HOOP Project Introduces Groundbreaking Due Diligence Standard for Urban Circular BioEconomy Projects

The HOOP project aims to boost bio-based investments and foster local bioeconomies in Europe through a comprehensive approach. It provides project development assistance (PDA) to eight Lighthouse Cities and Regions, helping them acquire the necessary expertise in technical, economic, financial, and legal aspects to develop investments in utilizing biowaste and wastewater sludge for safe and sustainable bio-based products The PDA focuses on a variety of projects within the cities and regions with different investment volumes planned that are expected to be complemented by public and private investments. In this context, the Due Diligence standard procedure has been developed to be applied to Urban Circular BioEconomy (UCBE) projects with a high impact for investors and project developers. 

Due diligence is a process that involves risk and compliance checks, conducting an investigation, review, or audit to verify facts and information about a particular subject. In simple words, due diligence means doing your homework and acquiring required knowledge before entering into any agreement, implementation of a project or contract with other enterprises/parties. Hence, due diligence is an important business technique to consider before making any key business decisions (e.g., implementation or financing a new project). Yet, until now, no standardized due diligence process has existed for UCBE projects. Most due diligence endeavors in this realm have remained confidential, conducted by large corporations, banks, investors, and consultants. 

Addressing this gap, the HOOP project has devoted significant resources to standardizing the due diligence process, laying down a framework that offers transparency and reliability. The resulting Due Diligence Standard, characterized as ongoing, multidisciplinary, and proactive, ensures that project parties can navigate various risk areas effectively, thus ensuring responsible and successful project implementation. 

An extensive and inclusive methodology underpins the development of this Due Diligence Standard. It involves inventorying relevant due diligence standards, designing risk matrices, consulting financial partners and external experts, and seeking validation from the HOOP Circular Investors Board. 

Comprehensive in its scope, the Due Diligence Standard encompasses 22 distinct risk areas, ranging from financial markets and governance to environmental and regulatory concerns. Notably, it serves as a foundational guide, adaptable to the unique needs and challenges of individual UCBE projects. 

By embracing this guidance, project promoters can effectively de-risk their endeavors, enhancing their bankability and bolstering confidence among stakeholders. With cities and entrepreneurs better equipped to navigate and mitigate risks, the path to a low-carbon, resilient, and resource-efficient economy becomes clearer. Ultimately, the implementation of the Due Diligence Standard propels European cities and regions towards fulfilling the ambitious goals of circularity and carbon neutrality by 2050. 

The introduction of this groundbreaking Due Diligence Standard marks a pivotal moment in the journey towards sustainable and thriving bioeconomies across Europe, setting the grounds for responsible and informed decision-making in the realm of Urban Circular BioEconomy projects. For more information and access to the Due Diligence Standard, click here.