16 January WHAT IS SUSTAINABLE FINANCE?

Le financial sector has a major role to play in the ecological transition. This sector has started to to reform for respect the first international treaty aimed at reducing global greenhouse gas emissions from fossil fuels: Paris Climate Agreement. 

However, even if transformations have been put in place since the signing in 2015, the measures are not sufficient and the financial sector and companies must continue to increase their efforts. Indeed, according to the Carbon Disclosure Project, a global non-profit organization, less by 1% of assets under management were aligned with this Paris agreement at COP26 in October 2021. 

Iinvest in more responsible projects with clear environmental and social benefit objectives, stop funding and to invest in fossil energies, are ambitious projects that will align with the Climate Agreement.  

>> Sustainable finance

Sustainable finance refers to all financial practices that take into account extra-financial criteria such as the preservation of the environment or social issues. It can be defined by investments and investments that combine both economic performance and achievement social/societal and environmental objectives.

The goal of responsible finance is to support all categories of actors (companies, foundations/associations, organizations and public authorities) working for a more responsible world. 

Thus, sustainable finance brings together different practices:

>> Responsible investment 

Le SRI label (Socially Responsible Investment) awarded by independent bodies is a benchmark for savers. It imposes an obligation of reinforced transparency such as, for example, the communication to investors of the fund strategy and objectives. The funds which are set up within the framework of this type of investment choose the projects to be supported on the basis of ESG criteria to guide them :

- Environmental criterion : taking into account the reduction of GHG emissions, the treatment of waste and the prevention of risks for the environment.
- Social criterion: staff training, accident risk prevention, workers' rights, social dialogue, subcontracting.
- Governance criterion : status and independence of the Board, structural organization of management, monitoring committee and account verification.

>> Choose a bank with a positive impact

They are alternatives to traditional banks to invest your money responsibly and avoid, for example, the financing of fossil fuels. On Takagreen, find green banking providers enabling users to put their money to work for the planet in the Impact Banking subcategory.

>> Crowdfunding (participatory finance)

Responsible crowdfunding or crowdfunding is a solution that allows entrepreneurs to collect the funds necessary for the creation or development of their project with an environmental or social dimension. 

For investors, this makes it possible to support committed companies, to reconcile investment and meaning. Go to the responsible crowdfunding sub-category to discover investment platforms in positive impact projects.

Resources
https://www.usinenouvelle.com/editorial/cop26-le-tres-lent-alignement-des-fonds-collectifs-avec-l-accord-de-paris-sur-le-climat.N1155512
https://observatoiredelafinancedurable.com/fr/presentation/la-finance-durable/
https://www.lelabelisr.fr/quest-ce-que-lisr/
https://www.lecourrierfinancier.fr/responsabilite-sociale/breve/etude-climat-le-secteur-financier-sous-estime-les-risques-les-plus-importants-69520