Work

Financing circularity strategies in critical raw materials supply chains: Toward a novel blended framework

Year: 2025

Type: article

Abstract: The transition to a circular economy (CE) has gained significant attention as a strategy to enhance sustainability across various industries. However, its application within critical raw materials (CRMs) supply chains—and its potential to mitigate upstream supply risks—remains relatively underexplored. In particular, there is a notable gap in understanding how CRMs-dependent businesses can access the financial resources needed to implement circularity strategies effectively. This study addresses that gap by synthesizing existing literature and proposing a blended funding framework specifically tailored to CRMs supply chains. To support this, we develop a self-diagnosis model that enables firms to align specific supply risk scenarios with suitable circular strategies and financing options. Through an analysis of three key stakeholder perspectives—CRMs-dependent businesses, private financial entities, and the public sector—we identify context-specific funding challenges, outline actionable pathways for improving access to finance and capital, and formulate a research agenda to strengthen the financial foundations of circular initiatives. Our findings offer both theoretical advancements and practical recommendations, emphasizing the need for collective action across sectors to achieve sustainable and financially viable CRMs supply chains.

Source: Resources Policy

DOI: 10.1016/j.resourpol.2025.105811

Authors: Kaiyu Xie, Marcos R. Machado, Laura Spierdijk, Devrim Murat Yazan

Institution: University of Twente

Language: English

Topic: Sustainable Supply Chain Management

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Responsible consumption and production, Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $3,810