There is often talk of turning points in sustainability. The moments where we take an irreversible stride towards a more sustainable economy.
Sustainable finance seems to be once again at a watershed, with environmental, social and governance (ESG) factors now a major factor in many investments.
From negative screening and ESG integration to investing in products & services that solve a sustainability challenge and a focus on climate risks and stranded assets – sustainable finance continues to evolve and advance.
But the truth about sustainability, and change, is that it is never over.
We are now seeing further progress in sustainable finance, let us not mention the “Larry Fink letter” (If Money Talks, We Need to Shout). Asset managers are looking beyond SRI and ESG towards investing in themes and megatrends (Investing for Sustainability: From Screening to Thematic Investing) – with the Sustainable Development Goals offering a framework for investment with strong potential for financial and societal growth. Greater attention is also being paid to the sustainability of the investments we make to safeguard our futures (Pensions: Saving (for) the Future).
Private finance is critical to support the low carbon transition: the flow of corporate capital towards conservation and sustainable ecosystems is gaining momentum (Financing Forests: A Call to Action for Business). There is increasing transparency on, and disclosure of, the climate risks that will impact the financial system (In Focus: Taskforce on Climate-related Financial Disclosures) and a better understanding of how businesses can better track ROI on sustainability investments (Meet our Network: Tensie Whelan, NYU Stern Center for Sustainable Business).
Finance is a major part of the world we live in and it is significant to see investors warning governments to act on climate change “or risk a financial crash”. There is much change in the right direction, but still a way to go before every financial transaction supports the long-term sustainability of our society, environment and economy.