The Impact of The Transition to The Circular Economy Implementations in The Financial Industry: Recommendations for Good Practice

Lethiwe Nzama-Sithole and Sezer Bozkus Kahyaoglu

A chapter in Sustainability Development through Green Economics, 2024, vol. 114, pp 173-189 from Emerald Group Publishing Limited

Abstract: Introduction:The circular economy is observed as a good sustainability practice that has gained importance recently. The effects of this practice specific to the financial industry are examined in the context of green accounting, finance, and sustainability reporting standards and needs. Purpose:This chapter aims to analyse the impact of the circular economy on the finance industry based on three research questions: (1) What benefits and challenges does the circular economy bring to the financial industry? (2) What should be the financial industry’s strategic roadmap and business model for transitioning from a linear economy to a circular economy? (3) What are the differentiating aspects of ecosystem accounting and environmental accounting in its structure and use in the financial industry? Methodology:The method of our work is based on a ‘strategic road map for circular economy’ implementation and a ‘sustainability business model framework’ relevant to the finance industry. Thus, we systematically present the ‘value generation process’ considering the industry trends and dynamics and regulatory challenges regarding ‘green business model’ management with a strategic approach. Findings:To coordinate the transition to a circular economy based on systematic knowledge about the state of ecosystems and their interactions with society, it is necessary to design monitoring, accounting and reporting systems that adapt to the new business operating environment. This chapter provides recommendations from the perspective of the financial sector.

Keywords: Circular economy; linear economy; sharing economy; sustainable finance; green accounting; value hill; green blockchain; green business model for finance industry; G10; Q50 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:csefzz:s1569-375920240000114011

DOI: 10.1108/S1569-375920240000114011

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