ESG Risk Quarterly

Understanding Sustainable Finance


What is sustainable finance? Although sustainability experts can be proud of their achievements, ultimately the world is not on a sustainable development path. There are at least three reasons why this should be of concern for financial institutions: firstly, they potentially face significant risk. Secondly, and as importantly, they are still linked with many of the activities that are at the root of the challenges to sustainability. Both banks and insurers provide essential services that support and sometimes enable such activities—which then in turn lead to risks for those financial institutions. Thirdly, there is a significant revenue opportunity to address.

This paper makes the case that designing more effective sustainable finance strategies requires a better understanding of what sustainable finance actually means. The purpose of this paper is therefore to provide a comprehensive overview of the different components of sustainable finance. In particular, it aims to provide frameworks that help the reader to understand better what sustainable finance can be. It also proposes tactics to work towards more effective strategies for financial institutions, and proposes questions that aim to advance academic research in the field of sustainable finance.

Jaeggi O., Webber Ziero G., Tobin-de la Puente J., Kölbel J.F. (2018) Understanding Sustainable Finance. In: Wendt K. (eds) Positive Impact Investing. Sustainable Finance. Springer, Cham

© Springer International Publishing AG, part of Springer Nature 2018



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