BASE develops system to identify circular investment opportunities
21 December 2022 09:34
The Basel Agency for Sustainable Energy (BASE) has been contracted by the Inter-American Development Bank (IDB) and IDB Invest to develop a circular economy categorization and its application to potential investment projects. The system will support the Colombian banks of Bancóldex, Banco de Bogotá and Bancolombia in identifying financing opportunities that meet circular transition objectives, as was reported in a project information.
BASE will accompany each of these three banks in the implementation of this categorization in a pilot project. External reviewers like the Colombian Asobancaria, the United Nations Environment Program – Finance Initiative (UNEP FI) and the Ellen MacArthur Foundation will ensure that the work can be of use more broadly for the whole Colombian banking sector and that it is aligned with the vision of the Latin America and Caribbean Circular Economy Coalition.
A common classification system is needed because existing guidelines and methodologies that define and apply the circular economy thinking model in a uniform and standardized way are thus far limited.
According to the website, “the shift to circular economy thinking as the guiding force for business development in the next 30 years is imperative for reconciling economic growth with environmental sustainability”. The financial sector has a key role to play, since it can accelerate investment in “productive value chains” that are required to “drive the gradual implementation of circular innovations”.