Five major banks located and operating within the European Union (EU) have agreed to work with the European Investment Bank (EIB) on a €10bn initiative to promote circular economy projects.
The Joint Initiative on Circular Economy (JICE) will take place over the next five years and will be overseen by the EIB.
In addition, five major national banks Bank Gospodarstwa Krajowego (Poland), Groupe Caisse des Dépôts (France) Cassa Depositi e Prestiti (Italy), Instituto de Crédito Oficial (Spain) and Kreditanstalt für Wiederaufbau (KfW – Germany) will also partake in JICE.
EIB’s president Dr. Werner Hoyer said: “Fighting global warming and environmental crises is the most urgent challenge of our time. Strengthening the circular economy is one of the most powerful tools in our arsenal. It will not only help achieve the Paris Agreement targets but also bring huge benefits for the economy and society.
“With the Joint Initiative on circular economy, we are scaling up our ambition and joining forces with our peers to stem the tide of waste.”
JICE will provide loans and investment guarantees to projects that showcase best-practice circular economy principles. New finance structures for public and private infrastructure will also be developed. Investments will target all stages of the value chain as well as all areas of a product or service’s lifecycle.
With BlackRock claiming that sustainable financing is going mainstream, the EIB has been quick to lend financial support for green products and portfolios.
Last year, the EIB issued a €500m (£448m) Sustainability Awareness Bond designed to boost capital market and private sector transparency for climate-related risks and opportunities. However, the bank has faced legal issues, after green campaigners argued its decision to loan €60m (£53m) to developers building a biomass facility in Spain.
The Group, which consists of the EIB and the European Investment Fund (EIF) has also halved its emissions intensity over the past decade. The finance firm’s emissions intensity per employee stood at 5.98 tco2e in 2017, marking a 49.9% decrease on 2007 levels. Despite an 11.9% year-on-year growth in employee numbers, the Group achieved a 2.8% reduction in its emissions intensity compared to 2016 levels.
The milestone puts EIB Group ahead of its 2020 target of reducing emissions intensity by 20-30% against a 2007 baseline, which was set in line with the European Commission’s target of reducing the European Union’s (EU) emissions by a fifth by 2020.