INTEGRATING THE CIRCULAR ECONOMY INTO STRATEGIC FINANCIAL MANAGEMENT: EVALUATING THE ECONOMIC FEASIBILITY OF A USED DENIM MANAGEMENT PROJECT

The increasing environmental pressures, resource scarcity, and market volatility have encouraged organizations to integrate sustainability principles into financial decision-making. This study evaluates the economic feasibility of a circular economy project for the management of used denim in Orizaba, Veracruz, from a Strategic Financial Management perspective. The proposed model incorporates upcycling, textile recycling, and community participation to reduce waste, optimize resource utilization, and generate diversified revenue streams.A comprehensive analysis was conducted using market segmentation, benchmarking, SWOT–CAME strategic assessment, and a Business Model Canvas to examine the project’s operational and strategic viability. The financial evaluation included the estimation of fixed and variable costs, contribution margin, sales projections, income statements, cash flow analysis, Net Present Value (NPV), and Internal Rate of Return (IRR) over a five-year period.The results indicate that the circular business model is economically viable and capable of generating sustainable financial returns while simultaneously delivering environmental and social benefits. The project demonstrates strong alignment with global sustainability trends and the Sustainable Development Goals, particularly responsible consumption and climate action. Despite operational challenges related to scale, processing time, and market competition, strategic partnerships, process optimization, and gradual scalability can enhance long-term performance. The findings confirm that integrating circular economy principles into Strategic Financial Management enables organizations to achieve profitability while creating social and environmental value. The proposed model offers a replicable framework for sustainable business initiatives in local and regional contexts.