IGPN - International Green Purchasing Network

October 24, 2024

Circular Economy as an Enabler for Responsible Banking: Circular Solutions to Achieve Climate Targets in the Buildings and Construction Sector

The “Circular Economy as an Enabler for Responsible Banking” series of resources helps banks operationalise the interlinkages between the circular economy and climate, nature, pollution and healthy and inclusive economies. It provides actions for banks to move from setting sustainability targets to implementation, emphasising the integration of circular economy principles in their lending and investment decisions for high impact sectors.

The buildings and construction sector contributes significantly to global climate change, accounting for approximately 21 per cent of global GHG emissions and 37 per cent of global CO2 emissions, making the sector is key in addressing emissions reduction.[1] Circular solutions offer a viable pathway to reduce emissions across the whole life cycle of buildings.

A sectoral supplement to the climate-focused “Circular Solutions to Achieve Climate Targets”, this paper is designed to assist signatories to the Principles for Responsible Banking and net-zero committed financial institutions in integrating circular solutions in the buildings and construction sector as part of their climate transition plans to achieve net-zero emissions or climate mitigation targets, though a reduction of their financed emissions and through transition finance strategies. Further, it explores specific areas of action in internal policies and processes, client engagement, portfolio composition and financial flows, and advocacy and partnerships.

The climate-focused report and sectoral supplements follow the initial report “Leveraging the Nexus between Circularity and Sustainability”. This paper is aimed at setting the scene and providing a general overview on operationalising the interlinkages between circular economy and climate, nature, pollution, and healthy and inclusive economies.

Access the other sectoral supplement on the textile sector here.
These new resources set out practical guidance for signatories to the Principles for Responsible Banking to move from target-setting for sustainability objectives to delivering on their commitments. The Principles for Responsible Banking are a unique framework for ensuring that signatory banks’ strategy and practice align with the vision society has set out for its future in the Sustainable Development Goals and the Paris Climate Agreement.

Learn more at UNEP Finance Initiative webpage.

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