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What Do We Mean by Sustainable Finance? Assessing Existing Frameworks and Policy Risks

Author

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  • Marco Migliorelli

    (IAE Paris - Sorbonne Business School)

Abstract

I observe that the sustainable finance landscape as it stands today is featured by an overabundance of heterogeneous concepts, definitions, industry and policy standards. I argue that such heterogeneity may hinder the smooth development of the conceptual thinking underpinning sustainable finance and originates specific risks that may harm the credibility of the nascent market. These risks include green and sustainable washing, the rebranding of financial flows without additionality, the disordered adjustment in the cost of capital spreads between industries. I argue that to reflect the actual industry and policy context as wells as to steer conceptual and applied practice sustainable finance should be today referred to as "finance for sustainability". To this extent, both its definition and implementing standards should make clear reference to the relevant sustainability dimensions (in particular in line with the Sustainable Development Goals and the Paris Agreement) and to the sectors or activities that positively contribute to these dimensions.

Suggested Citation

  • Marco Migliorelli, 2021. "What Do We Mean by Sustainable Finance? Assessing Existing Frameworks and Policy Risks," Post-Print hal-03476960, HAL.
    • Handle: RePEc:hal:journl:hal-03476960
    DOI: 10.3390/su13020975
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    Cited by:

    1. Júlio Lobão, 2022. "Herding Behavior in the Market for Green Cryptocurrencies: Evidence from CSSD and CSAD Approaches," Sustainability, MDPI, vol. 14(19), pages 1-17, October.
    2. Gabija Simaite & Greta Keliuotyte-Staniuleniene, 2023. "Financial sustainability and derivatives: a theoretical approach," Technium Social Sciences Journal, Technium Science, vol. 39(1), pages 370-376, January.
    3. Christoph Nedopil & Truzaar Dordi & Olaf Weber, 2021. "The Nature of Global Green Finance Standards—Evolution, Differences, and Three Models," Sustainability, MDPI, vol. 13(7), pages 1-23, March.
    4. Małgorzata Janicka & Artur Sajnóg, 2022. "The ESG Reporting of EU Public Companies—Does the Company’s Capitalisation Matter?," Sustainability, MDPI, vol. 14(7), pages 1-17, April.
    5. Adriana Kocornik-Mina & Ramon Bastida-Vialcanet & Marcos Eguiguren Huerta, 2021. "Social Impact of Value-Based Banking: Best Practises and a Continuity Framework," Sustainability, MDPI, vol. 13(14), pages 1-40, July.
    6. Gimede Gigante & Emiliano Sironi & Caterina Tridenti, 2023. "At the Frontier of Sustainable Finance: Impact Investing and the Financial Tradeoff; Evidence from Private Portfolio Companies in the United Kingdom," Sustainability, MDPI, vol. 15(5), pages 1-21, February.
    7. Zsuzsanna Győri & Yahya Khan & Krisztina Szegedi, 2021. "Business Model and Principles of a Values-Based Bank—Case Study of MagNet Hungarian Community Bank," Sustainability, MDPI, vol. 13(16), pages 1-27, August.
    8. Hilbrich, Sören, 2021. "What is social finance? Definitions by market participants, the EU taxonomy for sustainable activities, and implications for development policy," IDOS Discussion Papers 29/2021, German Institute of Development and Sustainability (IDOS).
    9. Liudmila I. Khoruzhy & Valery I. Khoruzhy & Bogdan S. Vasyakin & Wenhao Shen, 2022. "Program-Targeted Approach to Managing Financial Risks of Sustainable Development Based on Corporate Social Responsibility in the Decade of Action," Risks, MDPI, vol. 10(3), pages 1-20, March.
    10. Aghilasse Kashi & Mohamed Eskandar Shah, 2023. "Bibliometric Review on Sustainable Finance," Sustainability, MDPI, vol. 15(9), pages 1-30, April.
    11. María Jesús Segovia‐Vargas & I. Marta Miranda‐García & Freddy Alejandro Oquendo‐Torres, 2023. "Sustainable finance: The role of savings and credit cooperatives in Ecuador," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(3), pages 951-980, September.
    12. Maymunah Abdullatif Alismail & Abdulmohsen Saud Albesher, 2023. "Evaluating Developer Responses to App Reviews: The Case of Mobile Banking Apps in Saudi Arabia and the United States," Sustainability, MDPI, vol. 15(8), pages 1-24, April.
    13. Ozili, Peterson K, 2021. "Making sustainable finance sustainable," MPRA Paper 109924, University Library of Munich, Germany.
    14. Olatunji Abdul Shobande & Joseph Onuche Enemona, 2021. "A Multivariate VAR Model for Evaluating Sustainable Finance and Natural Resource Curse in West Africa: Evidence from Nigeria and Ghana," Sustainability, MDPI, vol. 13(5), pages 1-15, March.
    15. Jorge Luis García & Ignacio de los Ríos, 2021. "Model to Develop Skills in Accounting Students for a 4.0 Industry and 2030 Agenda: From an International Perspective," Sustainability, MDPI, vol. 13(17), pages 1-31, August.
    16. Milena Kowalska, 2021. "The Relationship between Income Inequalities and Economic Growth: New Evidence," European Research Studies Journal, European Research Studies Journal, vol. 0(3B), pages 152-164.
    17. Jens Teubler & Sebastian Schuster, 2022. "Causal Strands for Social Bonds—A Case Study on the Credibility of Claims from Impact Reporting," Sustainability, MDPI, vol. 14(19), pages 1-29, October.
    18. Augustinas Maceika & Andrej Bugajev & Olga Regina Šostak & Tatjana Vilutienė, 2021. "Decision Tree and AHP Methods Application for Projects Assessment: A Case Study," Sustainability, MDPI, vol. 13(10), pages 1-33, May.
    19. Daniela Kletzan-Slamanig & Angela Köppl, 2021. "The Evolution of the Green Finance Agenda – Institutional Anchoring and a Survey-based Assessment for Austria," WIFO Working Papers 640, WIFO.

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