Sustainable finance

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Revision as of 23:46, 18 September 2023 by Doug (talk | contribs) (Add quote from Lex - https://eur-lex.europa.eu/EN/legal-content/glossary/sustainable-finance.html#:~:text=Sustainable%20finance%20generally%20refers%20to,sustainable%20economic%20activities%20and%20projects.)
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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