Sustainable Finance and Green Financing

REVISION QUESTIONS

1. What is the definition of Sustainable Finance?

Sustainable finance is the application of the concept of sustainable development to financial activity. Sustainable finance aims to create value in the long term by directing capital towards activities that, in addition to generating economic surplus value, are also useful to society and not borne by the environmental system.

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2. How many and what are the most famous Sustainable Investment

Strategies?

The six most famous Sustainable Investment Strategies are:

- Exclusions

It’s an approach that provides for the explicit exclusion of individual issuers or sectors

or countries from the investable universe, based on certain principles and values. The

most used criteria are weapons, pornography, tobacco, and tests on animals.

- International Conventions

It’s a selection of investments based on compliance with international norms and

standards. For example: Global Compact, the OECD Guidelines on multinationals.

- Best in Class

It’s an approach that selects the issuers in the portfolio according to environmental,

social and governance criteria, favoring the best issuers within a universe or category.

- Thematic Investments

It’s an approach that selects the issuers in the portfolio according to environmental,

social and governance criteria, focusing on one or more themes. Ex: Climate change,

health, etc.

- Engagement

It’s an Activity that takes the form of dialogue with the company on sustainability

issues.

- Impact Investing

Investments in businesses, organizations and funds made with the intention of

generating a positive and measurable socio-environmental impact, along with a

financial return. Ex: Green or social bonds.