Sustainable Finance for a Dust-Free Future
In the past few months there has been a new phenomenon in Bangkok and other major cities around the country: public awareness and knowledge with regard to air pollution has grown exponentially and people are demanding that action be taken. The public began a much-needed discussion about how to tackle the problems of air pollution and other environmental issues – all aspects are being scrutinized, from our currently lifestyles, to the way we conduct business. One element crucial to driving change is financing and this is where sustainable finance comes into play.
Sustainable finance is a concept that is gaining momentum and being embraced by the financial industry. It refers to any form of financial service that takes into account environment, social, and governance (ESG) criteria in their business or investment decisions. These decisions also look at the long-term objectives and public benefits rather than just the bottom line.
For example, decisions should be geared toward sustainable development that does not lead to social inequalities, or market distortions. In practice, this includes the concept of “green” finance where investors and capital raisings are geared toward projects and products that are environmentally and socially beneficial.
The EU has estimated that to be able to realize the Sustainable Development Goals – the blueprint for sustainable development adopted by United Nations member states in 2015 – annual investments in sustainable infrastructure worth around 4.7-6.7 trillion euros are needed across countries, sectors and industries until 2030. Globally, this number would be significantly much more.
As such, investors around the world are also becoming increasingly focused on the role of financing in supporting the development of innovative products that help economies as they transition toward a new economic model. Many have policies that now only permit them to invest in projects that meet the ESG criteria.
Sustainability is currently a growing trend and the United Nation’s Intergovernmental Panel on Climate Change (IPCC) report published last year highlighted the urgency with which we must tackle the issue of climate change. We have only around 12 years left before the trend is irreversible. Thailand should jump on the opportunity while, for the first time, it is not just fashionable, but a necessity to be environmentally conscious.
New job opportunities linking environmental scientists and sustainability engineers to the financial sector will gain traction. Environmental experts will work more closely with businesses and the financial industry. In transitioning to the new economy, technology will also be needed to develop innovative solutions in sectors such as energy and transport.
In other words, this new economy would entail a whole new ecosystem and those whose jobs were previously threatened by AI technology may find themselves with new job opportunities.
For now, let’s hope that our children would not have to grow up living indoors, surrounded by air filters and face masks. Let’s hope that the sum of our actions will result in a future with less dust and clearer, sunny skies. Unlike other fads and trends that come and go, for once, let’s hope this sustainable finance trend is one that is here to stay.