The Guidance on Resource Efficiency and Circular Economy Target Setting is a comprehensive, step-by-step guide for banks interested in increasing the sustainable use of resources such as energy, waste, water and raw materials and building a circular economy, where waste and pollution are eliminated, products and materials are kept in use at their highest value and natural systems are regenerated. The Guidance takes a practical approach, and includes a unique process for banks to define baseline and set targets in alignment with the Principles for Responsible Banking’s framework. The transition to a resource efficient and circular economy is a journey, hence the Guidance takes a progressive approach, to describe how to get started and in what direction to progress. An illustrative example is provided alongside real-life examples drawn from signatory banks’ experience.
Banks are also invited to read the accompanying ‘Getting Started Guidance’ – a shorter piece for those just starting their journey.
Our current linear economy is based on a take-make-waste model which relies on resource extraction and depletes natural capital. Such practices severely worsen the global challenges of climate change, biodiversity loss and pollution, and resource use is estimated to more than double by 2050.  A circular economy would significantly reduce emissions on the path to net zero, however according to a recent report, the global economy is currently only 8.6% circular.  Therefore, a transition to a circular economy plays a vital role in achieving the UN Sustainable Development Goals and the Paris Climate Agreement.
Resource efficiency was identified by signatory banks as one of the most significant impact areas in the 2021 Collective Progress Report of the Principles for Responsible Banking. Building on the Financing Circularity: Demystifying Finance for Circular Economies report published in October 2020, this Guidance is specially designed for PRB signatory banks who have identified resource efficiency or any closely related impact area as a significant impact area. In addition, it is also beneficial to any banks who are working on climate and / or biodiversity targets, as building a circular economy can significantly contribute to achieving these targets.