What the Middle East can learn from global circular economy trends
Rassem Zok, CEO of Standard Bank MENA
As governments across the globe scramble for ways to address the looming impact of climate change, the modern challenge is to ensure that the transition is economically viable.
According to consultancy firm Opimas, environmental, social, and governance (ESG) investments jumped to over $40 trillion in 2022, from $23 trillion in 2016. This strongly points to financial decision-makers gravitating to a more responsible deployment of capital.
There is a strong business case for investors, banks, and other financial services firms to tap into the promises of a circular economy. According to the UK-based Ellen Macarthur Foundation, a circular economy model could offer annual benefits amounting to $2.1 trillion in Europe alone. China could also greatly benefit from circular economy practices - up to $10 trillion in 2040.
Need to embrace sustainability
These projections are important in the ongoing conversation about balancing ESG commitments with value creation for corporates. The fight against climate change and environmental degradation could be lucrative, and this drives a strong impetus for governments and the private sector to build and rebuild their economies against sustainable practices.
In the UAE, the cabinet approved a circular economy policy which sets out a blueprint for the country's wider sustainability push.
The transition is happening - the more important question is how do we keep it going?
Challenge to keep the momentum
Governments and businesses will have to get unwavering support from financial actors to further stimulate the transition and ensure no one is left behind.
Inclusivity is key to this economic transformation, and in our experience at Standard Bank, we have seen a positive trend towards empowering the continent of Africa in achieving both its environmental and economic goals.
Moving forward, one of the most effective ways to promote the circular economy is by making it economically viable. The global transition will remain to be a delicate balancing act between economic prosperity and social and environmental responsibility. The key is to remember that both principles are not mutually exclusive.