Along with international commitments to promote green finance, the challenge of measurement and the danger of greenwashing arise
Do we have good news from the Madrid Climate Summit (COP25)? For those of us working on environmental impact reduction and green finance, this meeting has been a breath of fresh air. Areas that seemed totally alien to environmental sustainability are also seeking to renew the air they breathe. One of these is the world of finance, which occupied a large part of the summit.
Towards global "green finance
The road to environmentally responsible finance is fraught with obstacles and resistance. But some milestones of European or international scope can already be highlighted:
- 2014, October: A Directive of the European Parliament and of the Council of Europe extends non-financial (social and environmental) reporting requirements for large companies.
- 2018, March: The European Commission presents the 'Action Plan: Financing sustainable development'.
- 2018, December: 24th Climate Summit in Poland. Five international financial institutions commit to design and finance adequate services for a low-carbon economy.
- 2019, September: UN General Assembly in New York. 130 banks sign the Principles for Responsible Banking.
- 2019, December: Collective Climate Commitment, in the context of the 25th Climate Summit. 31 banks commit to develop the necessary methodologies to measure climate impact and alignment with global and local climate goals.
From theory to practice
A few weeks after the Climate Summit, the change in strategy of BlackRock, world leader in fund management and main shareholder of the Spanish bank, became known. In a letter, its CEO stated:
"We believe that sustainable investment will be the cornerstone of client portfolios from now on.Laurence D. Fink.
Environmental care has already gone from "trend" to "must".
The boom in green lending points in the same direction. It is not only companies developing clean energy that are targeted. Green loans are available to any company wishing to finance projects that reduce environmental impact. At the same time, these new forms of financing are a double-edged sword. There are those who call themselves sustainable without having the data to justify it. The European Commission is working on a regulation against "greenwashing".
Moving from theory to practice requires reliable measurement tools. The Climate Summit provided space for technological initiatives that facilitate this leap. There, we presented our proposal for measuring environmental impact. At GreeMko, we believe that measuring is the first step towards improvement. Through cutting-edge digital technology, they provide companies of any size or sector with justified access to green loans. Their software allows the global management of all the elements that cause an environmental impact.