The free CEvaluator tool, developed by the research centre VITO, Econocom and the Foundation for Future Generations, is intended for companies and governments as well as lenders. It helps companies prepare optimally for their financing request and immediately provides criteria that lenders can use to make the most objective credit decision possible in circular investment dossiers.
More and more companies are resolutely embracing the circular economy. One of the levers is financing. However, investors are often unable to properly assess the potential of circular projects, and companies’ credit files are not well documented, which makes them reluctant to invest in their circular projects.
As part of the Circular Impact Investing project, funded by Circular Flanders, the CEvaluator was developed. This tool facilitates the assessment of circularity in investment dossiers, thereby increasing the effectiveness of investments in the circular transition.
Hilde Janssens, Marketing & Communications Director Econocom Belux:“The availability of finance is often a ‘deal breaker’ in the transition to the circular economy. This tool can be a lever to accelerate and scale up circular investments. The standardisation and consistency of the methodology for analysing circular finance cases provides absolute added value.”
Circularity turned into investment criteria
This tool meets an important need. Flanders Circular has found that there is interest in circular dossiers, but that many let the cat out of the bag. The tool provides handles for turning circularity into investment criteria. If credit decisions are better justified, confidence can grow and the transition to circularity gets an immediate boost.
Anse Smeets, VITO project manager: “In our guiding programmes for start-ups and established companies with circular ambitions, the question of financing always comes up. The CEvaluator tool provides a firm foothold where many are entering unknown territory in their search for funding. This is because it not only focuses on circularity performance, but also identifies the specific opportunities and risks faced by circular business cases.”
The financial aspect of circularity, focused for each actor
A number of tools already exist, but experience shows that while these tools measure circularity in a business context, the financial aspect is rarely addressed in these tools. The CEvaluator does this and not only provides objective criteria, but also interprets them. It not only points out opportunities, but also where the risks lie. This makes it particularly suitable for all sources of finance: banks, funds, grant providers and leasing companies can all use it. But also companies and public authorities in the preparation phase of a capital round or funding application can use the CEvaluator to better prepare themselves. It gives them the tools they need to substantiate their idea, develop their business plan and prepare their loan application. This increases their chances of success.
Benoit Derenne, Director, Foundation for Future Generations: “The emergence of a model for a sustainable society, based on a ‘360°’ integration of ‘Planet’, ‘People’, ‘Prosperity’ and ‘Participation’ aspects, will be facilitated by the convergence towards common methodologies to assess impact and, in particular, to steer investment decisions towards better impact”.
VITO is a Flemish research organisation and sustainable innovation driver that aims to accelerate the transition to a circular economy, including through action-based research with and for circular entrepreneurs. VITO has taken on the role of coordinator, knowledge integrator and facilitator.
Econocom is a Belgian listed company with many years of practical experience in tailor-made financing solutions. Econocom’s mission is to share knowledge and accelerate innovation, giving both start-ups and established companies a better chance of success, especially in implementing new revenue models, product-service combinations and as-a-service business models.
Stichting voor Toekomst Generaties
This is an independent foundation that focuses on the transition to a sustainable development model. As a platform for transformative philanthropy, the Foundation enables its partners and donors to invest in future generations. Each year, the Foundation’s SE’nSE Fund provides seed funding to promising start-ups with high (potential) positive environmental impact and sustainable operations. The Foundation works with an extensive national network of both impact investors and innovative green entrepreneurs and has involved its network in the validation of the pre-defined criteria.
This article first appeared (in Dutch) on Vito News – March 3, 2021.
Image credit: VITO