With a growing emphasis on the role of private capital in financing the transition towards a circular economy, financial services firms must do more to incorporate sustainability into their operations and products. Especially in a post-COVID-19 world, firms’ cultures are key to creating lasting change.
The adoption of the UN’s 2030 Agenda for Sustainable Development and the signing of the Paris Agreement on Climate Change have boosted sustainable development momentum. And regulatory initiatives such as the EU Action Plan on Sustainable Growth foresee a key role for capital markets in financing the transition to a circular economy. But while regulation is an important driver, considerations extend much further.
As Millennials become the largest cohort of clients, and Generation Z follow hot on their heels, firms have no choice but to meet their demands for sustainable products. Yet, in my view, too few are doing so. The reality is that a failure to make business and products more sustainable risks alienating customers whose perspectives and priorities are changing.