Green finance, EIB European Investment Bank, UN United Nations, Kyoto Conference, climate change, sustainability, technical efficiency, environmental pollution, energy production, CO2 emissions, green bank lending
The ideas and goals of the United Nations (UN) in the areas of environment and development are at the origin of environmentally friendly finance, or green finance. In 1992, 178 countries met in Rio de Janeiro, Brazil, to discuss environmental and development issues for the 21st century. Fundamental agreement was reached on the intention to aim for sustainable economic development on a global scale. This involves economic efficiency, ecological sustainability and social justice.
[...] The demand for sustainable products will continue to grow and regulatory measures will support this process. A global platform that shares European knowledge and experience outside the EU will play a decisive role. It is up to each company or investor to decide whether they want to actively participate in this change or whether they prefer to take a wait-and-see position or decide not to do anything at all. Change processes often require a lot of resources and time to implement and are rarely straightforward. [...]
[...] In practice, solvency and sustainability margin grids are often combined. (ICMA, 2018) A variant in this context is the "Positive Incentive Loan", i.e. a bank loan that offers interest rate incentives for a company's sustainability rating to improve. To do this, the borrower is assessed by an independent agency. If the company can improve its rating during the term of the loan, the credit margin decreases by a few basis points and vice versa. This should be an incentive for the company to improve its sustainability performance, not to deteriorate it. [...]
[...] More and more citizens therefore want to act at their level. First as a consumer, but also as a saver. Green finance is not just for large hedge funds. Everyone, through their choice of savings accounts, can opt for a banking product geared towards sustainable development. (European Union, 2019) Climate Risks and Opportunities as a Model for the Future The actual consequences of climate change are difficult to predict, we can only work with models. Understanding climate risks seems to be a good first step to prepare for the future. [...]
[...] (European Union, 2019) The use of funds from green finance is greener when it changes the economic process and structures towards a climate-neutral and environmentally friendly economy. Investments, projects and measures that focus on the use of renewable and clean energy in particular and the use of renewable resources in general are therefore particularly green. Through this approach, green finance also contributes to the achievement of some of the 17 UN Sustainable Development Goals. (United Nations, 2015) Different Forms of Sustainable Finance Green economics and finance operate in a three-dimensional space. Dimension 1 is the nature of the sustainable project, e.g. [...]
[...] Thus, green finance and green financing originate in development cooperation between states and the private sector for the financing of environmental measures or projects, in particular for climate protection. The complementary objective of social finance is to accelerate the process of change desired by society towards a social economy that respects human rights, by directing financial flows preferably towards investments that contribute to improving the social situation of people. Dimension 2 There are thus several areas in which green finance can be achieved. But not all projects are green to the same extent. [...]
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