Urban financing management
Introduction
Sustainable finance is a term coined by the European Commission[1] to refer to the inclusion, within any financial strategy, of ESG criteria (environmental, social and good governance) when making investment decisions.[2].
Following the Paris Agreement, the EU aims to reduce greenhouse gas emissions by 40%. It is determined that, to achieve these objectives, an additional investment of 180,000 million euros per year is required. With the aim of mobilizing private capital towards this type of sustainable investment, the EU presents a strategy on sustainable finance that allows laying the foundations for this type of financial products.[3].
Sustainable finance aims to enhance economic growth while reducing pressure on the environment, seeking to combat climate change or reduce the emission of polluting gases, among other objectives.
In the same way, they contemplate the inclusion of social criteria with the aim of moving towards the creation of economic models in which issues such as the reduction of the wage gap between men and women, the presence of women in management positions, non-discrimination of workers based on sex, age, ability or similar issues are respected.[4].
Regulation
On June 18, 2020, the European Union publishes the Regulation on the Taxonomy of Sustainable Finance, which establishes the framework and conditions that activities and investments must meet to be considered sustainable finance, as well as the degree of environmental sustainability of the investment.[5].
According to this taxonomy, for an economic activity or investment to be considered sustainable it must demonstrate that it contributes substantially to at least one of the six environmental objectives pursued by the regulation, that it does not significantly harm any of the other objectives and that it complies with minimal social safeguards.
These objectives are:
Sustainable finances have become one of the main tools to promote the transformation of the financial system and achieve the SDGs proposed in the United Nations 2030 Agenda.[6].
In the field of sustainable finance, financial intermediaries such as banks, asset managers, insurers, as well as companies and organizations, governments and regulators are involved; Likewise included in this area are products and services that are key to the transformation of financial systems under ethical and sustainability criteria.