Sustainable finance generally refers to the process of taking due account of environmental, social and governance considerations when making investment decisions in the financial sector, leading to increased longer-term investments into sustainable economic activities and projects.
- Environmental considerations refer to climate change mitigation and adaptation, as well as the environment more broadly, such as preserving biodiversity, preventing pollution and promoting the circular economy.
- Social considerations refer to issues of inequality, inclusiveness, labour relations, investment in human capital and communities, and human rights issues.
- The governance of public and private institutions, including management structures, employee relations and executive remuneration, plays a fundamental role in ensuring the inclusion of social and environmental considerations in the decision-making process.