Insegnamento a.a. 2025-2026

20553 - FINANCE FOR THE GREEN BUSINESS AND THE CIRCULAR ECONOMY

Department of Finance


Class timetable
Exam timetable

Course taught in English
Go to class group/s: 31
ACME (6 credits - II sem. - OP  |  SECS-P/11) - AFC (6 credits - II sem. - OP  |  SECS-P/11) - AI (6 credits - II sem. - OP  |  12 credits SECS-P/11) - CLELI (6 credits - II sem. - OP  |  SECS-P/11) - CLMG (6 credits - II sem. - OP  |  SECS-P/11) - DES-ESS (6 credits - II sem. - OP  |  SECS-P/11) - DSBA (6 credits - II sem. - OP  |  SECS-P/11) - EMIT (6 credits - II sem. - OP  |  SECS-P/11) - ESS (6 credits - II sem. - OP  |  SECS-P/11) - FIN (6 credits - II sem. - OP  |  SECS-P/11) - GIO (6 credits - II sem. - OP  |  SECS-P/11) - IM (6 credits - II sem. - OP  |  SECS-P/11) - MM (6 credits - II sem. - OP  |  SECS-P/11) - PPA (6 credits - II sem. - OP  |  SECS-P/11)
Course Director:
CLAUDIO ZARA

Classes: 31 (II sem.)
Instructors:
Class 31: CLAUDIO ZARA


Suggested background knowledge

This is also a quantitative course; however, it does not emphasize complex mathematical derivations or advanced statistical analysis. A general understanding of mathematics and statistics as applied to finance is required. For Bocconi students, courses such as Financial Mathematics, Statistics, Accounting, and Corporate Finance are considered prerequisites. Exchange students are strongly recommended to have completed similar coursework. Students are expected to demonstrate a solid grasp of foundational concepts, including (but not limited to): - Financial mathematics: time value of money, net present value (NPV), and internal rate of return (IRR); - Statistics: variance, covariance, and probability distributions; - Accounting and finance: ability to construct, interpret, and analyze cash flow statements, and to calculate the cost of capital using the Capital Asset Pricing Model (CAPM).

Mission & Content Summary

MISSION

Sustainable finance is an emerging area that links financial materiality to impact-oriented metrics, such as environmental objectives (green finance) and economic resilience (circular economy). According to the European Union, over 60% of the EU’s GDP is directly influenced by sustainability goals. This course explores the relationships between finance, green business, and the circular economy, focusing on the opportunities that this new economic paradigm presents to the financial services industry. It provides both theoretical and practical foundations for understanding how finance can serve as a strategic lever in accelerating the transition to sustainable and circular business models. The course’s mission is to equip students with a financial perspective on sustainability, including its influence on deal structures across key sectors of financial activity, and the evolving risk-return profiles of green and circular investments. Students will also engage with current research in finance and the circular economy, benefiting from UB’s established network of key partners in the field, such as the Intesa Sanpaolo (ISP) Banking Group.

CONTENT SUMMARY

The course is structured into three main parts. The first part focuses on developing the economic and financial characteristics of sustainable business models—both green and circular—including the opportunities they offer and the changing profile of their main business economics and risks. The second part provides a comprehensive analysis of the financial services sectors most affected by sustainability, examining both the financing and investing perspectives. The third part focuses on risk analysis in sustainable investment deals, highlighting how such analysis informs financial decision-making.

Throughout the course, theory is supported by real-world examples, case studies, and guest lectures from industry professionals.

 

Introduction: Green Business and the Circular Economy

  • Definitions and core principles

 

Part I – Green and Circular Business Models

  • How green and circular models differ from linear business models

  • Investment opportunities and the concept of stranded linear assets

  • Shifting economics, financial profiles, and volatility in sustainable business models

 

Part II – Sustainable Finance and the Financial Services Industry

  • Pillars of sustainable finance and industry opportunities

  • Financial regulation: focus on the EU framework

  • The role of non-financial disclosure in investment decisions

  • Financial actors and deal types: asset management, investment banking, corporate finance

 

Part III – Risk Analysis and Investment Decision-Making

  • Cash flow metrics and financial sustainability (deterministic approach)

  • Operating risk: asset-side risk, discrete and stochastic methods

  • Liability-side risk and default probability: stochastic models, equity as residual

  • Debt capital in green/circular deals: project risks, sustainability, and debt-holder risk appetite

  • Debt participants: regulatory considerations, ratings, covenants, credit enhancements

  • Equity capital: risk/return analysis and equity-specific metrics

  • Equity participants: regulatory issues, term sheets, performance metrics, IRR analysis

 

Conclusion: The Future of Green Business and the Circular Economy — A Forward-Looking Perspective

Intended Learning Outcomes (ILO)

KNOWLEDGE AND UNDERSTANDING

At the end of the course student will be able to...

  • Demonstrate proficiency in key concepts such as green business, the circular economy, sustainable investments, and impact investing

  • Identify and explain the economic and financial profiles of green and circular businesses and investments

  • Understand the role of finance in sustainability, including key actors, deal types, and investment strategies

  • Apply structuring techniques to various financial instruments, such as green bonds, sustainable loans, and ESG-linked securities

  • Assess the evolving risk profiles associated with green and circular assets

  • Design and conduct a comprehensive financial analysis of investment opportunities in sustainable and circular business sectors

APPLYING KNOWLEDGE AND UNDERSTANDING

At the end of the course student will be able to...

  • Master the principles of the sustainable and circular economic paradigm and effectively communicate them to non-experts

  • Analyze and interpret the evolving economic and financial characteristics of green and circular businesses

  • Develop solutions to fundraising challenges faced by sustainable enterprises at the project, asset, or business level

  • Estimate and evaluate investment risks on both the asset and liability sides, and align them with appropriate pricing or return expectations for capital providers

  • Conduct a comprehensive return-risk analysis to support investment decision-making in the context of finance and sustainability

  • Demonstrate professional readiness for roles in sustainable finance through job assessments, interviews, or other evaluations


Teaching methods

  • Lectures
  • Guest speaker's talks (in class or in distance)
  • Practical Exercises
  • Collaborative Works / Assignments

DETAILS

  • Guest Speaker Sessions (in person or remote): In the first and second parts of the course, selected guest speakers from industry share insights into how business actors classify and finance green and circular projects, and how investors approach opportunities and deal structures.

  • Hands-On Exercises and Analytical Tools:

    • In the first part of the course, quantitative exercises using databases and spreadsheets support financial institutions' analysis of the economic convenience of transitioning to green and circular models.

    • In the second and third parts, students use spreadsheets to perform return-risk analyses, applying both deterministic (discrete) and stochastic approaches.

  • Case Studies and Decision Scenarios (traditional and online):

    • In the second part, case studies reinforce practical understanding of sustainable financial deal structures.

    • In the third part, students work through a decision-making case comparing two investment options — one linear, the other green and circular — to evaluate their respective return-risk profiles.

  • Interactive Classroom Activities: Throughout the course, students are encouraged to actively engage in flipped classroom sessions, discussions, and personal contributions, fostering peer-to-peer learning and applied critical thinking.


Assessment methods

  Continuous assessment Partial exams General exam
  • Written individual exam (traditional/online)
     x
  • Collaborative Works / Assignment (report, exercise, presentation, project work etc.)
 x    
  • Active class participation (virtual, attendance)
 x    

ATTENDING STUDENTS

Final Written Exam (100% of the final grade)
The exam includes both closed-ended and open-ended questions.

Assessment criteria:

  • Ability to describe and critically apply all topics covered in the syllabus (closed-ended questions)

  • Ability to analyse, evaluate, and draw conclusions on key concepts related to sustainable finance (open-ended questions)

Class Participation and Engagement
Active participation during class may be rewarded with up to 6 bonus points added to the final exam grade. Participation is evaluated based on short presentations, in-class discussions, and personal contributions. Regular attendance is a prerequisite for eligibility.

Assessment criteria:

  • Active and meaningful participation in discussions

  • Ability to offer original insights and well-founded arguments

  • Ability to clearly and effectively present topics to peers

Optional Group Assignment
Depending on class size and student background, a group assignment may be introduced. Details will be provided during the course if applicable.


NOT ATTENDING STUDENTS

Final Written Exam (100% of the final grade)
The exam includes both closed-ended and open-ended questions.

Assessment criteria:

  • Ability to describe and critically apply all topics covered in the syllabus (closed-ended questions)

  • Ability to analyse, evaluate, and draw conclusions on key concepts related to sustainable finance (open-ended questions)


Teaching materials


ATTENDING AND NOT ATTENDING STUDENTS

·       Slides, Excel files, selected articles and other material are distributed through the course Blackboard platform.

Last change 18/11/2025 18:40