Sustainable Finance

Sustainable finance refers to the integration of environmental, social and governance (ESG) criteria into financial services. A newer approach to financial analysis, it goes beyond the traditional focus on profits and losses to consider issues such as how companies respond to the climate crisis and how they treat employees, customers, and shareholders, among others.

Investors are increasingly using this strategy to evaluate financial risks, identify opportunities and express their values. As more companies build sustainability and ESG factors into their business model and culture, sustainability reporting will likely become standard practice in finance.

To align finance with sustainability, financial institutions and investors incorporate ESG factors into investment decisions and business strategies. This involves evaluating environmental impacts, promoting social equity, and ensuring robust governance practices. By doing so, sustainable finance channels investment into projects and activities that support long-term environmental, social, and economic goals, such as those outlined in the UN Sustainable Development Goals (SDGs) and the European Green Deal.