Recent history has shown us the impact of taking a short term approach to finance, with the financial crisis highlighting how a lack of transparency and regulation can create mayhem on a global scale. Governments have launched efforts to prevent similar situations going forward and sustainable finance is an example of area where it seems they are determined to get it right.
A High-Level Expert Group on Sustainable Finance has been engaged and has created the basis for the EU Action Plan on Sustainable Finance, a blueprint for financial players going forward.
Climate change and other environmental risks now represent some of the most significant global risks both in terms of likelihood and impact. Investor demand is growing and investment processes are being examined through an ESG lens. The cost of taking steps to mitigate the effects of climate change and other ESG relating risks is now lower than the costs that could be incurred by ignoring these risks. Upcoming regulation will move sustainable finance from being an advantage to being a regulatory imperative.
For 20 years or more we have recognized that the way we do business has serious impacts on the world around us. It has become increasingly clear that the state of the world around us affects the way we do business.