UK’s circular economy received a cool £1.3 billion investments!

Maven Capital Partners suggests that investors are drawn to business models that offer some protection against short-term market ups and downs. Circular companies tend to be more resilient and less affected by big economic events, like the disruptions caused by the Covid-19 pandemic and higher oil prices, which have affected global trade routes.

Additionally, circular business models are environmentally friendly because they generate fewer emissions and use fewer raw materials throughout their supply chains. This not only helps the planet but also cuts down on the costs of getting and getting rid of resources.

Customers are increasingly looking for companies that follow circular practices, and there are also regulations pushing industries in this direction. LDC, which is part of Lloyds Banking Group, says that businesses embracing circular principles are more likely to end up in investment funds focused on sustainability (SFDR Article 8 or Article 9 funds). As more money goes into these “greener” funds, it could make circular businesses even more valuable.

“Circularity is essential to the ESG transition, responding to shifts in consumer and regulatory demand. This trend is only going one way, and those companies with robust circular business models are disruptors in the market, providing attractive investment propositions given their innovative strategies to reduce, reuse and recycle resources, whilst achieving their commercial objectives,” said Martin McLaren, partner at Maven Capital Partners. “Recent global events have reminded us of the benefits of a resilient supply chain – something which circular business models have in abundance – meaning they will often benefit from both a competitive advantage in the market, and a premium valuation.”