The circular economy represents a major enabler of the sustainability transitions, providing long-term solutions to climate change and resource depletion through efficient raw material utilisation, better product longevity and/or elimination of unnecessary waste.
Circularity European Growth Fund II, initiated and managed by Circularity Capital, has selected five circular investment themes, which it regards as the most attractive segments with respect to growth opportunities alongside impact potential. These themes include:
- product from waste: upcycling waste material flows into higher value products and materials;
- product to product: extending asset life or enabling multiple use cycles through maintenance, repair, refurbishment and/or remanufacture;
- product as a service: using PaaS or innovative lease/ hire models to enhance asset productivity and deliver superior customer solutions;
- circular design: optimising the redesign of a product’s lifecycle to enable recycling, refurbishment, maintenance, reuse, or biological restoration, and
- enabling solutions: using data and software to drive resource productivity, including extending asset life, enabling multiple use-cycles, and reducing waste (materials and/ or energy).
An example in the fund’s portfolio is Lendis, a global leader in subscription-based circular office solutions. The company supplies modular furniture and electronic devices through proprietary in-house workplace management software, enabling customers to take responsibility for their workforce’s equipment – both at the office and remotely. Lendis enables the use of equipment across multiple lifecycles, which prolongs its useful life and displaces the manufacturing of new products.
Fund Manager Willy Bulsink: “Circular Economy is a relatively new segment for the private debt and equity funds at Triodos Investment Management but has much potential. This investment enables us to build up inhouse experience on circular business models and trends, and to further diversify the Triodos Groenfonds portfolio.”