Chapter 22: Sustainable Finance
Chapter 22 Introduction
Learning Objectives
After reading this chapter, you should be able to
- Introduce the concept of sustainable finance.
- Discuss global initiatives towards sustainable finance.
- Discuss World Bank toolkit for green financial systems.
Think About It!
Video: What Is Sustainable Finance?
Before reading this chapter, watch this video that introduces the basic idea of sustainable finance.
Source: Swiss Learning Exchange. (2020, December 16). Episode 1: What does sustainable finance mean? | Sustainable finance | SDGPlus [Video]. YouTube. https://www.youtube.com/watch?v=s5ZS9BuYFbQ
Test Yourself
Introduction
Businesses, now a days, not only focus on making profits but making profits sustainably. The reason of this shift in focus is not only growing awareness of sustainability but also the pressure from customers, investors, banks and regulators to move to a more sustainable economy. In special reference to trade finance, “sustainable finance” deals with sustainable and green financial systems. There has been a lot happening around the world to shift companies’ and institutions’ focus toward environmental, social and governance (ESG) issues.
Some of the global initiatives worth mentioning would be the Paris Agreement, the United Nations Sustainable Development Goals (SDGs), and the Principles of Responsible Investment (PRI). All the signatories of these initiatives follow the standards set for achieving sustainable goals. Institutions like the World Bank are also supporting companies with certain toolkits outlining different ways to help businesses and institutions achieve their sustainability goals.
