Circular Economy: Good for the Planet, Good for the Bottom Line: A Conversation with Lisa Da Silva

Material consumption and waste are climbing rapidly from rising global population and economic growth.? In the past two decades,?material consumption has risen by over 65?percent globally, topping the 100 billion metric tons mark in 2020.?? According to the United Nations . Food Waste Index Report, an estimated 19% of food worldwide in 2022 – or just over a billion tons – was wasted.? In the same year, the world generated 62 million tons of electronic waste – the volume that would fill 1.55 million 40-ton trucks.? That’s enough to form a bumper-to-bumper chain around the equator!?

These numbers make it clear that we cannot accelerate the #GreenTransition without changing the way we consume and dispose. That’s why the movement toward #CircularEconomy – which offers a more mindful approach to extraction and consumption – is gaining popularity.? We sat down with IFC - International Finance Corporation ’s circular economy expert Lisa Da Silva to learn more about circularity and the ways it can be integrated into the global economy.??

What is Circular Economy??

The circular economy works to transform conventional ways of production and consumption to avoid depleting natural resources and promote regeneration of natural ecosystems.? It minimizes the use of natural resources and maintains the value of products and materials for as long as possible, preventing and reducing waste. By transforming the prevalent linear economic system to one that is less resource intensive and extractive, the circular economy enables sustainable development, addressing the interconnected challenges of environmental pressures and fostering inclusive economic growth.?

How did circularity come to the forefront of the global agenda??

Recycling and reuse have been around for a long time but today, the circularity movement has a new urgency:???

• First, the linear model generates too much waste. To name just one example, we produce 350 million tons of plastic waste a year.? This is an equivalent of 10 million fully loaded garbage trucks!?

• Second, reductions in waste and pollution offer significant economic benefits, given that global costs of pollution amount to $4.6 trillion annually.? Circularity also brings recoverable resources back into the value chain. Take e-waste. We recycle less than one-quarter of e-waste we produce, leaving behind valuable resources that can help both the economy and the environment.?? If we want a successful and timely transition to #renewable energy we will need to increase recycling of precious metals, as mining alone won’t be able to meet the rising demand.??

• Third, consumers worldwide are increasingly asking for more recycled products and are willing to pay a premium for it.? In one UK survey, over half of respondents wanted retailers to focus on recycled products, and 20% were ready to boycott stores with unsustainable packaging.??

• And maybe the biggest driver is, we are finally becoming more aware of the negative health effects associated with waste – particularly plastic pollution. Tiny particles called microplastics have found their way into human bodies through the air we breathe and the food and water we consume. They are now found in breastmilk, kidneys, livers, testicles and placentas.? ?

• While little is currently known about the direct effect of plastic on human health, we know that the chemicals found in plastic are linked to disruptions to nervous, reproductive and other human systems.? One study estimated the global cost of plastic-related health effects at $100 billion a year. This is what drives the urgency of the global transition to circularity.??

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Can you share an example of how circular economy models may work in practice??

Examples of circularity are all around us, in different sectors from textiles to construction.? For example, textile manufacturers are turning toward regenerative agriculture to produce organic cotton and other natural fibers, which improves quality.? In the construction sector, companies are working to reduce the use of virgin materials or substituting carbon-intensive materials with alternatives like timber.? Electronic goods can be designed for easy recycling or refurbished to extend their life, packaging inputs can be minimized or become biodegradable, and animal waste can be used as natural fertilizer.??

Circularity cannot be limited to a single project, though.? It is a holistic approach that starts by designing products with fewer – or regenerative – inputs, changing production processes to minimize waste, extending the life of products through refill, reused, repair schemes, and then effective waste management process to collect, sort and recycle materials back into production.? Circularity aims to encompass the entire lifecycle of materials while most projects only touch a few parts of the value chain.? That’s why it’s so important for all stakeholders – users, producers, governments and civil society – to do their part.??

Are there certain sectors of the economy where circular approaches work best??

All industries can benefit from circularity, and some sectors present a particularly strong business case for it.? For instance, steel and glass are nearly 100% recyclable without any loss of quality. Textiles – which account for 5.2% of landfill materials today - are 95% recyclable. Various grades of plastics can also be recycled over and over again.? Packaging, electronics, automotive, agricultural and the built environment sectors offer great opportunities for circularity.? Even trains can be made to be recycled! What all these sectors share is a need for strong recycling infrastructure and smart policies to reach their full potential. Here are some examples of private sector companies in different sectors embracing circularity:?

• 达能 , a global leader in food and beverages, is actively incorporating circular economy principles across the entire lifecycle of its packaging materials. As of 2023, 84% of Danone’s packaging was reusable, recyclable or compostable.??

• Trenitalia , a leading provider of Italian railway services, commissioned all newly manufactured trains to be at least 95% recyclable (can easily be dismantled and materials can almost entirely be reused) as well as enable a 30% reduction in energy consumption.?

• Indorama Ventures Group (IVL), the world’s largest producer of recycled PET resin used in beverage bottles and an IFC client, has recycled more than 130 billion bottles since 2011.?

• 拉法基 , a global leader in innovative and sustainable building solutions, is working to build the world's first fully recycled concrete building – a sustainably built 220-init social housing complex outside of Paris, France.??

• Sanko Textile , a manufacturer of premium yarn and an IFC client, is building a recycling plant in Turkey with a capacity of 80,000 to 200,000 tons per year, converting textile waste into high-quality yarn.?

• S?o Martinho , a leading Brazilian company in sugar, ethanol and renewable energy and an IFC client, is using 99% of industrial waste generated during sugarcane processing as organic fertilizers, improving soil health and supporting regenerative agriculture.??

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Is there a business case for circularity or is this something primarily mandated by regulations??

The circular economy presents enormous opportunity for the private sector. Transitioning to a more circular approach could potentially unlock $4.5 trillion of GDP growth and additional economic output by 2030 globally. .?

Unlocking these opportunities, however, will require effort. While circular approaches like recycling are standard business practices in sectors such as aluminum and steel, they are more challenging in others, like plastic packaging. Currently, virgin plastic remains cheaper than recycled inputs, making it difficult for brands and companies to meet their recycling commitments. To address this, more countries are introducing Extended Producer Responsibility (EPR) regulations, which hold producers accountable for the end-of-life management of their products and encourage businesses to design more sustainable products. Integrating circular approaches will necessitate coordinated market and regulatory interventions to address both demand and supply levers and create the right incentives for private investment.?

What is the link between circular economy and climate change??

The circular economy is a powerful approach that can contribute to climate mitigation, biodiversity conservation, and blue economy objectives by reducing emissions, minimizing waste, and promoting sustainable resource use. By rethinking production and consumption patterns, circular strategies—such as recycling, regenerative agriculture, and material efficiency—have the potential to cut emissions from material production by 45% and reduce global CO?e by 9.3 billion tons annually (Ellen MacArthur Foundation).??

However, while circularity can drive significant environmental benefits, its effectiveness depends on how it is implemented. Not all circular initiatives inherently lead to positive climate or biodiversity outcomes; for instance, some recycling processes can be energy-intensive, and poorly managed resource loops may still contribute to ecosystem degradation. To fully realize its potential, the circular economy must be designed with clear environmental safeguards, ensuring that efforts to close material loops do not inadvertently shift burdens elsewhere or undermine sustainability goals.?

Can emerging markets benefit from circularity approaches??

If anything, the need for circularity is more acute in emerging markets.? First, the economies of emerging markets are disproportionately impacted by waste and pollution.? Developed economies send much of their waste to emerging markets for disposal or recycling, which creates environmental hazards and inhibits economic growth.? Marine pollution hurts developing economies that depend on tourism for revenue.? It is also eight times more expensive for a low- or middle-income country to deal with plastic pollution compared to a high-income country.?

Second, circular economy can benefit the bottom of the pyramid by providing formal work opportunities in areas like collection or recycling for many of the 15 million informal waste pickers around the world.?

We are seeing more and more emerging market countries take unilateral action to stop waste pollution and implement circular economy policies.? Following China’s ban on the import of waste in 2017, Thailand implemented a similar ban in January 2025 and other Asian countries are considering doing the same. It has also been encouraging to see more and more emerging markets countries implement EPR schemes that seek to protect and grow their economies in a sustainable manner.???

However, developing countries need finance to lean into circular economy.? For plastic alone, The Circulate Initiative estimates that between 2025 and 2040, approximately US$15.4 trillion in private sector investments and US$1.5 trillion in public expenditure are required to reduce annual mismanaged plastic volumes by 90% relative to 2019 levels.??

How much investment is going into circularity today? How can it be scaled up??

Even though the circular economy is becoming more widely recognized, external commitments and targets aren't yet producing significant impacts. According to the Circularity Gap Report 2024, over the past five years, the majority of materials entering the economy are still virgin, with the share of recycled materials dropping from 9.1% in 2018 to 7.2% in 2023.?

Circular economy investments are often small scale and require aggregation models to unlock financing. Between 2018 and 2023, global investments in plastics circularity averaged $32 billion annually, totaling US$190 billion over the six-year period. Of those investments, over half the transactions were below one million dollars implying venture capital and financial institutions will play an important role in channeling financing into the circular economy.?

Many financial institutions are unaware of opportunities present in financing circularity. A United Nations Environment Programme Finance Initiative (UNEP FI) survey of financial institutions revealed that around 80 percent of respondents lack awareness of the potential scale of financing opportunities in the circular economy, and none of the respondents see the circular economy currently being integrated in pricing of financial products and services.?

What is IFC doing in this space??

IFC works to accelerate the transition to circular business models that maximize product use, retain value along the production and consumption chains and recycle products back into value chains; this includes much needed waste management solutions. We are investing in circularity across all geographies and across a variety of materials, including plastics, textiles, building materials, e-waste, glass, and metals.? To date, IFC has invested over a billion in private sector projects that contribute to a circular economy. These investments have supported improvements in waste management in #Brazil and #Croatia, reductions in marine pollution across Southeast Asia, and increased use of recycled materials in Africa.?

What excites you about this space??

Working in the circular economy brings together everything I’ve learned throughout my career. Encouraging financial institutions to back energy efficiency programs showed me just how big the opportunity is in sustainable business. Later, diving into climate and blended finance across different sectors really opened my eyes to why we need to rethink our traditional economic models. And more recently, working with cities gave me a firsthand look at the challenges they face—like water pollution and waste management—and also how much power they have to spark real change through policies and creating an enabling environment. ??

The circular economy is an exciting space to be working in right now. More businesses are realizing the urgency of circularity, but there’s still a long way to go in unlocking its full potential for investment. It’s not just about making companies more efficient or creating jobs—it’s a game-changer for tackling some of the biggest environmental challenges we face today. The opportunity is huge, and while there’s still so much work ahead, I’m both excited and humbled to be contributing in whatever way I can.?

Learn More about IFC’s Work in Circularity?

IFC’s Work in Waste Management and Circularity?

IFC Circularity Plus?

Trash to Cash?

Financing the Plastics Transition: COP29??

IFC’s Investment Helps Sunda Group Expand the Use of Recycled Inputs?

IFC’s Sustainability Linked Loan to Orizon to Boost Development of Brazil’s Waste Sector?

IFC Promotes Circular Economy in Poland?