Circular Economy and Green Finance: An Interdisciplinary Pathway to Sustainable Business Models

Abstract

Environmental degradation, resource scarcity, and climate change are all burning issues of the global community that require re-evaluation of linear economic models. The circular economy (CE) is an opportunity to provide a regenerative option by decoupling economic growth and resource consumption through recycling, reuse, and extension of products lifecycle. At the same time, the so-called green finance has taken the form of a driver tool to direct sustainable investment and reduce the risk of environment-related innovations. The current article examines the interconnection between CE practices and green finance tools, suggesting the interdisciplinary direction of developing resilient and sustainable business models. Relying on empirical case studies and policy frameworks, the research defines the most visible financial mechanisms, which are green bonds, sustainability-linked loans, and ESG funds, as a means of transitioning to circularity. The intersection of circular principles and new financial models not only benefits the environment, but also returns economic and competitive benefits to companies. The paper ends with a policy-research-business partnership roadmap that would scale sustainable business models to be in line with the Sustainable Development Goals (SDGs).