Sustainable Finance Regulation and Policy.
Expert-defined terms from the Professional Certificate in Sustainable Finance: Sustainable Finance and Sustainable Forestry course at London School of Business and Administration. Free to read, free to share, paired with a globally recognised certification pathway.
Asset Management #
Asset management refers to the management of investments on behalf of others #
This can include managing various types of assets such as stocks, bonds, real estate, and other financial instruments. Asset managers make investment decisions with the goal of achieving the best possible return for their clients while managing risk.
Carbon Offsetting #
Carbon offsetting is a practice where individuals or organizations compensate fo… #
This can include projects such as renewable energy, reforestation, or energy efficiency initiatives.
Climate Change #
Climate change refers to long #
term changes in temperature, precipitation, and other atmospheric conditions on Earth. It is primarily caused by human activities such as burning fossil fuels, deforestation, and industrial processes. Climate change has significant environmental, social, and economic impacts and is a key focus of sustainable finance and policy.
Corporate Social Responsibility (CSR) #
Corporate social responsibility is a business approach that integrates social an… #
CSR aims to create long-term value for society while also enhancing the company's reputation and competitiveness.
Divestment #
Divestment is the process of selling off investments in companies or industries… #
This can include divesting from fossil fuel companies, weapons manufacturers, or companies with poor human rights records.
Environmental, Social, and Governance (ESG) Criteria #
ESG criteria are a set of standards used by investors to evaluate the social and… #
These criteria help investors assess the sustainability and ethical practices of a company and make more informed investment decisions.
Green Bonds #
Green bonds are fixed #
income securities issued to fund projects with environmental benefits. These projects can include renewable energy, energy efficiency, sustainable transportation, and other initiatives that contribute to environmental sustainability. Green bonds help channel capital towards sustainable investments.
Impact Investing #
Impact investing refers to investments made with the intention of generating pos… #
Impact investors seek to address social and environmental challenges through their investment decisions while also achieving a financial return.
Materiality #
Materiality refers to the significance or importance of an issue within the cont… #
In sustainable finance, materiality assessments help identify the environmental, social, and governance issues that are most relevant to a company's long-term performance and value creation.
Net Zero #
Net zero refers to achieving a balance between the amount of greenhouse gases em… #
This can be achieved through reducing emissions, offsetting remaining emissions, and investing in carbon removal technologies. Net zero is a key target in combating climate change.
Renewable Energy #
Renewable energy is energy derived from natural resources that are replenished o… #
Renewable energy sources are considered more sustainable and environmentally friendly than fossil fuels, as they produce lower greenhouse gas emissions.
Socially Responsible Investing (SRI) #
Socially responsible investing is an investment strategy that considers both fin… #
SRI aims to generate positive social change through investment decisions while also achieving competitive financial returns. SRI often involves avoiding investments in companies that engage in harmful practices.
Stakeholder Engagement #
Stakeholder engagement is the process of involving individuals or groups who are… #
In sustainable finance, stakeholder engagement helps companies understand and respond to the needs and expectations of various stakeholders, including investors, employees, customers, and communities.
Sustainable Development #
Sustainable development is a development approach that meets the needs of the pr… #
Sustainable development considers economic, social, and environmental factors to ensure long-term prosperity and well-being for all.
Sustainable Finance #
Sustainable finance refers to financial activities that integrate environmental,… #
Sustainable finance aims to promote sustainable development, address climate change, and achieve positive social impact through finance and investment practices.
Sustainable Finance Regulation and Policy #
Sustainable finance regulation and policy encompass laws, regulations, and guide… #
These regulations aim to promote sustainable finance practices, enhance transparency, and mitigate risks related to sustainability issues.
Transition Risk #
Transition risk refers to the financial risks associated with the transition to… #
Companies and industries that are heavily dependent on fossil fuels or other unsustainable practices may face risks related to policy changes, market shifts, and technological advancements that push towards sustainability.
UN Principles for Responsible Investment (PRI) #
The UN Principles for Responsible Investment are a set of six principles that gu… #
The PRI initiative aims to promote responsible investment practices and contribute to sustainable development goals.
Water Stewardship #
Water stewardship is the responsible management of water resources to ensure sus… #
Water stewardship practices aim to address water scarcity, pollution, and other water-related challenges through conservation, efficiency, and collaboration.