Linear Risks

Managing risk is a fundamental aspect of the investment process for financiers, essential for stability and long-term growth. However, many companies operating under the linear economic model and the financial institutions investing in them overlook the 'Linear Risks' associated with this approach, such as reliance on scarce resources, prioritization of virgin products, lack of collaboration and innovation, which can negatively impact the organization's sustainability.

This essay aims to raise awareness of these risks and proposes the 'Linear Risks' Matrix as a framework for investors and businesses to identify their exposure to linear economic practices. The authors encourage collaboration within the financial and business community to further research and refine the concept of 'Linear Risks,' develop risk assessment tools, and scenario-based models to quantify and mitigate risks through circular economy strategies.