Loughborough research into circular economy boosts UK’s commitment to net-zero

Finding funding for greener energy and industry is at the heart of this year’s COP27 summit in Egypt.

Wednesday (9) was Finance Day, where global leaders and experts discussed several aspects of the climate finance ecosystem.

Key to the goals of the conference was strengthening each nation’s commitment to align with the targets of the Paris Agreement. The UK has pledged to reach net-zero emissions by 2040.

Loughborough University is currently at the forefront of assisting the realization if that goal with research into the circular economy.

The University has pivotal roles in the Interdisciplinary Circular Economy Research Centre for Mineral-based Construction Materials and the Interdisciplinary Centre for Circular Chemical Economy – both part of a £32m Government project to reduce the carbon footprint of the UK industry.

Professor Andrew Vivian and Dr Suzana Grubnic co-lead a project on enabling capital investment into Circular Economy projects and are joined by Dr Longxiang Zhao, a Research Associate. The project has a focus on facilitating greener construction materials.

The UK is committed to moving towards a more circular economy with details provided in its circular economy package policy statement in 2020. This leads to various initiatives that would bring environmental, financial and social impacts.

For example, the government has issued its policy paper on mandatory digital waste tracking; the UKRI has invested £30 million into the National Interdisciplinary Circular Economy Research (NICER) programme to deliver research, innovation, and the evidence base to move the UK towards a resilient UK circular economy.

This year’s finance agenda at COP27 included discussions about the cost of moving towards global sustainable development and how funding can reliably be channeled to the places that need it the most.

“In the UK, one area constraining the transition to a circular economy is accessing sufficient capital investment. However, it is one which should be prioritized given the huge potential impact it can bring,” said Prof Vivian.

“While we are seeing growth globally, investment in circular projects only accounts for around 2% of total investment.”

UK annual investment in circular economy companies has tripled in volume from 2018 to 2021. Investors have deployed over £1.5bn in circular economy companies over the past four years, with £788m of disclosed investment in 2021. (BDO)

Venture capitalists currently account for 50% of UK circular economy investments. Industrials and manufacturing are the most prominent sectors for attracting circular economy investment, accounting for 37% of deal volumes in 2021. (BDO)

Technology is also a major area of interest, attracting 26% of circular investments in the UK. We hope to see further initiatives and policies to support investment into the circular economy. (BDO)

Dr Grubnic said: “The development of an accounting-sustainability tool that incorporates environmental information has the potential to unlock funds from external and internal sources.

“We are currently exploring how to embed different circular economy principles into a capital appraisal tool that helps minimize environmental degradation.”

Dr Zhao added: “This would help further stimulate much needed investment into circular economy projects, with increasing participation from mid-market investors.

“We also anticipate that circular business models, such as product as a service, will become increasingly attractive and targeted investment can support this.”

The Interdisciplinary Circular Economy Research Centre for Mineral-based Construction Materials is made up of 25 world-class investigators from engineering, natural sciences, social sciences and the humanities across five leading universities: UCL, Imperial College London and the universities of Leeds, Sheffield and Lancaster, as well as the British Geological Survey.

The Centre is also supported by a network of 42 industry partners from all sectors of the construction industry – clients, designers, contractors, suppliers, consultants – local and national government and NGOs and other academics.

The team is currently looking to engage with practitioners in the construction and investment industries to gain insights on the key factors and the key metrics used for internal and external investment decisions for circular economy initiatives.

Please contact Longxiang Zhao if you are interested in joining the discussions with the team.


Notes for editors

Press release reference number: 22/207

Loughborough is one of the country’s leading universities, with an international reputation for research that matters, excellence in teaching, strong links with industry, and unrivalled achievement in sport and its underpinning academic disciplines.

It has been awarded five stars in the independent QS Stars university rating scheme, named the best university in the world for sports-related subjects in the 2022 QS World University Rankings – the sixth year running – and University of the Year for Sport by The Times and Sunday Times University Guide 2022.

Loughborough is ranked 7th in The UK Complete University Guide 2023, 10th in the Guardian University League Table 2023 and 11th in the Times and Sunday Times Good University Guide 2023.

Loughborough is consistently ranked in the top twenty of UK universities in the Times Higher Education’s ‘table of tables’, and in the Research Excellence Framework (REF) 2021 over 90% of its research was rated as ‘world-leading’ or ‘internationally-excellent’. In recognition of its contribution to the sector, Loughborough has been awarded seven Queen's Anniversary Prizes.

The Loughborough University London campus is based on the Queen Elizabeth Olympic Park and offers postgraduate and executive-level education, as well as research and enterprise opportunities. It is home to influential thought leaders, pioneering researchers and creative innovators who provide students with the highest quality of teaching and the very latest in modern thinking.