Sustainable Finance : Using the Power of Money to Change the World

This book provides a detailed yet succinct overview of sustainable finance, with a specific focus on its origins, its policy focus and the practitioner dimension. With fossil fuel companies still attracting investment and subsidy across the world, the book describes how we can reverse these incentives, using the power of finance to tackle the climate and ecological crises. The world of finance is moving beyond the era of ethical investment and into a future where all financial companies will have to report the climate impact of their investments. This is the first stage towards full-scale ESG reporting (Environmental, Social and Governance). Since financial reporting depends on information provided by companies who receive investment, this has huge implications for non-financial reporting by all large companies. The timeline for these legal changes is short for what will be a transformation of financial accounting and investment. The book also covers the related issues of climate finance and the role of central and public banks in funding the transition to sustainability, and how we can ensure accountability for countries bearing the brunt of the impact from those with the largest responsibility for historic emissions. This book will enable those working in these fields to update their knowledge and skills, and brings together the author's practical experience as an MEP with her academic insight as the first professor of green economics. Molly Scott Cato is Professor of Green Economics at Roehampton Business School, UK and was formerly a member of the European Parliament's Economic and Monetary Policy committee and its rapporteur on sustainable finance. She is a green economist and expert on cooperatives and social enterprise, sustainable finance, monetary policy and tax policy. Molly is the national Green Party speaker on finance and on Brexit Acknowledgements Prologue Contents About the Author Abbreviations List of Figures List of Tables 1 Why Sustainable Finance? Why Now? 1 All Hands to the Pumps 2 From Copenhagen to Paris—By Train 3 Stranded Assets and the Carbon Bubble 4 Divesting from Fossil Fuels 5 Wider and More Radical Action on Climate Finance 2 What Puts the Sustainable into Sustainable Finance 1 What Do We Mean by Finance? 2 More Key Questions and Definitions 3 Insuring and Evaluating the Risks 4 Hey Big Spender 5 My Name Is Bond, Green Bond 6 Where There’s Muck, There’s Brass—The Relative Performance of Green and Other Investments 7 Shifting the Big Bucks 3 The Chequered History of Climate Finance 1 What Is ‘Climate Finance’? 2 The Loss-and-Damage Agenda 3 Green New Deals 4 Climate Reparations or Empire 2.0 5 We Can Afford to Save the Climate 6 Principles of Climate Finance 4 Sustainable Finance: The Policy Framework 1 Feeding the Beast 2 Making the Polluters Pay Market-Based Pollution Permit Trading Environmental Taxes 3 Creating Sell-By Dates for Stranded Assets 4 Saving Life on Earth: The Biodiversity Crisis 5 Defining, Measuring, and Reporting Sustainability 1 Non-financial Reporting: Beyond the Bottom Line 2 Private Sector Leaders 3 How Much Do You Know About What Your Money is Doing? 4 Greenwashing 5 The Beginning of a Journey Towards Sustainability 6 The Role of Central and Public Banks 1 What Is the Role of Banks in a Climate and Ecological Emergency? 2 Banking Bad 3 Bank Stability and Sustainability 4 Central Banks as a Force for Good? 5 The Leadership Role of Public Banks 6 World’s Bank Missing in Action Epilogue Index