Sustainable Finance and Investments

The financial services industry is essential for our transition to a sustainable economy. It requires financial systems that are resilient to a complex universe of environmental and social risks.

Sustainable finance refers to any form of financial service integrating environmental, social and governance (ESG) criteria into the business or investment decisions for the lasting benefit of both clients and society at large.

Investors are rapidly moving from a one-sided focus on financial returns to a broader consideration of creating and protecting long-term value. They are increasingly seeking to understand the Environmental, Social and Governance (ESG) risks and performance of the companies they invest in, and how these can impact returns over time.

Banks and asset managers increasingly evaluate business opportunities within ESG and review their operating models to ensure that sustainability matters and risks are adequately addressed.

Businesses are meanwhile ‘greening finance’ by integrating environmental and social factors into mainstream financial decision-making and ‘financing green’ by accelerating financing to deliver environmental and social objectives.

And finally, financial regulators and central banks are moving fast to foster an understanding of climate-related risks and their potential financial implications. The EU Taxonomy for Sustainable Activities is one of several actions aiming to redirect capital flows to sustainable investments in line with the European Green Deal.

Consumer preferences are tilting towards more climate-friendly products and brands to reduce their personal footprint. Companies are starting to commit to deliver their fair share of CO2 reductions to gain competitive advantage while investors look for sustainable companies to invest in. At the same time, politicians are raising ambitions and pushing regulation to reduce pollution and CO2 emissions.

”By investing in sustainable business models, banks and investors can reduce the negative ESG exposure of their lending and investment portfolios and encourage more responsible business practices.”

Helena Barton, Partner, Sustainable Finance and Investments Lead

Steering capital towards sustainable companies

The financial services industry has a crucial role to play in transitioning to a more sustainable world by steering capital away from the most polluting and irresponsible companies and towards those demonstrating environmental and social leadership. Financial institutions need to mobilise to fund a low-carbon future and global sustainable development.

How we can help

In Deloitte, we can help you determine how to contribute competitively to the transition into a sustainable, low-carbon economy by integrating ESG criteria into risk management, financing and investment strategies and by meeting the growing market demand for green and sustainable finance solutions. We can help you:

Integrate ESG criteria into financial decision-making
Navigate and prepare to meet regulatory requirements
Identify and measure financial risk from climate change
Carry out ESG due diligence
Develop financing strategies for green infrastructure and net-zero emissions
Deploy capital through measurable impact investments.

Want to know more? Find contact information below.