The term ‘green revolution’ has been on the lips of industries and consumers alike for decades now, under various guises and umbrellas. Sustainability, ecological considerations and ethical consumption have all played some initial part in the prevalence of ‘green thinking’, but today it is climate change that takes centre stage. Even financial institutions are having to take great care in proceeding and growing, with sustainability concerns subsuming all industries. But how might a business in finance interpolate this new wave of green revolution?
The State of Play
The climate crisis has always been an inalienable fact, but the present state of climate change has eliminated all doubt from the equation. Successive congregations of nation states under COP have ultimately failed in properly addressing the scope of the issue at hand, with dire results in the form of increasingly wild weather events on all continents.
The severity of the climate crisis cannot be understated, and neither can the responsibility incumbent on each industry to meet it. With collective effort the only true route to changing course, the pressure on different sectors from consumers and the wider public is relatively even – besides which, there are key legal considerations to similarly bear in mind across sectors, as the government seeks to enshrine new legislation and regulation to improve sustainability on a national basis.
ESG and Sustainability
In order to meet rising pressures from both PR and legal perspectives, businesses in all sectors have been availing of a relatively new framework within corporate responsibility: ESG. ESG stands for Environmental, Social, and Governance, referring to a system by which organizations reckon with their own societal responsibilities on a local, national and international level.
Businesses consult with external advisors on ESG policy in order to chart an equitable path through the coming years and decades. While environmental change is the cornerstone of the current climate conversation, other aspects are no less important – and, indeed, more so for certain industries. The local pollutive impacts of manufacturing businesses are disproportionately affecting for residents and local ecosystems, while larger-scale corporations inherit a significant level of social responsibility regarding staff population.
Enacting Change in Finance
How does ESG apply to the finance sector, then – and what exactly can finance-oriented businesses enact in order to make a significant difference within or without their industry? There are, of course, direct changes any finance business can enact, that relate to the carbon footprint of said business’ offices.
Switching to a 100% renewable energy supplier can dramatically reduce the carbon emissions associated with running the business, as can transforming the business’ company car fleet into an electric one. Also, utilizing other sustainable alternatives offered by government programs can dramatically decrease pollution.
Environmental impacts extend out beyond these basic considerations, though, through the partners, suppliers and contemporaries associated with the business. Newer fintech organizations might be using third parties to manage blockchain-oriented enterprises, where utilizing the blockchain inefficiently can lead to high energy expenditure. Careful choice of other links in the chain can select for more environmentally friendly infrastructure, incentivizing industry-wide adoption of greener measures.