Sustainable Finance Blog 4 – Sustainable Finance in Other Region

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According to the data of The Global Sustainable Investment Alliance (2021), majority of sustainable assets are in US and Europe. In other region such as Asia and developing countries, sustainable investment seems not so popular and only account for few parts of global sustainable assets.

Herringer, et al. (2009) points out that the success of sustainable finance is depend on whether local government has solid understanding of the concept and ability of overcoming the challenges in sustainable finance. In Maslow's hierarchy of needs (Maslow, 1943), need for self-actualization is in a high level, which means people need to meet the demand of physiological and safety first, or, the need for sustainable finance would not occur. Any regional crisis or economic backwardness will become an obstacle to the development of sustainable finance locally. For example, when the panic is coming, the flight of capital will only poor the local economic, rather than consider whether a project is sustainable. In some developing countries, sustainable finance even would cause more pressure in human capital or human right (Soederberg, 2007), so filter it would be a better choice.

Generally speaking, sustainable finance tends to generate positive impacts. Although results seemed to vary widely across countries nowadays (Chelawat & Trivedi, 2016), for achieving the goal of sustainability, a peaceful and stable environment of social and economy is necessary, that is also critical factors for finance to generate benefits for people.

References

Chelawat, H. & Trivedi, I. V., 2016. The business value of ESG performance: the Indian context. Asian Journal of Business Ethics, 5(1), p. 195–210.

Herringer, A., Firer, C. & Viviers, S., 2009. Key challenges facing the socially responsible investment (SRI) sector in South Africa. Investment Analysts Journal, 38(70).

Maslow, A. H., 1943. A theory of human motivation. Psychological Review, 50(4), p. 370.

Soederberg, S., 2007. Socially responsible investment and the development agenda: peering behind the progressive veil of non-financial benchmarking. Third World Quarterly , 28(7), pp. 1219-1237.

The Global Sustainable Investment Alliance, 2021. Global Sustainable Investment Review 2020, s.l.: The Global Sustainable Investment Alliance.

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