“Old” financial instruments in “new” circular models: Applied environmental accounting in the banking sector for reporting in a circular economy
“Viejos” instrumentos financieros en “nuevos” modelos circulares: Contabilidad medioambiental aplicada al sector financiero para el reporting de la economía circular
Supporting Agencies
- This work has been co-financed by the Government of Aragon within the Research Group S33_23R and the LMP159_21 project.
Abstract
The role of commercial banks and financial institutions has been described as crucial for the circular economy since they are key actors in financing companies and projects. The facilitating potential of some financial instruments managed by the financial sector has not been studied in connection to extending the circular economy in the environmental accounting framework. Particularly, the renting contracts service, which has been associated with more sustainable performance, shows interesting circular characteristics for servitization and the sharing economy.
By studying the details of renting contracts of a financial institution over 18 years as a case study in Spain, this research demonstrates how this type of service, applied to vehicles, can render important benefits in terms of use of resources, environmental impact, energy efficiency and reduced carbon emissions. Measuring these quantitative impacts and reporting about them is important from an environmental accounting basis and in the framework of the European Union taxonomy for sustainable finance.
The results obtained from the stakeholders’ perspective highlight the pivotal role of existing financial instruments and the need for new metrics for reporting linked to the servitization of the economy as a specific circular issue. This paper contributes to the academic literature by bringing empirical results to a still recent line of research. For practitioners, we provide innovative metrics for circular economy in the financial sector, and for policymakers, this research highlights the wider role of financial institutions in promoting circular economy within the sustainability framework.
Downloads
-
Abstract1121
-
PDF879
-
HTML88
References
Aguado-Correa, F., de la Vega-Jiménez, J. J., López-Jiménez, J. M., Padilla-Garrido, N., & Rabadán-Martín, I. (2023). Evaluation of non-financial information and its contribution to advancing the sustainable development goals within the Spanish banking sector. European Research on Management and Business Economics, 29(1), 100211. https://doi.org/10.1016/j.iedeen.2022.100211
Aranda-Usón, A., Moneva, J. M., & Scarpellini, S. (2022). Circular sustainability accounting’ in businesses for a circular economy: a framework of analysis. European Journal of Social Impact & Circular Economy, 3(3), 1–10. https://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=161912024&site=ehost-live%0A10.10.13135/2704-9906/6817
Aranda-Usón, A., Portillo-Tarragona, P., Marín-Vinuesa, L. M., & Scarpellini, S. (2019). Financial Resources for the Circular Economy : A Perspective from Businesses. Sustainability, 11(888), 1–23. https://doi.org/10.3390/su11030888
Aranda-Usón, A., Portillo-Tarragona, P., Scarpellini, S., & Llena-Macarulla, F. (2020). The progressive adoption of a circular economy by businesses for cleaner production: An approach from a regional study in Spain. Journal of Cleaner Production, 247(1), 119648. https://doi.org/10.1016/j.jclepro.2019.119648
Bardhi, F., & Eckhardt, G. M. (2012). Access-based consumption: The case of car sharing. Journal of Consumer Research, 39(4), 881–898. https://doi.org/10.1086/666376
Benito-Bentué, D., Marco-Fondevila, M., & Scarpellini, S. (2022). Financial Institutions Facing the Challenge of the European Taxonomy of Sustainable Investments and the Circular Economy Disclosure. UCJC Business and Society Review, 19(73), 120–161. https://doi.org/10.3232/UBR.2022.V19.N2.03
Blanco-Zaitegi, G., Álvarez Etxeberria, I., & Moneva, J. M. (2022). Biodiversity accounting and reporting: A systematic literature review and bibliometric analysis. Journal of Cleaner Production, 371. https://doi.org/10.1016/j.jclepro.2022.133677
Bonifácio Neto, J., & Branco, M. C. (2019). Controversial sectors in banks’ sustainability reporting. International Journal of Sustainable Development & World Ecology, 26(6), 495–505. https://doi.org/10.1080/13504509.2019.1605546
Burritt, R. L., & Schaltegger, S. (2010). Sustainability accounting and reporting: Fad or trend? Accounting, Auditing & Accountability Journal, 23(7), 829–846. https://doi.org/10.1108/09513571011080144
Chen, Z., Mirza, N., Huang, L., & Umar, M. (2022). Green Banking—Can Financial Institutions support green recovery? Economic Analysis and Policy, 75, 389–395. https://doi.org/10.1016/j.eap.2022.05.017
Cole, R. J. (2011). Transitioning from green to regenerative design. Https://Doi.Org/10.1080/09613218.2011.610608, 40(1), 39–53. https://doi.org/10.1080/09613218.2011.610608
da Silva Inácio, L., & Delai, I. (2022). Sustainable banking: a systematic review of concepts and measurements. In Environment, Development and Sustainability, 24, 1–39. https://doi.org/10.1007/s10668-021-01371-7
Dewick, P., Bengtsson, M., Cohen, M. J., Sarkis, J., & Schröder, P. (2020). Circular economy finance: Clear winner or risky proposition? Journal of Industrial Ecology, 24(6), 1192–1200. https://doi.org/10.1111/jiec.13025
Elalfy, A., & Weber, O. (2019). Corporate Sustainability Reporting. The Case of the Banking Industry. In CIGI Papers (Issue 211, pp. 1–32). Centre for international Governance Innovation. https://www.cigionline.org/sites/default/files/documents/Paper no.212web_1.pdf
Ellen MacArthur Foundation. (2015). Towards a Circular Economy - Economic and Business Rationale for an Accelerated Transition.
Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088, 2019 Official Journal of the European Union 13 (2020).
Directive (EU) 2022/2464 as regards corporate sustainability reporting, Pub. L. No. Directive (EU) 2022/2464, Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting L 322/15 (2022). https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022L2464&qid=1671200781029&from=EN
Fischer, S., Steger, S., Jordan, N. D., O’Brien, M., & Schepelmann, P. (2012). Leasing society. https://www.researchgate.net/publication/273698933
Gubeladze, D., & Pavliashvili, S. (2020). LINEAR ECONOMY AND CIRCULAR ECONOMY - CURRENT STATE ASSESSMENT AND FUTURE VISION. International Journal of Innovative Technologies in Economy, 5(32). https://doi.org/10.31435/rsglobal_ijite/30122020/7286
Hao, S., Kuah, A. T. H., Rudd, C. D., Wong, K. H., Lai, N. Y. G., Mao, J., & Liu, X. (2020). A circular economy approach to green energy: Wind turbine, waste, and material recovery. Science of the Total Environment, 702. https://doi.org/10.1016/j.scitotenv.2019.135054
Heras‐Saizarbitoria, I., Boiral, O., & Testa, F. (2023). Circular economy at the company level: An empirical study based on sustainability reports. Sustainable Development, 31(4), 2307-2317. https://doi.org/10.1002/sd.2507
Ikiz Kaya, D., Dane, G., Pintossi, N., & Koot, C. A. M. (2021). Subjective circularity performance analysis of adaptive heritage reuse practices in the Netherlands. Sustainable Cities and Society, 70, 102869. https://doi.org/10.1016/j.scs.2021.102869
Ionaşcu, I., & Ionaşcu, M. (2018). Business models for circular economy and sustainable development: The case of lease transactions. Amfiteatru Economic, 20(48), 356–372. https://doi.org/10.24818/EA/2018/48/356
Johl, S. K., & Toha, M. A. (2021). The nexus between proactive eco‐innovation and firm financial performance: a circular economy perspective. Sustainability, 13(11), 6253. https://doi.org/10.3390/su13116253
Katzev, R. (2003). Car Sharing: A New Approach to Urban Transportation Problems. Analyses of Social Issues and Public Policy, 3(1), 65–86. https://doi.org/10.1111/J.1530-2415.2003.00015.X
Kirchherr, J., Reike, D., & Hekkert, M. (2017). Conceptualizing the circular economy: An analysis of 114 definitions. Resources, Conservation and Recycling, 127(1), 221–232. https://doi.org/10.1016/j.resconrec.2017.09.005
Korhonen, J., Honkasalo, A., & Seppälä, J. (2018). Circular Economy: The Concept and its Limitations. Ecological Economics, 143(1), 37–46. https://doi.org/10.1016/j.ecolecon.2017.06.041
Korhonen, J., Nuur, C., Feldmann, A., & Birkie, S. E. (2018). Circular economy as an essentially contested concept. Journal of Cleaner Production, 175, 544–552. https://doi.org/10.1016/j.jclepro.2017.12.111
Larrinaga, C., & Bebbington, J. (2021). The pre-history of sustainability reporting: a constructivist reading. Accounting, Auditing and Accountability Journal, 34(9), 131–150. https://doi.org/10.1108/AAAJ-03-2017-2872
Larrinaga, C., & Garcia-Torea, N. (2022). An ecological critique of accounting: The circular economy and COVID-19. Critical Perspectives on Accounting, 82, 102320. https://doi.org/10.1016/j.cpa.2021.102320
Li, H., Bao, W., Xiu, C., Zhang, Y., & Xu, H. (2010). Energy conservation and circular economy in China’s process industries. Energy, 35(11), 4273–4281. https://doi.org/10.1016/j.energy.2009.04.021
Llena, F., Moneva, J. M., & Hernandez, B. (2007). Environmental disclosures and compulsory accounting standards: The case of Spanish annual reports. Business Strategy and the Environment, 16, 50–63. https://doi.org/10.1002/bse.466
Llena-Macarulla, F., Moneva, J. M., Aranda-Usón, A., & Scarpellini, S. (2023). Reporting measurements or measuring for reporting? Internal measurement of the Circular Economy from an environmental accounting approach and its relationship. Revista de Contabilidad - Spanish Accounting Review, 26(2), 200–212. https://doi.org/10.6018/rcsar.467751
Marco-Fondevila, M., Llena-Macarulla, F., Callao-Gastón, S., & Jarne-Jarne, J. I. (2021). Are circular economy policies actually reaching organizations? Evidence from the largest Spanish companies. Journal of Cleaner Production, 285, 124858. https://doi.org/10.1016/j.jclepro.2020.124858
Marco-Fondevila, M., Moneva-Abadía, J. M., & Llena-Macarulla, F. (2020). Accounting for carbon footprint flows in wine production process. Case study in spanish winery. Applied Sciences, 10(23), 1–13. https://doi.org/10.3390/app10238381
Mentink, B. (2014). Circular Business Model Innovation: A process framework and a tool for business model innovation in a circular economy. Delft University of Technology, 167. file:///Users/mediasupportcenter/Downloads/thesis report final Bas Mentink.pdf%0Ahttp://repository.tudelft.nl/assets/uuid:c2554c91-8aaf-4fdd-91b7-4ca08e8ea621/THESIS_REPORT_FINAL_Bas_Mentink.pdf
Moneva, J. M., & Llena, F. (2000). Environmental disclosures in the annual reports of large companies in Spain. European Accounting Review, 9(1), 7–29. https://doi.org/10.1080/096381800407923
Moneva, J. M., Scarpellini, S., Aranda-Usón, A., & Alvarez Etxeberria, I. (2023). Sustainability reporting in view of the European sustainable finance taxonomy: Is the financial sector ready to disclose circular economy? Corporate Social Responsibility and Environmental Management, 30(3), 1336-1347. https://doi.org/10.1002/csr.2423
Norouzi, M., Chàfer, M., Cabeza, L. F., Jiménez, L., & Boer, D. (2021). Circular economy in the building and construction sector: A scientific evolution analysis. Journal of Building Engineering, 44, 102704. https://doi.org/10.1016/j.jobe.2021.102704
Oh, C. H., Park, J. H., & Ghauri, P. N. (2013). Doing right, investing right: Socially responsible investing and shareholder activism in the financial sector. Business Horizons, 56(6), 703–714. https://doi.org/10.1016/j.bushor.2013.07.006
Ormazabal, M., Prieto-Sandoval, V., Puga-Leal, R., & Jaca, C. (2018). Circular Economy in Spanish SMEs: Challenges and opportunities. Journal of Cleaner Production, 185, 157–167. https://doi.org/10.1016/j.jclepro.2018.03.031
Ozili, P. K. (2021). Circular Economy, Banks and Other Financial Institutions: What’s in it For Them? Circular Economy and Sustainability, 3(1), 787–798. https://doi.org/https://doi.org/10.1007/s43615-021-00043-y
Ozili, P. K., & Opene, F. (2021). The role of banks in the circular economy. SSRN Electronic Journal. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3778196
Rogers, J., & Rodrigues, A. (2015). Product leasing-a strategy to allow manufacturers and customers to benefit from elongation of product life. In Nottingham Trent University (Ed.), Product Lifetimes And The Environment Conference Proceedings (pp. 318–323). http://www.autotrader.co.uk
Roos, J. A., & Brackley, A. M. (2012). The Asian Wood Pellet Markets. U S Forest Service Pacific Northwest Research Station General Technical Report PNWGTR, 1–25.
Saarinen, A., & Aarikka-Stenroos, L. (2022a). Financing-Related Drivers and Barriers for Circular Economy Business: Developing a Conceptual Model from a Field Study. Circular Economy and Sustainability. https://doi.org/10.1007/s43615-022-00222-5
Saarinen, A., & Aarikka-Stenroos, L. (2022b). Financing-Related Drivers and Barriers for Circular Economy Business: Developing a Conceptual Model from a Field Study. Circular Economy and Sustainability, IN PRESS. https://doi.org/10.1007/s43615-022-00222-5
Salesa, A., León, R., & Moneva, J. M. (2022). Is Business Research Shaping the Circle? Systematic and Bibliometric Review of Circular Economy Research. Sustainability, 14(14), 8306. https://doi.org/10.3390/su14148306
Salesa, A., León, R., & Moneva, J. M. (2023). Airlines practices to incorporate circular economy principles into the waste management system. Corporate Social Responsibility and Environmental Management, 30(1), 443–458. https://doi.org/10.1002/csr.2365
Salvioni, D., & Brondoni, S. (2020). Ouverture de ‘Circular Economy & New Business Models.’ Symphonya. Emerging Issues in Management, 1, 1. https://doi.org/10.4468/2020.1.01ouverture
Scarpellini, S. (2022). Social impacts of a circular business model: An approach from a sustainability accounting and reporting perspective. Corporate Social Responsibility and Environmental Management, 29(3), 646–656. https://doi.org/10.1002/csr.2226
Scarpellini, S., Gimeno, J. Á., Portillo-Tarragona, P., & Llera-Sastresa, E. (2021). Financial Resources for the Investments in Renewable Self-Consumption in a Circular Economy Framework. Sustainability, 13(12), 6838. https://doi.org/10.3390/su13126838
Scarpellini, S., Marín-Vinuesa, L. M., Aranda-Usón, A., & Portillo-Tarragona, P. (2020). Dynamic capabilities and environmental accounting for the circular economy in businesses. Sustainability Accounting, Management and Policy Journal, 11(7), 1129–1158. https://doi.org/10.1108/SAMPJ-04-2019-0150
Schaltegger, S., Bennett, M., & Burritt, R. (2006). Sustainability accounting and reporting: Development, linkages and reflection: An introduction. In Sustainability Accounting and Reporting (pp. 1–33). https://doi.org/10.1007/978-1-4020-4974-3_1
Schaltegger, S., Etxeberria, I. Á., & Ortas, E. (2017). Innovating Corporate Accounting and Reporting for Sustainability – Attributes and Challenges. Sustainable Development, 25(2), 113–122. https://doi.org/10.1002/sd.1666
Stahel, W. R. (2016). The circular economy. Nature, 531(7595), 435–438. https://doi.org/10.1038/531435a
Tisserant, A., Pauliuk, S., Merciai, S., Schmidt, J., Fry, J., Wood, R., & Tukker, A. (2017). Solid Waste and the Circular Economy: A Global Analysis of Waste Treatment and Waste Footprints. Journal of Industrial Ecology, 21(3), 628–640. https://doi.org/10.1111/jiec.12562
Toxopeus, H., Achterberg, E., & Polzin, F. (2018). Financing business model innovation: bank lending for firms shifting towards a circular economy. https://sustainablefinancelab.nl/wp-content/uploads/sites/334/2018/01/Toxopeus-Achterberg-Polzin-2018-SFL-working-paper-series.pdf
Unerman, J., Bebbington, J., & O’Dwyer, B. (2010). Sustainability Accounting and Accountability. London, UK: Routledge. https://doi.org/10.4324/9780203815281
Windahl, C., & Lakemond, N. (2010). Integrated solutions from a service-centered perspective: Applicability and limitations in the capital goods industry. Industrial Marketing Management, 39(8), 1278–1290. https://doi.org/10.1016/j.indmarman.2010.03.001
Worldwathc Institute. (2008). State of the World 2008. Innovations for a Sustainable Economy. https://www.environmentandsociety.org/mml/state-world-2008-innovations-sustainable-economy
Xiang, Z., Bailey, R. T., Nozari, S., Husain, Z., Kisekka, I., Sharda, V., & Gowda, P. (2020). DSSAT-MODFLOW: A new modeling framework for exploring groundwater conservation strategies in irrigated areas. Agricultural Water Management, 232, 106033. https://doi.org/10.1016/j.agwat.2020.106033
Ziolo, M., Bak, I., Cheba, K., & Spoz, A. (2020). The relationship between banks and company business models - sustainability context. Procedia Computer Science, 176, 1507–1516. https://doi.org/10.1016/j.procs.2020.09.161
Copyright (c) 2023 Revista de Contabilidad - Spanish Accounting Review
This work is licensed under a Creative Commons Attribution 4.0 International License.
The publications in this journal are subject to the following terms:
1. Ediciones de la Universidad de Murcia (EDITUM) and ASEPUC conserve the patrimonial rights (copyright) of the published manuscripts, and favour and allow their reuse under the licence of use indicated in point 2.
2. The manuscripts are published in the electronic edition of the journal under an Attribution-NonCommercial-NoDerivatives 4.0 International licence. It allows to copy, distribute and include the article in a collective work (for example, an anthology), as long as there is no commercial purpose, the article is not altered or modified and the original work is properly cited. This journal is free of charge for the Open Access publication. ASEPUC and EDITUM finance the productiona and publication costs of the manuscripts.
3. Conditions for self-archiving. Authors are permitted and encouraged to electronically disseminate the published version of their works, as it favors their circulation and dissemination and thus a possible increase in their citation and reach among the academic community.
