What is sustainability?
The dictionary definition of sustainability is:
Environmental Science. The quality of not being harmful to the environment or depleting natural resources, and thereby supporting long-term ecological balance.
What does that mean to most?
We (the majority of members of the public) understand sustainability as ‘the practice of meeting the needs of the present without compromising the ability of future generations to meet their own needs’.
This is based on the idea that everything we need for survival and well-being depends on the natural environment, either directly or indirectly.
And how is the finance industry working to promote sustainability?
Investing in sustainable projects
Those in finance can invest in projects that promote sustainability, such as:
- Renewable energy
- Clean technologies
- Green infrastructure
- Social impact initiatives
- Sustainable infrastructure
Developing new financial instruments
The finance industry can create new financial instruments to promote sustainability, such as:
- Green bonds
- Sustainability-linked loans
- Impact investing funds
Divesting from unsustainable practices
The finance industry can shift investments away from industries that have negative environmental and social impacts, such as:
- Fossil fuels
- Activities that contribute to environmental degradation
- Companies with poor labor standards
Integrating ESG factors
The finance industry can consider environmental, social, and governance (ESG) factors when making investment decisions:
Assessing the risks and opportunities associated with sustainability issues
Using ESG factors to inform investment choices
Supporting sustainable banking
The finance industry can support sustainable banking by:
Strategically planning and executing banking operations
Taking into consideration the environmental, social, and governance (ESG) impact
Other examples of sustainable finance initiatives include: Social impact bonds, Pay for success (PFS) schemes, Sustainable investment funds, Social venture capital, and Public institutional equity investing
In 2024, we were lucky to hear about sustainability and the role of the CFO at our financeSHOWCASE events from ACCA.
Learn more about our financeSHOWCASE events here
