Green Horizons: Advancing Climate Solutions Through Green Finance, Circular Economy, and ESG

The growing interest of economic and financial operators in promoting sustainable development in compliance with ESG criteria has led to the definition of an innovative area of sustainable finance called “circular finance”. Circular finance focuses on the financing of projects and activities that promote the circular econ- omy, implementing the development of new business models. It is based on the creation of virtuous circuits where resources, products, and materials are reused, reducing the consumption of natural resources and the environmental impact asso- ciated with the production of new goods and, consequently, ensuring more efficient management of resources. The adoption by companies of a systemic and integrated vision, which takes into account the entire production chain, stimulates the promo- tion of greater social and environmental responsibility as well as a greater green transition for the entire corporate life cycle. This chapter starts with an overview of the development of circular finance and then identifies some financing sub-models, distinguishing green finance, climate finance, and carbon finance. The chapter con- tinues with the examination of the implications of circular finance as a tool to redi- rect financial flows towards sustainable investments and corporate innovations, enabling social well-being in a system with increasingly limited resources.