What Do We Mean by Sustainable Finance? Assessing Existing Frameworks and Policy Risks

By Marco Migliorelli. 2021

153 citations recorded by the source corpus.

I observe that the sustainable finance landscape as it stands today is featured by an overabundance of heterogeneous concepts, definitions, industry and policy standards. I argue that such heterogeneity may hinder the smooth development of the conceptual thinking underpinning sustainable finance and originates specific risks that may harm the credibility of the nascent market. These risks include green and sustainable washing, the rebranding of financial flows without additionality, the disordered adjustment in the cost of capital spreads between industries. I argue that to reflect the actual industry and policy context as wells as to steer conceptual and applied practice sustainable finance should be today referred to as “finance for sustainability”. To this extent, both its definition and implementing standards should make clear reference to the relevant sustainability dimensions (in particular in line with the Sustainable Development Goals and the Paris Agreement) and to the sectors or activities that positively contribute to these dimensions.

Subfields: Finance, Global and Planetary Change, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/db1a2abfed71a33a62d1d6f3958cb8a3a3a54ab7

Citations in the corpus

Past, present, and future of sustainable finance: insights from big data analytics through machine learning of scholarly research (2022, unknown): “…as climate ﬁnance, carbon and ESG disclosure, green bonds, and socially responsible investment (Alsaiﬁ et al., 2020; Barua & Chiesa, 2019; Lokuwaduge & Heenetigala, 2017; Migliorelli, 2021; OECD, 2020; Widyawati, 2020), all of which can be covered under our umbrella deﬁnition of sustainable ﬁnance.”