You are here

The circular economy as a de-risking strategy and driver of superior risk-adjusted returns

The circular economy as a de-risking strategy and driver of superior risk-adjusted returns

The circular economy as a de-risking strategy and driver of superior risk-adjusted returns
Author: 
Bocconi University, Ellen MacArthur Foundation, Intesa Sanpaolo
Publication Date: 
August, 2021
Country: 
United Kingdom

Language for original content:

Bocconi University’s analysis of 200+ European, publicly listed companies across 14 industries shows that the higher the circularity of a company, the lower its risk of defaulting on debt, and the higher the risk-adjusted returns on its stock.

The paper reveals how circular economy strategies can reduce investment risk by decoupling economic growth from resource consumption, diversifying business models, and allowing businesses to better anticipate stricter regulation and changing customer preferences. Embedding circular economy principles also reduces exposure to supply chain disruptions and volatility of resource prices.