Sustainable financing refers to investment decisions in the financial sector that take into account environmental, social and governance factors.
These investments aim to support sustainable economic activities and projects.
Some of these considerations include:
- Reduction and adaptation of climate change and adaptation
- Inequality and inclusiveness
- Management structures
- Pollution prevention
- Work relationships
- Circular economy
Sustainable finances also try to create transparency when it comes to risks related to ESG factors that can affect the financial system.
It aims to reduce these risks from senior financial and corporate actors.
Within sustainable finances
Sustainable Finance is a net concept for various things, including environmentally friendly bonds, investments in social effects, ESG -focused asset management, sustainable banking and climateinancing.
These financial investments are usually developed to support projects and companies that have a positive effect on society and the environment.
Companies that would benefit from sustainable funds, for example, are based on renewable energies, sustainable agriculture, affordable living space and healthcare.
The aim of sustainable financing is to impress sustainable practices with the final goal of a more resilient, more integrative and more sustainable economy.
Banks like HSBC invest a lot in the sector, with the company outlining its support in its latest financial report.