More than ever, we, the collective us, are in great need to look deeply into sustainable finance. Since the world is interconnected all the more, anything happening at the far end of the planet could adversely affect the rest. What we set out to do today determines the possibility of a better future.
What is Sustainable Finance?
Wikipedia has a good definition but the one from Harvard defines it impeccably.
“Sustainable finance is defined as investment decisions that take into account the environmental, social, and governance (ESG) factors of an economic activity or project.”
If it’s still vague, let’s dissect them to understand better.
Any government or non-governmental, global financial organisation, when undertaking an activity or a global project, should evaluate the ESG factors attached with those projects. They should mobilise and deploy the funds as a force for good towards the ESG factors to achieve a better tomorrow.
Adopting Sustainable Finance
When the United Nations Organisation (UNO) adopted sustainable development goals (SDGs) in 2015, also known as Global goals, it was deployed with a massive vision of ending global poverty by 2030. It was brought into action after evaluating the social and environmental factors of the project.
Even though the concept has been around for a while, the world has been waking up to it only now. As more and more awareness is created about sustainable finance, the global institutions, NGOs, and other stakeholders are looking for genuine finance professionals to guide them through the ESG factors.
Sustainability - A Disruptive Force
Many have misunderstood the term ‘Sustainable Finance’ as a marketing gimmick meanwhile the industry leaders term it a disruptive force in business. It adds an additional, heavy weight- age factor of thinking sustainably in every possible way to deliver the best outcomes. Since our environment is getting fragile every year, we have the responsibility to nullify the damage and make it sustainable.
Even the private firms are taking upon sustainable finance as there is a social factor in it. To give a few examples, the industries are trying to bridge the pay gap between the genders. They focus on creating more opportunities for women and enabling them to shine among their peers.
To Conclude
The glimmer of the positive results of these sustainable finance projects is starting to show in many aspects. Nations and organisations are now more aware of their emissions and they’re taking measures to bring them under control. The racial, social, and gender gaps reports are comparatively better than where we were yesterday. Instead of listening only to the powerful voices, we hear the common voices echoing on the highest levels of every government and organisation.
All this may not be enough, but we are on the right track via sustainable finance.