Introduction to the Topic:
At the start of product value chains, there is immense resource extraction and harvesting. Throughout product value chains there are risks of scarcity, concerns about depletion, high energy consumption, waste and environmental degradation. These problems are created by our current linear economic model of extract-use-dispose. A circular economy aims to minimize waste and make the most of resources by creating closed-loop systems where products and materials are reused, repaired, refurbished, and recycled for as long as possible. Triodos Bank, a pioneer in sustainable banking, is committed to enabling and accelerating this transition. Our impact vision outlines a mission to foster a society that thrives within planetary boundaries by focusing on five interlinked transitions: energy, food, resources, societal, and wellbeing. Building on this, Triodos Bank’s vision paper on the resource transition outlines our approach to a broad circular economy transition – emphasizing a movement away from a linear production and consumption paradigm, towards a circular economy where resources are truly valued, used prudently along the whole value chain and where nature is conserved and regenerated.

Research Question:
A common barrier for companies working towards a circular economy is the lack of well-developed secondary markets for the restoration or reuse of secondary and alternative materials. This barrier not only limits the availability of recycled materials but also discourages investment in sustainable practices, as businesses struggle to find economically viable ways to reintroduce these materials into the production cycle.
Therefore, the central research question is: How can secondary markets be developed and leveraged to better support the transition towards a circular economy?

Challenge Details:
Participants could explore the role of secondary markets in pathways towards circular economies, with a focus on, inter alia, identifying pathways and designing strategies, financial mechanisms, investment portfolios and other innovations which banks can use to support the development of secondary markets. Specific aspects to consider include:

1. Pathways and Strategies – Investigate various pathways that can facilitate the development of secondary markets. This could involve analysing successful case studies, identifying key stakeholders, and understanding the regulatory landscape.
2. Financial Mechanisms – Explore innovative financial mechanisms that can incentivize companies to participate in secondary markets. This might include green bonds, impact investing, and other sustainable finance instruments.
3. Investment Portfolios – Designing investment portfolio structures that prioritize companies and projects contributing to the circular economy. Consider how banks can allocate capital to support businesses that are developing or utilizing secondary materials.
4. Innovations – Identify and propose other innovations that can drive the growth of secondary markets. This could involve technological advancements, new business models, or collaborative initiatives between different sectors.

Participants in the challenge can decide whether they want to create smaller projects focused on specific aspects of the larger issue or on particular target groups, such as small and medium-sized enterprises (SMEs) or specific industries.