Rabobank brings the circular economy to life
'Circular entrepreneurship' may appear to be just another buzzword, but Rabobank is turning it into a reality. In January 2016 the bank unveiled two new partnership initiatives: one on a global scale and the other in the Netherlands. Rabobank subsidiary DLL is also earning international recognition of its own for its circular activities.
The circular economy – what is it all about?
A wide-ranging term that extends into many areas of the economy, circular entrepreneurship is about reusing and improving the use of products and materials throughout the economy. Raw and other materials are used for a different purpose each time, being given second and sometimes even third lives. This is a turnaround from traditional production processes and ownership, in which goods are discarded and inevitably end up in a waste dump. Some examples of circular entrepreneurship:
- The use of leftover tomato skins in the production of car dashboards
- Workwear that can be recycled an infinite number of times
- Class 2 vegetables that can still serve as food for consumers
- Businesses that pay for the use but not the ownership of lighting systems
What does the circular initiative involve on a global scale?
Rabobank joined 30 other leading organisations in Davos, Switzerland on 21 January 2016 to launch a new initiative to help reduce global food waste by 50% by 2030. Known as ‘Champions 12.3’, the initiative is named after paragraph 12.3 of the United Nations Sustainable Development Agenda, which addresses the issue of food waste. One-third of all food is wasted worldwide each year, adding up to 940 billion US dollars. The production of this wasted food also accounts for 8 percent of global greenhouse emissions. Reducing food waste and reusing food residues is just one practical example of circular entrepreneurship. The 30 major companies, ministers, farming organisations, scientists and social groups behind the initiative will lead the way by demonstrating how they intend to reduce food waste and will encourage others to follow suit. Reducing food waste also happens to be one of the priorities of Rabobank’s Banking for Food agenda, and analysts in its Food & Agribusiness Research department are working to identify potential solutions to the issue. In Africa and other non-Western regions, Rabobank is involved in investing in more effective logistics and storage of agricultural products. Rabobank is launching several initiatives in the Netherlands to make businesses and consumers more aware of food waste, as well as supporting a number of businesses that contribute to reducing food waste, including De Verspillingsfabriek ('The Waste Factory'), based in the Dutch town of Veghel.
What does the Dutch initiative involve?
On 21 January 2016, at a meeting of MVO Nederland (an organisation dedicated to promoting sustainable business in the Netherlands), Rabobank and ABN Amro and ING Bank announced a new initiative designed to facilitate the transition to a circular economy. The three major Dutch banks believe the development of a circular economy is essential for the Netherlands, as this will make businesses less dependent on raw materials and cause them to produce less waste. ABN Amro, ING Bank and Rabobank plan to accelerate the transition to a circular economy by combining insights into circular business models with knowledge of financial products and risk management. As part of the new joint initiative, they will be working with customers, knowledge institutes and the central government. Rabobank has been involved in similar initiatives for some time: as part of the national Circular Economy Challenge in 2014 and 2015, Rabobank and its subsidiary DLL supported nine businesses in converting their idea into a circular business model. Several dozen businesses will this year be involved in regional CE Challenges to turn their circular business models into a reality. CEO Wiebe Draijer: 'In signing this agreement, we are not just paying lip service, we are really going to make this happen.'
DLL: proud recipient of a circular award
DLL, the Rabobank division that specialises in the leasing of vehicles, agricultural equipment, construction equipment and office technology, has been named the winner of the 'Alliance Trust Award for Circular Economy Investor'. DLL received the award on 19 January 2016 at the annual Global Economic Forum in Davos, Switzerland. Organised by the Forum’s Young Global Leaders in conjunction with management consulting services company Accenture, this award is presented to investment companies that provide financial support to help build the circular economy. DLL promotes circular business models by offering its customers the opportunity to lease, rather than own, various types of business assets. DLL is also encouraging its customers to extend the economic life of these assets by altering or repairing them in order to give them a second life. These items accounted for 1 percent of the entire DLL portfolio in 2013, 3 percent in 2015, and by 2020 the rate will have increased to 20 percent. DLL CEO Bill Stephenson: 'This award is a valuable incentive for us to continue our efforts to contribute to the circular economy and, in doing so, create value for our partners, the environment and our company.'