The Inter-American Development Bank Group (IDB and IDB Invest), partnered with the United Nations Environment Programme (UNEP) through the Global Opportunities for Sustainable Development (GO4SDGs) and UNEP FI, released a new report that makes recommendations to policy makers and financial institutions on increasing public and private investment into the circular economy in the Latin America and the Caribbean (LAC) region. The study was co-funding from Germany (BMUV) and the European Commission.

The paper provides an overview of the current circular economy landscape in the region, and insights and recommendations on how it could catalyze financing for this transformative agenda going forward. At present, the circular finance ecosystem is still under development in LAC, with Chile taking the lead through its national development agency CORFO. The main actors of the LAC ecosystem are the multilateral development banks, the national development banks, commercial banks, and private equity companies. Several case studies are described in the report, including Algramo, Tobasa, Ecoins, EatCloud, Ciclo and Bebbia. Given the significant participation of Micro, Small, and Medium Enterprises (MSMEs) in LAC value chains, Governments must encourage strategies and policies that allow this type of companies to benefit from the shift to circularity. By adopting a circular business model, MSMEs can reduce costs, generate new sources of revenue, promote innovation, increase resource security, and mitigate environmental and social risks. Among the key messages are the urgent need to increase knowledge and cooperation on joint action to bridge the circular investment gap. This includes developing a common taxonomy, building institutional capacity, and knowledge development, as well as improving multistakeholder collaboration in the public and private finance ecosystem.