This white paper published by Ellen MacArthur Foundation in collaboration with Bocconi University and Intesa Sanpaolo, sets out new evidence demonstrating how circular economy strategies can de-risk investments and drive superior risk-adjusted returns for investors and financial institutions. As a case study, Intesa Sanpaolo provides inspiration on how financial institutions can capture this circular economy opportunity. Bocconi University analysis of 200+ European, publicly listed companies across 14 industries shows that the higher the circularity of a company, the lower its risk of defaulting on debt, and the higher the risk-adjusted returns on its stock. The paper reveals how circular economy strategies can reduce investment risk by decoupling economic growth from resource consumption, diversifying business models, and allowing businesses to better anticipate stricter regulation and changing customer preferences. Embedding circular economy principles also reduces exposure to supply chain disruptions and volatility of resource prices.