WHAT IS SUSTAINABLE FINANCE ?
Sustainable finance refers to the process of taking environmental, social and governance (ESG) considerations into account when making investment decisions in the financial sector, leading to more long-term investments in sustainable economic activities and projects.
If we don’t act now we won’t have a planet left. Finance can lead the way ensuring investments are spent correctly to encourage a sustainable future.
In 2019, the UK became the first major economy to commit in law to net zero greenhouse gas emissions by 2050. In 2021, the government went further, setting in law the world’s most ambitious climate change target to cut emissions by 78% by 2035 compared to 1990 levels. To achieve this, the whole economy will have to transform.
This shift is well underway. The market for ESG investments in the UK has grown dramatically. Businesses and financial institutions are responding to the challenge and impetus to grow in responsible, sustainable ways.
Sustainable finance will be crucial in directing private investments into the transition towards net zero and into companies that demonstrate good governance. It will play a role in fighting the climate change, in making our societies more diverse and inclusive and in supporting a more sustainable economy.