Sustainable finance: laying the foundations for a booming industry

Sustainable finance encompasses a wide range of financial practices, products, intermediaries, regulation and rating agencies. The field of sustainable finance is boiling, with the constant emergence of new actors, products or standards. This growth has been especially progressive since 2015, when the Paris Agreements were signed and the UN 2030 Agenda containing the Sustainable Development Goals (SDGs) was published. For example, in 2020 assets under management in sustainable investment reached 35% of total assets, being the management category that grew the most (Global Sustainable Investment Alliance, 2020). On the other hand, green bond issuances increased by 49% in the five years prior to 2021 (Climate Bonds and World Bank), while the volume of impact funds amounted to 2.3 trillion dollars (International Finance Corporation). In parallel, the new European regulation, especially the Green Taxonomy (2020) and the requirements of art. 8 of the SFDR (Sustainable Finance Disclosure Regulation) to qualify a fund as sustainable, have caused important movements in the fund management industry to adapt to the new regulatory scenario.

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