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Sustainable Finance

By August 7, 2023Blogs

Sustainable Finance

Forward-looking financial market structures require strategies to support the transition to a climate-friendly, sustainable, global economic and financial system. Achieving the Sustainable Development Goals, implementing the Paris Agreement, and successfully integrating ESG into banks and financial institutes, will depend upon the commitment of individuals, companies, and policymakers alike. EBTN and other global networks support this by exchanging knowledge and best practice in Sustainable Finance to fundamentally shift the way that the finance sector operates.

Whilst ESG is increasingly in the political spotlight, research from the European Commission finds that “the pace of implementation to achieve effective ESG integration within risk management, prudential supervision, and business strategies and investment policies needs to be accelerated. Collaboration between all stakeholders will be required, including sufficient supervisory guidance and engagement, and cross-bank collaboration.”[1]

This highlights the growing need for high-quality education and training in the field of Sustainable Finance to an appropriate level, with opportunities for employees in the banking and financial services sector to upskill and reskill in this area through flexible study and training programmes, for example through micro-credentials.

Alongside adequate and impactful training and education, there is a great need for a common language and understanding on how to drive change in the sector, but also practical, tangible, and clear tools that support stakeholders to turn policy into practice. In Europe, the EU taxonomy and sustainable finance framework form a key part of that toolkit, as they help direct investments towards economic activities that are in line with the aims and objectives of the European Green Deal.

In June 2023 the European Commission renewed and simplified its package of measures to bolster the sustainable finance framework and to support companies that are facing challenges with the new disclosure and reporting requirements.

Amongst other measures, the package aims to improve the reliability and transparency of ESG ratings activities via new organisational principles and rules, especially around preventing conflicts of interest, so that investors can make well-informed, sustainable investments. A challenge and priority for the sector going forward will be to ensure that banks, companies, and staff teams grow in their confidence and capacity to operationalise the policy.

Strategic Reflections

  • Sustainable finance regulation and ESG integration in banking business are becoming increasingly important and relevant.
  • The EU-Taxonomy is a significant development in sustainable finance, and it can help create a common language and standard for sustainability in financial products and services.
  • There is a need for education and training to develop ESG competencies in banks as the financial sector has an important role to play in the green transition towards a more sustainable future.
  • There is a need for practical tools, so that ESG risks and opportunities can be integrated into the decision-making processes of financial institutions to ensure long-term value creation and risk management.

[1] European Commission, Directorate-General for Financial Stability, Financial Services and Capital Markets Union, Development of tools and mechanisms for the integration of ESG factors into the EU banking prudential framework and into banks’ business strategies and investment policies : executive summary, Publications Office, 2021,

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