The Purpose of Green Finance

The transformation of the financial service sector - Today, societies, economies and businesses are facing undisputable challenges: Global warming, growing nationalism and social unrest, regulatory constraints, financial crises and, as of late, a global pandemic.

The next generation of businesses needs to adapt to these realities, if it is not to lose its license to operate altogether. New business models must be re-connecting economic and societal benefits. This also applies to the financial services sector.
 

A growing number of wealth and asset managers, insurers, and banks are beginning to mount pressure on corporations to operate sustainably and to incorporate ESG goals into their business strategy. At the same time, the financial sector itself has also come into the limelight in this regard: Those who provide capital and financing for operations that are harmful to the climate and the environment make themselves vulnerable, putting their competitiveness and reputation on the line.
 

The Paris Climate Agreement and the Sustainable Development Goals (SDGs) drafted by the United Nations are important drivers of change in the finance industry. During the coronavirus pandemic, calls are growing for focusing government aid on sustainable investments as the public is discussing solutions on how to rebuild the economy. The topic of Green Finance is on the rise.