), pages 221-232.
    5. Paul Dewick & Magnus Bengtsson & Maurie J. Cohen & Joseph Sarkis & Patrick Schröder, 2020. "Circular economy finance: Clear winner or risky proposition?," Journal of Industrial Ecology, Yale University, vol. 24(6), pages 1192-1200, December.
    6. Willi Haas & Fridolin Krausmann & Dominik Wiedenhofer & Markus Heinz, 2015. "How Circular is the Global Economy?: An Assessment of Material Flows, Waste Production, and Recycling in the European Union and the World in 2005," Journal of Industrial Ecology, Yale University, vol. 19(5), pages 765-777, October.
    7. Alan Murray & Keith Skene & Kathryn Haynes, 2017. "The Circular Economy: An Interdisciplinary Exploration of the Concept and Application in a Global Context," Journal of Business Ethics, Springer, vol. 140(3), pages 369-380, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Beatriz de Souza Mello Gonçalves & Flávio Leonel de Carvalho & Paula de Camargo Fiorini, 2022. "Circular Economy and Financial Aspects: A Systematic Review of the Literature," Sustainability, MDPI, vol. 14(5), pages 1-41, March.
    2. Concepción Garcés-Ayerbe & Pilar Rivera-Torres & Inés Suárez-Perales & Dante I. Leyva-de la Hiz, 2019. "Is It Possible to Change from a Linear to a Circular Economy? An Overview of Opportunities and Barriers for European Small and Medium-Sized Enterprise Companies," IJERPH, MDPI, vol. 16(5), pages 1-15, March.
    3. Chembessi Chedrak & Gohoungodji Paulin & Juste Rajaonson, 2023. "“A fine wine, better with age”: Circular economy historical roots and influential publications: A bibliometric analysis using Reference Publication Year Spectroscopy (RPYS)," Journal of Industrial Ecology, Yale University, vol. 27(6), pages 1593-1612, December.
    4. Georgios Lanaras-Mamounis & Anastasios Kipritsis & Thomas A. Tsalis & Konstantinos Ι. Vatalis & Ioannis E. Nikolaou, 2022. "A Framework for Assessing the Contribution of Firms to Circular Economy: a Triple-Level Approach," Circular Economy and Sustainability,, Springer.
    5. Patrick Grüning & Justina Banionienė & Lina Dagilienė & Michael Donadelli & Marcus Jüppner & Renatas Kizys & Kai Lessmann, 2021. "The Quadrilemma of a Small Open Circular Economy Through a Prism of the 9R Strategies," Bank of Lithuania Working Paper Series 96, Bank of Lithuania.
    6. Ewa Mazur-Wierzbicka, 2021. "Towards Circular Economy—A Comparative Analysis of the Countries of the European Union," Resources, MDPI, vol. 10(5), pages 1-25, May.
    7. Peterson K. Ozili, 2022. "Circular Economy and Central Bank Digital Currency," Circular Economy and Sustainability,, Springer.
    8. Millar, Neal & McLaughlin, Eoin & Börger, Tobias, 2019. "The Circular Economy: Swings and Roundabouts?," Ecological Economics, Elsevier, vol. 158(C), pages 11-19.
    9. Philip Krummeck & Yagmur Damla Dokur & Daniel Braun & Steffen Kiemel & Robert Miehe, 2022. "Designing Component Interfaces for the Circular Economy—A Case Study for Product-As-A-Service Business Models in the Automotive Industry," Sustainability, MDPI, vol. 14(21), pages 1-17, October.
    10. Andreea Loredana Bîrgovan & Elena Simina Lakatos & Andrea Szilagyi & Lucian Ionel Cioca & Roxana Lavinia Pacurariu & George Ciobanu & Elena Cristina Rada, 2022. "How Should We Measure? A Review of Circular Cities Indicators," IJERPH, MDPI, vol. 19(9), pages 1-16, April.
    11. Gilbert Silvius & Aydan Ismayilova & Vicente Sales-Vivó & Micol Costi, 2021. "Exploring Barriers for Circularity in the EU Furniture Industry," Sustainability, MDPI, vol. 13(19), pages 1-25, October.
    12. Lucas Becerra & Sebastián Carenzo & Paula Juarez, 2020. "When Circular Economy Meets Inclusive Development. Insights from Urban Recycling and Rural Water Access in Argentina," Sustainability, MDPI, vol. 12(23), pages 1-21, November.
    13. Ozili, Peterson K, 2022. "Circular economy and central bank digital currency," MPRA Paper 113469, University Library of Munich, Germany.
    14. Hervé Corvellec & Alison F. Stowell & Nils Johansson, 2022. "Critiques of the circular economy," Journal of Industrial Ecology, Yale University, vol. 26(2), pages 421-432, April.
    15. Sabina Scarpellini, 2022. "Social impacts of a circular business model: An approach from a sustainability accounting and reporting perspective," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(3), pages 646-656, May.
    16. Robert H. W. Boyer & Ann‐Charlotte Mellquist & Mats Williander & Sara Fallahi & Thomas Nyström & Marcus Linder & Peter Algurén & Emanuela Vanacore & Agnieszka D. Hunka & Emma Rex & Katherine A. Whalen, 2021. "Three‐dimensional product circularity," Journal of Industrial Ecology, Yale University, vol. 25(4), pages 824-833, August.
    17. Iordanis Eleftheriadis & Evgenia Anagnostopoulou, 2024. "Developing a Tool for Calculating the Carbon Footprint in SMEs," Sustainability, MDPI, vol. 16(5), pages 1-23, February.
    18. Luca Marrucci & Fabio Iannone & Tiberio Daddi & Fabio Iraldo, 2022. "Antecedents of absorptive capacity in the development of circular economy business models of small and medium enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 532-544, January.
    19. Anna Manuella Melo Nunes & Luiz Moreira Coelho Junior & Raphael Abrahão & Edvaldo Pereira Santos Júnior & Flávio José Simioni & Paulo Rotella Junior & Luiz Célio Souza Rocha, 2023. "Public Policies for Renewable Energy: A Review of the Perspectives for a Circular Economy," Energies, MDPI, vol. 16(1), pages 1-28, January.
    20. Cindy Isenhour & Michael Haedicke & Brieanne Berry & Jean MacRae & Travis Blackmer & Skyler Horton, 2022. "Toxicants, entanglement, and mitigation in New England’s emerging circular economy for food waste," Journal of Environmental Studies and Sciences, Springer;Association of Environmental Studies and Sciences, vol. 12(2), pages 341-353, June.

    More about this item

    Keywords

    banks; circular economy; environment; waste; resources; financial institutions; climate change; sustainable development;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:113466. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.