At a time when public interest is increasingly focused on environmental issues , all sectors of the economy find themselves upset by this new prism of reflection. The finance industry is no exception. At the heart of the global investment mechanism, finance has partly adapted to these issues with the creation of Green Finance or Sustainable Finance . Although today it is still considered a niche market , Green Finance is experiencing unprecedented development, there are already today more than 170 investment funds in Europe relying on this finance of a new gender.
So how are these new investment funds and sustainable products changing the world of finance and investment?
What is Green Finance?
Green finance is a movement among global economic players which consists of having responsible investments for the environment by creating green bonds or green bonds . These bonds are issued by different economic actors. In the majority, it is the states that issue them. However, companies still represent 29% of these bonds issued.
Among the green financial products emanating from companies, two types stand out, those of companies which already operate responsibly for the environment today, but also those of companies which embark on energy and ecological transitions and which act to reduce their environmental damage.
Finally, this Green Finance represents financial activities that take into account socially responsible investment (SRI) but also traditional financial criteria . But above all, it is a state of mind that leads to the refusal to invest in companies that do not ensure ecological transition.
How do Green Finance funds work?
One of the personalities behind the impetus of Green Finance internationally is Laurence Douglas Fink, Chairman and CEO of BlackRock, the world’s largest asset management and investment company. Indeed, the so-called Larry Fink discovered a passion for the defense of the planet and, as a result, boosted the movement on the entire financial planet. Thanks to him, the institutional investors who manage the funds of millions of savers convert thanks to him to sustainable finance .
Many governments also support this action. France , Germany alongside various foundations have decided to join forces with BlackRock to found the Climate Change Partnership. The objective is to :
The funds thus generate financial products made up of shares and bonds on companies or public organizations most invested in the environmental cause. It is thanks to the transparency of its products that these funds manage to keep their investors. More transparent , more ecological and therefore more anchored in the spirit of the times, green finance is proving to be as profitable as traditional finance and this, while having a largely positive impact on the environment.
In France, the Banque Postale has established itself as a pioneer in the field, it now has 110 billion euros in assets in socially responsible investment (SRI) and aims to achieve 100% SRI. by the end of 2020.
The proliferation of green investments has led to the proliferation of labels to certify these funds. In 2019, the number of labeled funds doubled. In Europe it is the Belgian label, Towards Sustainability, which has established itself. However, the competition is fierce since everyone wants to stand out in this very dynamic sector. With the exception of the French label, the most important labels in Europe propose the exclusion of fossil fuels from financial products, which is a very important step in the transition from our Western mode of production.
Green Finance within a greener movement in France
The French government has set itself the objective of supporting this transition to Green Finance by pushing for the reorientation of investments in favor of the ecological transition . To do this, it has launched numerous financial support schemes through the investment for the future programme . France was also a forerunner in terms of the transparency of these financial products, it was the first to make the publication of climate objectives and the financial risks associated with the energy transition mandatory for investors. The challenge is to be able to put in place indicators to assess the involvement in the energy transition but also to stimulate investments in this direction. This also makes it possible to monitor financial flows in order to ensure their objective of ecological transition.
In this approach, France and the other European countries are supported by European Union initiatives such as the international awards for climate reporting. These awards allow financial institutions to highlight their reporting on ecological transition and to highlight leading companies in the field.
It is simply through these steps to enforce the agreements that were signed following the COP 21, both for banks, institutions and for businesses. The objective is to have a reduction in the emission of greenhouse effect and not to exceed an increase of 2°C by 2050.
In fact, the ecological changes in the world of finance reflect a change in our way of thinking and producing at all levels. Leading to a real wave of ecological transition, many startups are also going green, with real ecological objectives or even more simply eco-responsible production structures. Today, therefore, it is a matter of supporting all economic players in this transition to enable them to subsequently fit into the international financial model.
ESCadrille can act on this green finance
For more than 41 years, ESCadrille has distinguished itself as the junior enterprise for entrepreneurs . It has therefore specialized in supporting innovative start-ups , so ESCadrille has already acted on many occasions on ecological projects . Indeed, thanks to our Business Plan services, we have enabled entrepreneurs with responsible projects to develop their businesses. From this point of view, our junior company is positioned as a real opportunity for the dynamic companies of tomorrow.
This more responsible support is also strongly linked to the digitalization of companies which therefore manage to have lower environmental impacts, our digital transformation service is also a means of supporting our customers in their possible ecological transition.
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