Sustainable Finance

Definition

Sustainable Finance denotes financial systems, services and products that are integrating environmental, social and governance (ESG Criteria) into business and/or investment decisions such that current social, environmental, and livelihood needs are not compromising the ability of future generations to meet their own needs.

A narrower concept that focuses exclusively on the interface of finance with environmental issues is Green Finance.

Sustainable Finance Practices

Sustainable finance practices are rapidly evolving

• Definitions of ESG factors and domains
• Incorporation of sustainability into business strategies
• Governance, policies and risk management applicable to ESG Risks
• ESG and climate-related disclosures
• Green Financial Products
• Engaging financial industry clients to reorient their investment plans to ensure consistency with the Paris Agreement
• Rorienting financial flows away from unsustainable activities

Sustainable Finance Segments

Activities that currently generally fall under the heading of sustainable finance are:

• sustainable funds (equities)
• ESG Investing
• green bonds
• Impact Investing
• Microfinance
• Active ownership, credits for sustainable projects

See Also

• Glossary of Sustainable Finance
• EU Sustainable Finance Taxonomy
• Stranded Assets

Forums

• Reddit Sustainable Finance Forum
• WT.Social Sustainable Finance Forum