Abstract
The connection between the financial industry and sustainable development is indirect. The industry channels financial capital into different industries and therefore has an indirect effect on sustainable development through these industries. Depending on which client is financed the impact can be positive or negative. Therefore, the financial industry has developed strategies, products, and services to manage sustainability issues. Most of the products and services focus on risk management connected with risks that are material for financial institutions instead of managing risks for sustainable development. However, sustainability issues are dealt with in internal operations, credit risk management, socially responsible investing, and impact finance. Though products and services connected with sustainability are still marginal, their ratio is increasing and social banks that focus exclusively on sustainable products and services are growing significantly. Key challenges in the field of sustainable finance are to scale up the respective products and services, to focus on the creation of positive impacts on sustainable development through finance, to involve executive management representatives in sustainability issues, and to increase research about the connection between finance and sustainable development.
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Notes
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Weber, O. (2016). Finance and Sustainability. In: Heinrichs, H., Martens, P., Michelsen, G., Wiek, A. (eds) Sustainability Science. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-7242-6_10
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