Earth Day has become a significant event for people all around the world to take a moment and consider the impact that human activities have on the environment. As individuals and within businesses, we all have a role to play in protecting our planet for future generations. Financial services firms can play a key role in this effort, as they are uniquely positioned to drive sustainable business practices and to help companies navigate the regulatory hurdles they may face.
Diane brings over 30 years of global experience in business transformation, operational and process redesign, sourcing, procurement and ESG.
This year, the theme for Earth Day is: Invest in our Planet, with a focus on trying to reduce and reverse the global effects of climate change. Waste management, carbon reduction, and sustainable farming are all publicised areas of this initiative, but one area that sometimes can be overlooked is how firms also can have a huge impact on the planet.
Being green in financial services
One of the most significant implications of Earth Day for the financial services sector is the growing demand for sustainable investment products. Investors are increasingly seeking out organisations that align with their values, including ones that promote environmental sustainability. This trend has been driven in part by a growing awareness of the risks associated with climate change, such as the physical risks posed by extreme weather events and the transition risks associated with a shift towards a low-carbon economy.
To meet this demand, financial services firms are developing a range of sustainable investment products including green bonds, impact funds, and ESG (environmental, social, and governance) focused funds. These products are designed to provide investors with opportunities to invest in companies and projects that have a positive impact on the environment and society whilst also delivering competitive financial returns.
Beyond investment products, financial services firms are also playing a key role in driving sustainable business practices. This includes providing financing for renewable energy projects, sustainable agriculture, and other environmentally friendly initiatives. By financing these projects, financial services firms are helping to promote the transition to a low-carbon economy and reduce the impact of human activities on the environment.
Complexity with regulatory factors
However, implementing sustainable business practices is not always straightforward. Companies may face regulatory hurdles, particularly in industries that have historically been associated with high levels of carbon emissions.
Despite these challenges, there are many ways that companies can contribute to sustainable business practices. One of the most effective ways is by setting ambitious sustainability goals and tracking progress towards these goals. With more and more companies aligning with SBTi’s and the UNGlobal Compact, business driven sustainability is becoming increasingly prevalent throughout the industry.
Creating a sustainable supply chain
Companies can also work to reduce their environmental impact by implementing sustainable supply chain practices. This includes working with suppliers to reduce waste and emissions, sourcing materials from sustainable sources, and reducing the use of single-use plastics.
In addition to these steps, companies can also work to engage with stakeholders, including investors, customers, and employees. This can include sharing information about sustainability efforts, providing education and training on sustainable practices, and collaborating with other companies and organisations to promote sustainability initiatives.
Regulators have an important role to play in promoting sustainable business practices. Governments can provide incentives for companies to invest in renewable energy and other sustainable initiatives, as well as implementing regulations and standards that promote sustainable practices. For example, EU Taxonomy and ISO 20022 can help drive accountability and promote transparency.
How Delta Capita can help
Delta Capita offers ESG Strategy and Regulatory consulting services that provide insight, capacity, and expertise to help companies maintain their commitment to global sustainability objectives and comply with regulatory requirements.
To find out more about Delta Capita’s ESG consulting services, contact us today.