Sustainable Finance Blog 2 – Why Sustainable Finance?

-

My first blog of sustainable finance gives you a brief introduction to sustainable finance. The second blog will give you a general idea of why people choose sustainable finance.

Sustainable finance based on the sustainability, which means in financial activities, people should consider the needs of future generations, rather than short-termism. This could be regard as the ultimate reason of sustainable finance. International Platform on Sustainable Finance (IPSF) established for the services of countries in the world for exploring better sustainable finance. Therefore, at the level of human beings or state, we can say sustainable finance is for:

Having a sustainable development in long-term period

If you access the website of banks or investment companies, sustainable finance of investment is now definitely displayed with prominently:




For financial product providers, sustainable finance is not only could attractive potential sustainability investors, but also bring them other benefits such as better financial performance in general (Ortas, et al., 2015; Lee, et al., 2016) and risk reduction (Jansson & Biel, 2011). As more and more academic researchs and famous financial insituations like Morgan Stanley (2019) claim mutli advantages of sustainable finance, the relevant stocks, funds, portfolios are becoming popular and promted. Excepts these, engaging with sustainable finance could build a good reputation and image of bank or company. For some sustainability projects, government will provide welfare like discount or particular policy. Therefore, at the level of financial products providers, sustainable finance is for:

Better financial performance, reputation, and more sources

Naturally, with the overwhelming coverage about sustainable finance, most of investors show great interest in sustainable finance and belief it will earn. Of course, there are also investors purely seek opportunities of helping sustainable development; interestingly, these investors are more focus on self-value achievement and has higher risk tolerance to their sustainable investment (Paetzold & Busch, 2014). Therefore, at the level of investors, sustainable finance is for:

Better earning opportunity, realization of self-value

Generally speaking, sustainable finance nowadays takes sustainability as the core, different groups based on this core enjoy the benefits its extents.

References

Jansson, M. & Biel, A., 2011. Motives to engage in sustainable investment: A comparison between institutional and private investors. Sustainable Development, 19(2), pp. 135-142.

Lee, K.-H., Cin, B. C. & Lee, E. Y., 2016. Environmental Responsibility and Firm Performance: The Application of an Environmental, Social and Governance Model. Business Strategy and the Environment, 25(1), pp. 40-53.

Morgan Stanley, 2019. Sustainable Reality, s.l.: Morgan Stanley.

Ortas, E., Álvarez, I. & Garayar, A., 2015. The Environmental, Social, Governance, and Financial Performance Effects on Companies that Adopt the United Nations Global Compact. Sustainability, 7(2), pp. 1932-1956.

Paetzold, F. & Busch, T., 2014. Unleashing the Powerful Few: Sustainable Investing Behaviour of Wealthy Private Investors. Organization & Environment, 27(4), p. 347–367.

Comments

Post a Comment

Popular posts from this blog

The Value Creation of Company

-
Image
Things have not been good for Victoria's Secret (VS) in 2020. With revenues falling by years and the impact of epidemic, its owner Leslie Wexner, is considering a ‘potential sale’. Before that, VS had experienced two booms. The first was when its founder, Raymond, opened a store that sells women underwear to men in 1977. He earned $500,000 first year. But it did not last long, a sales bottleneck occurred. Its strategy of making men its main customers led to women could not accept it, and there were limited number of male customers. After 1982, Raymond sold VS to Wexner, VS’s sales model focuses on female customers. Wexner led VS toward luxurious and noble route. This marks the beginning of another glorious in VS. From 2016, VS reached another turning point, sales revenue become stagnate and drop, share prices began to fell and shops closed. Until scandals surfaced of VS in 2020, it has hit the bottom again.   One shop of Victoria’s Secret, photo’d in Nanjing Both experienced
Read more

Why People in Finance Have So Much Money？

-
Image
 When people browsing the news in finance, the title with an unbelievable mount of money can always catches their eyes, for example: ‘Stanhope merges with FWM to create $24.2bn wealth manager’ And people could see that: London-based Stanhope runs $13bn in assets under management and oversees the investments of the Duchy of Lancaster, the £538m portfolio of property and financial assets owned by the Queen (Flood, 2020) . “ People in finance just have so many money” They might say something like this. The same thing happened to me, when the first time my relatives and mates know about that I am a student major in finance, they said: “That is great! You will be rich after you find a job.”   Some people think that those people who working in financial industry can earn a lot of money and have a higher wage standard compare with other industry. Imagine a person in a suit and working in office could completing transactions values of hundred million in a couple of minutes, how doe
Read more