Sustainable finance
From ACT Wiki
Sustainability.
Sustainable finance is finance raised for the purpose of sustainable projects.
Sustainable finance includes a strong green finance component that aims to support economic growth while:
- Reducing pressures on the environment
- Addressing green-house gas emissions and tackling pollution
- Minimising waste and improving efficiency in the use of natural resources
Sustainable finance also encompasses increasing awareness of and transparency about:
- The risks which may have an impact on the sustainability of the financial system
- The need for financial and corporate market participants to mitigate those risks through appropriate governance
Governance is fundamental
- "Sustainable finance generally refers to the process of taking due account of environmental, social and governance considerations when making investment decisions in the financial sector, leading to increased longer-term investments into sustainable economic activities and projects.
- Environmental considerations refer to climate change mitigation and adaptation, as well as the environment more broadly, such as preserving biodiversity, preventing pollution and promoting the circular economy.
- Social considerations refer to issues of inequality, inclusiveness, labour relations, investment in human capital and communities, and human rights issues.
- The governance of public and private institutions, including management structures, employee relations and executive remuneration, plays a fundamental role in ensuring the inclusion of social and environmental considerations in the decision-making process."
- European Union - Lex - September 2023.
See also
- Climate finance
- Climate risk
- Environmental profit and loss
- ESG investment
- E3G
- Finance
- G20 Sustainable Finance Working Group
- Global Sustainable Finance Council
- Global Sustainable Investment Alliance
- Governance
- Green finance
- International Platform on Sustainable Finance
- Sustainability
- Sustainability bond
- Sustainability linked loan
- Sustainable bond
- Sustainable debt
- Sustainable Finance Disclosure Regulation (SFDR)
- Sustainable investment
- Sustainable loan
- Ten Point Plan for a Green Industrial Revolution
- UK Sustainable Investment and Finance Association