In the wake of the 2007–08 global financial crisis, green finance has been increasingly celebrated as a way to tackle environmental challenges. Banks, investment funds and insurers have rolled out a growing range of green products, from green bonds to sustainability-linked loans. This momentum is encouraged by international environmental efforts such as the Paris climate agreement.
In the wake of the 2007–08 global financial crisis, green finance has been increasingly celebrated as a way to tackle environmental challenges. Banks, investment funds and insurers have rolled out a growing range of green products, from green bonds to sustainability-linked loans. This momentum is encouraged by international environmental efforts such as the Paris climate agreement.
By aligning financial flows with sustainability goals, the world can supposedly «green finance» its way into a sustainable future.
But beneath this green spectacle lies a more complicated reality. Green finance refers to a wide-ranging mix of private and public funds, products and practices. For example, there’s no consensus regarding what makes a bond green.
There is also little clarity around what current environmental, social, governance (ESG) frameworks—which encourage businesses and authorities to disclose and monitor their environmental and social performance—are truly achieving.
Green Your Money is a new series from the business and environment teams at The Conversation exploring how to make money really matter. Practical and accessible insights from financial experts in the know.
In 2015, the former Bank of England governor and current Canadian prime minister, Mark Carney, insisted that finance can and must urgently account for climate risks. Meanwhile, Stuart Kirk, former global head of responsible investments at high street bank HSBC, argued that these risks were overstated and too far in the future to be material.
