A Sustainable Finance Industry in 2024

As the first page of the 2024 calendar turns, I found myself scribbling down resolutions that I hope to adhere to. Since joining the finance sector in 2023, I've been thinking about the many pledges the industry has made. And a notable one that I thought the finance sector might consider adding to its list: "This year, I will be more sustainable."

The finance sector is often been likened to the circulatory system of the global economy, and in 2023, seemed to have taken a green leaf out of its ledger books. 

With the backing of the International Financial Reporting Standards, firms are now simplifying and standardizing their approach to impact reporting. This is no mean feat – imagine trying to convince a room full of bankers to agree on where to go for lunch, let alone on international standards.

The Basel Committee on Banking Supervision also joined the party in late 2023 and threw a sustainability soiree of sorts; launching a consultation paper on the disclosure of climate-related financial risks. This is akin to a financial sector Apple Watch – tracking and disclosing steps taken towards sustainability. It’s not just about being good; it’s about showing and proving that goodness.

But why stop at reporting? The sector is realizing that it sits at the heart of the value chain and wields the financial influence necessary to steer the industrial economy towards sustainability. It’s not just about lending money; it’s about lending a hand to Mother Earth.

This is best reflected in the surge in membership within financial institutions committed to ambitious action on sustainable finance. Membership of the United Nations Environment Programme Finance Initiative reached a milestone of 500 banks and insurers in 2023 — and they’re not just talking the talk; they’re walking the walk too. 

“UNEP FI and its members took remarkable strides this year—from the progress of Principles for Responsible Banking signatories, continued expansion of the community working on implementing the Principles for Sustainable Insurance, to the ambitious achievements of the UN-convened net-zero alliances, we continue to see tangible action on financing to achieve sustainable development and net-zero goals. This momentum translated into membership growth across all our initiatives and frameworks, culminating in a significant milestone of 500 members. It’s a testament to our shared commitment and the growing recognition of the transformative power of sustainable finance.”  Eric Usher, Head of UNEP FI

98% have integrated sustainability oversight into their governance structure, with 91% at the board and CEO level. From banking to insurance, investment to policy-making, there's been a concerted effort to weave sustainability into the very fabric of financial operations.

The message is clear: if you’re greener, you’re cleaner, and in the world of finance, that’s becoming an increasingly lucrative badge of honor.

As we sip on our ethically sourced coffee and ponder what 2024 holds, let’s hope that the finance sector's resolution sticks. Maybe this will be the year when sustainability isn't just a buzzword but a baseline for business. 

And who knows? By next New Year's Eve, we might just be toasting to a finance sector that didn't just change its ways but changed the world.

So here's to a year of sustainable finance. After all, in the grand scheme of things, it’s not just about making money; it’s about making a difference. Cheers to that!