A shift towards circular economies could generate up to $4.5 trillion in annual economic output by 2030, according to a new report by the United Nations Environment Programme.
The transition to a circular economy could also help realise sustainable development goals to ensure the health of ecosystems, the report said.
A circular economy is an economic approach designed to ensure consumption and production patterns make efficient use of resources and minimise waste, pollution and carbon emissions.
"The economic recovery from the Covid-19 pandemic is an opportunity to stimulate the urgent transition to more sustainable consumption and production,” said UNEP executive director Inger Andersen.
"We need both the private and public sectors to transform our economies to address climate change, reduce pollution and improve resource efficiency,” she added.
The financial sector, and policymakers in particular, have to play a “central role” in shifting from linear, wasteful growth to embedding circularity in finance.
Several European economies in particular have prioritised green initiatives when steering economic policy in their countries.
Christine Lagarde, the president of the European Central Bank, had stressed the importance of exporting "every avenue” possible to address climate change in her address in July.
The growth of circular business models will require “structural and technological change” including innovation in design and manufacturing of products and services, reducing inputs to agriculture, lowering food waste and using digital technology to increase transparency and sustainability in supply chain