Exploring the role of green finance in Italian SMEs: financing the circular economy

Ginevra Coletti, Asia Guerreschi and Massimiliano Mazzanti

Chapter 17 in Handbook of Climate Change and Financial Markets, 2026, pp 345-363 from Edward Elgar Publishing

Abstract: This chapter explores the relationship between circular economy strategies (CES) undertaken by SMEs in Italy and the financial tools utilized to support their innovations. Using data from a survey conducted in January 2021 analysing 4,649 observations across Italy for the period 2019–2020, the chapter highlights the use of various funding options. These range from conventional bank loans and specialized green financing instruments, such as green bonds, to equity financing, public funds, or subsidies provided at local, national, or international levels, and innovative approaches like crowdfunding. The study provides descriptive insights into the factors influencing SMEs’ choices of financing, considering their location, size, age, and exporting behaviour, to measure the scale of their sustainability initiatives. Emphasis is placed on the role of dedicated tools like internal funding, green bonds, and public subsidies in facilitating significant CES. By exploring these dynamics, the chapter provides insights into the interplay between financial tools and climate action in the Italian SME sector, potentially offering valuable perspectives for policymakers, financial actors, and entrepreneurs working towards sustainable development and CES.

Keywords: Circular economy strategies; SMEs; Financial tools; Innovation; Green financing; Climate action (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035340415
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