Counting the impact: Is it really possible?

“The business of doing business is business” is an age-old conventional approach of the functioning of businesses around the world, which has to change foremost. In the post-pandemic period, you might have surely heard the term, ‘greenwashing’, a savior wherein businesses portray themselves to be following ethical and sustainable practices in order to achieve a larger-collaborative agenda. It’s veritably likely that businesses use this as a marketing gimmick or a way to overshadow the hazards it’s causing. What you might be wondering is if it’s really possible to count the ill effects being caused to the environment? Clearly, it’s possible with the new propositions and research being pursued on a diurnal basis.

Did you know that what you invest in could have an impact much further than what you could have imagined? Or your investment could have an impact on the entire frugality to stabilize it? One similar intriguing and essential concept for a better ever-growing model is sustainable finance. 

Sustainable finance is a means to bridge the gaps of inequality between the economy, society and the governance model. It’s an evolved term from green finance. Sustainability is piercing in each and every organisational activity, making it a ‘better late than never’ situation to bring about a change. Sustainable finance refers to the process of taking environmental, social and governance (ESG) considerations into account when making investment opinions in the fiscal sector, leading to further long- term feasible investments in sustainable profitable projects and systems.

Environmental considerations include the impacts on climate change, pollution and biodiversity threats. Social considerations relate to issues of inequality, inclusiveness, labour practices, education, upliftment of backward societies, investment in human capital and communities, as well as human rights issues. The governance of public and private institutions – including operation structures, employee relations and administrative remuneration, policies for monitoring, regulations etc. – plays an aberrant part in icing the addition of social and environmental considerations in the decision-making process. 

Now you may ask why sustainable investments? To add to the explanation, there are three simple and short reasons. First, it’s ethical and for the future of our children and planet. Second, it serves as a means of risk mitigation in an ever-dynamic and evolving world. Third, the impact it creates leads towards a positive change in functioning of the corporations. Many important business stakeholders consider sustainability as a criteria in their checklist so that the investment takes into account the ESG factors

Yet again coming back to the question. Is it really possible? Carbon taxing is one similar illustration, wherein the companies are held responsible for their carbon emissions and have to pay penalties on their emissions and are encouraged to borrow alternate practices. Such deductions are shown in the books to find out the real costs and impacts created thereof. Another factor is changing client perceptions. Consumers prefer to buy from those businesses which share the same values, and are ethical and socially evolving, leading towards a sustainable future.

This is the time for action to incorporate sustainable finance in every business practice more than ever, as every investment and action counts! Hence a sustainable finance system must be lived and big leaders should pave the way for the arising associations to acclimatize this practice.

(Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer)

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