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CE Masterclass 5: Finance & Procurement

Closing the Loop 2013 Daan Dijk Rabobank

• How does the CE affect Financing ?

• How does it change procurement? • Example cases

The closer the economy approaches the scale of the Planet the more it will have to conform to the physical behavior mode of the Planet i.e become Circular

Our House

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The Changing Investment Climate

Days of abundant resources and falling prices are over

Future success will depend on: Efficient resource use ( raw materials, energy,

water) Preservation of biodiversity ( natural asset base) Circular Business models

This will affect capital allocation and equity pricing

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Circular business models please!

Old interpretation of the circular economy

Hard Nosed Sustainability metrics

Resource efficiency stress test integral part of risk assessment

• In 2007 Rabobank started to assess the Resource Footprint of its entire Loan and investment Book

• 2009 saw comparative resource productivity pilots with large corporates and F&A clients in NL and Brasil

• 2013 development of broader dashboard to monitor sustainable development of our clients

Corporate

Risk foto

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Example: Large Corporate

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Profitable business under BAU scenario

But high resource footprint and bill are a liability Growth investments always win in terms of ROI

New perspective: Balancing Growth and Resilience Structured approach to financing resource efficiency

Rabobank helped to balance Growth and Resilience

From Asset to Performance financing

What is better ? 1000 trucks with a 10 year life time 1000 trucks with a 20 year life time

7 Production as a maintenance cost

The Emerging Performance Economy: the trailer life cycle case

8 From take, make & waste to 2nd life and full reuse of materials

Future Business Models must adress…    

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Resource Scarcity Changing Legislation Consumer Values

Drivers: cost, licence to operate, brand protection, capital attraction

CE: Optimising Energy & Material Throughput

driver of corporate innovation and profitablity

Extracted Non-Renewable Resources Renewable Resources

Upcycling in the Waste Market

EU waste market 2700 MT – Only 40% is recycled

NL waste market 60Mton, – 84% (50MT) recycling, 8MT energy recovery &

composting, 2MT landfill

– Decoupling of GDP & waste volume (-2%)

Turnover 12-13 bn EUR/a, (EUR 200/ton)

– 55% in wholesale of secundary materials .

– 45% waste collection (EUR 2 bn), preparaton for recycling (EUR 1,5 bn) and waste treatment (EUR 2 bn).

11 Waste to Value strategy clearly pays off

Circular Economy Innovator

Water free and clean Dyeing of Textiles with Liquid CO2

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Cradle to Cradle Carpets Cradle

CEO  Stef  Kranendijk  :  ‘With  Cradle  to  Cradle,  DESSO  is  in  it  for  the  long  haul”.  

Treading new grounds

The Scelta case

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• From small family business to global

player in mushroom products

• Leader in cost reduction , innovation

and customer service

• Resource efficient : residues to

neutraceuticals and cosmetics

Scelta : From healthy snacks to neutraceuticals

Nijhuis Water: from Effluent to Nutrient

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• Global player in the Food-Water-Energy

nexus

• Waste Water treatment Projects

• Waste-to-Value projects

• Enabling aquafarming

• Industrial waste water , agri waste

water

(Agri-) Waste is a source of revenues

Food & Agri Industry

Chemical industry

Bioneering: the new innovation wave

Agri and Chemical sector co-operate in Food, Feed and Functionals

Brand management

17 PlantBottle collaborative Coca Cola, Ford, Heinz, P&G, Nike

“Over  the  long  term,  we  beleive the cost of material made from plants is more stable than the cost of petroleum”

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$700 bn Resource efficiency Benefits in 2030 ( Mc Kinsey 2012) Local energy production initiatives EV to Grid and to Homes

Smart City Planning

Rotterdam wilhelminapier

More and more Communities are taking energy production into their own hands

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The future is in our hands

A renewable energy and material resource base for the

economy

Transition to a Circular economy

Co-operation in the value chain

Resources are finite, Human ingenuity and solar energy are infinite