PRI: investors should incorporate circular economy transitions in net-zero strategies

Research from the Principles for Responsible Investment (PRI), the UN-backed financial sector collective, has argued that circular economy transitions are highly relevant to sustainable investment strategies. According to the paper, the core principles of a circular economy, such as waste reduction and biodiversity preservation, impact a wide range of industries with expansive emissions footprints. According to PRI, for firms in these industries, circular economy initiatives translate into increased cost efficiency and consequently profitability. In addition, the PRI paper argues that circular economy models are key to ensuring raw material availability in key transition industries. The paper frames circularity as a critical net-zero component: “Transitioning to a circular economy is among the steps needed to comply with the International Energy Agency’s Net Zero by 2050 framework.”