Most people are aware of the growing challenges from climate change, social inequality, environmental degradation, greenhouse gas and exhaustion of national resources, but not everyone is able to act responsibly and make an effort to address, mitigate and eliminate these challenges. As our financial systems can influence the current economic model and shape the world we live in, finance is found to be the primary lever to achieving sustainability. With this knowledge, governments, corporations, organizations and associations are pivoting toward sustainable finance and environmentally positive business practices.
Sustainable finance refers to the inclusion of environmental, social, and governance (ESG) criteria in business or investment decisions for the long-lasting benefit of clients, partners, stakeholders, and society at large. Such eco-friendly business practices can cover a broad spectrum of business, from internal strategies to business projects to green financing and investing. Businesses worldwide are increasingly looking for ways to integrate sustainability performance into their core business strategy.
While some individuals and businesses see the transition to green production as an additional cost, sustainable finance can help break this trend and make the transition to environmentally positive business practices and consumption a new opportunity, not a cost,” says the Financial Regulatory Commission.
Businesses need to embrace sustainability for their future success. Without a doubt, some might stop before trying as they fret the journey of seeking out sustainable finance, especially in Mongolia where the culture shift is just budding. However, it’s rather the opposite. Financial institutions and organizations are more likely to ramp up their support for businesses that incorporate ESG and contribute to the prevention of undue environmental and societal damage in the long run.