Financial markets are the primary directors of economic activity in a capitalist global society, but they also have an important societal role in encouraging investments that are beneficial to natural and human ecosystems. Behavior is influenced by the availability and price of capital finance, and sustainability factors must be reflected in the world as understood by finance professionals to be real and not merely symbolic.
Financial sustainability in the long term
Financial sustainability means having sustainable assets and a sustainable financial system. If the financial system’s value system aligns with a more sustainable future it is more likely that companies will consider and implement environmentally positive innovations, and individuals will be more likely to act as stewards to our environment.
Economic growth and financial sustainability
Financial growth and sustainability cannot be separated. The current economic system is based on unsustainable resource consumption, growing pollution, and population growth. If these trends are not reversed, the world will not be able to maintain economic growth, and if it does, societies will face severe consequences.
"Unless business leaders understand and consider both financial markets and their impact on natural systems, the world is at risk of running out of natural capital and human capital, each crucial to sustaining human life and economic prosperity."
Written by Ishmita Vaish