While the idea might seem new, sustainable finance has been around for more than two decades. In recent years, it has gained considerable ground because it upholds values that society insists on.
Nuria wants to get more out of her savings and is thinking about investing in a company that shares her ethical and environmental values. Such “socially responsible” investment is just one of many components of sustainable finance.
What is sustainable finance?
The economy plays a pivotal role in society and, therefore, must align with its needs. Sustainability is one of mankind’s biggest challenges. That means growing constantly without harm to the planet; reducing the devastation of climate change; and, in future generations, bridging the gap with more vulnerable groups.
To get where we need to be, the public and private sectors must work together, and we must all act responsibly. Banks are aware of the situation and have
From an ethical standpoint, sustainable finance means taking social and environmental factors into account in investment. Banking industry players have created products based on ESG criteria to meet the needs of customers who wish to invest more sustainably and help push society towards more responsible development.
ESG criteria refer to how companies operate. The initials mean:
Types of sustainable finance
Many financial products meet ESG criteria, so we can be sure they safeguard society’s interests and promote sustainable growth and development:
Want to find out more about sustainable finance? Read this article (in Spanish) by Finanzas para Mortales (Finance for Mortals).
Why invest in sustainable finance?
Banks are transforming to address society’s needs and concerns. Initiatives like the Net Zero Banking Alliance (NZBA), of which Santander is a founder member, are helping banks drive this change and shift their portfolios towards more sustainable products to reach net zero emissions.
Investors are not willing to compromise their ethical and environmental values. They prefer their portfolios include businesses with economic models that look out for the environment and society.
Studies show that people are demanding more sustainable finance. The Otro consumo para un futuro mejor (“Alternative consumption for a brighter future”) report by Nueva Economía e Innovación Social (NESI) and the Organización de Consumidores y Usuarios (OCU) concluded that, in countries like Spain, 73% of the population make financial decisions based on sustainability criteria.
Investments in sustainable finance pave the way to making a positive impact on the planet and society. They help businesses that are in favour of renewable energy and more solid and responsible economic models. To find out more about sustainable investment, check out this Openbank article (in Spanish).