Intesa Sanpaolo releases a Position Paper on the Circular Economy
The circular economy is no longer a niche environmental concern. It is increasingly understood as a systemic industrial paradigm: a structural response to the limits of the linear “take, make, dispose” model that has long underpinned the global economy. Rather than managing waste at the end of the line, it rethinks how materials are designed, used and kept in productive circulation, so that value is retained instead of lost.
Why circularity matters now
Its relevance is rising for concrete reasons. It strengthens the resilience of supply chains and reduces exposure to volatile markets for critical raw materials; it tackles the substantial share of greenhouse gas emissions related to the production and use of materials that the energy transition alone cannot abate; and it opens fresh avenues for development, innovation and high-quality investment, while generating social value through new skills, the regeneration of territories and skilled employment.
Intesa Sanpaolo’s Position Paper
It is against this backdrop that Intesa Sanpaolo has published a new Position Paper on the Circular Economy, setting out why circularity has become a strategic lever for competitiveness, resource security and resilience, and what role finance must play in scaling it. The paper identifies the circular economy as one of the principal drivers of economic and industrial transformation, arriving at a moment when successive crises, from supply-chain disruption to energy insecurity, have exposed the fragility of the linear model.
Three themes that stand out
Three themes stand out. First, the paper reframes the climate debate around materials: drawing on analysis by the Ellen MacArthur Foundation, it notes that renewable energy and efficiency can address roughly 55% of global emissions, while the remaining 45% are embedded in how goods are produced, consumed and disposed of, a share only circular strategies can tackle. Second, circularity emerges as a risk-management strategy. The paper points to evidence that circular companies carry measurably lower credit risk, including research it has supported with Bocconi University, and Italian data indicating a 28% lower average probability of default among circular businesses. Third, the transition is underfunded: citing the Circularity Gap Report, the paper observes that between 2018 and 2023 circular investment averaged just $27 billion a year, around 2% of tracked capital, even as global circularity fell from 9.1% of materials cycled back in 2018 to 6.9% in 2024. Closing the gap between opportunity and capital is the paper’s central concern.
Strong resonance in Australia
These themes resonate strongly in Australia, where the circular economy has moved firmly onto the institutional agenda. Australia’s Circular Economy Framework, released in December 2024, commits to doubling the country’s circularity by 2035, with targets to reduce per-capita material footprint by 10%, lift material productivity by 30% and safely recover 80% of resources. For an economy that carries the highest material footprint in the G20, at roughly 31 tonnes per capita, and a circularity rate below 5%, the potential is significant: CSIRO modelling estimates the transition could add around $26 billion a year to GDP by 2035 while cutting emissions by 14%. The Framework’s own priority sectors, namely industry, the built environment, agri-food and resources, map closely onto the levers the Position Paper identifies.
A decade of commitment
Intesa Sanpaolo has backed this agenda for over a decade. Circularity has been a strategic priority since 2014, the Group became the first financial-sector Strategic Partner of the Ellen MacArthur Foundation since 2016, and it has delivered €23.6 billion in dedicated circular-economy financing since 2018, with a target of directing 30% of new medium and long-term lending toward sustainable activity under its 2026 to 2029 Business Plan. Much of that work runs through Intesa Sanpaolo Innovation Center and its Circular Economy Lab, which scout and scale up start-ups and conduct applied research with leading universities.
The opportunity lies in convergence
Looking ahead, the opportunity lies in convergence. With the EU’s Circular Economy Act expected in 2026 and Australia’s Circular Economy Framework already in motion, two major trading partners are aligning their policy ambition at the same moment, reducing barriers to cross-border circular trade and investment, in critical minerals, construction and agri-food especially. For Australian and Italian businesses alike, the Position Paper is both a signal and an invitation: to build, together, the material advantage the next economy will reward.
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