Reporting and sustainable finance
In response to the Paris Agreement, the financial system has a key role to play in the commitment to achieve carbon neutrality. In the journey towards a greener, more stable and transparent economy, there is a need to redirect private capital towards more sustainable investments, which requires a cross-cutting change in the current economic and financial model.
Sustainablefinance comprises financial products or services that consider sustainability criteria, namely Environmental, Social and Governance (ESG) factors. For investors this means integrating ESG criteria into investment decisions, resulting in long-term investments in sustainable activities. For companies, it means contributing to the integration of sustainable practices in order to achieve corporate sustainability. Today, the definition of sustainable goes beyond the end product to the entire supply chain, which includes aspects such as respect for human and labor rights and mitigation of the impact on biodiversity in the region.
Following the publication of the first Action Plan for Financing Sustainable Growth (2018), the development of the green financial sector has assumed unequivocal prominence as it has become one of the central themes on the European, and international, agenda. Since then, a number of legislative frameworks have been announced to provide the necessary tools for institutions to foster their link with sustainability and accelerate green finance - the taxonomy is one of the most significant developments in sustainable finance, which will allow investors and organizations to rank the degree of sustainability of economic activities as well as their investments.
In the course of 2020, the European Commission announced the launch of Europe's renewed Strategy for Sustainable Finance, which aims to provide the policy tools to further connect the financial sector and its stakeholders to sustainability, while addressing the recovery from the impact caused by the Covid-19 pandemic insurgency. The renewed strategy will focus primarily on three strands:
- Strengthen the foundations for sustainable investment by creating an enabling framework with the appropriate tools and structures. The vast majority of financial and non-financial companies are still too focused on short-term financial performance rather than on long-term development and sustainability opportunities and challenges.
- Increase opportunities for a positive impact on sustainability for citizens, financial institutions and companies. This second pillar aims to maximize the impact of the frameworks and tools created for green financing.
- Integration and management of climate and environmental risks in financial institutions and the financial system, while ensuring that social risks, where relevant, are duly taken into account.
Learn more about legislation and standards international standards in the area of sustainable finance
What is the role of the working group in this area
In order to empower companies in this direction, the sustainable finance working group, made up of companies from the financial sector and from other sectors of activity, aims to continue to monitor and contribute to the development of sustainable finance policies, develop knowledge, promote debate, and raise awareness among companies about the issues and challenges of sustainable finance.
- Improve the sustainablefinance.pt website
- Disseminate knowledge, promote debate, and raise awareness of the issues and challenges of sustainable finance.
- Development of a rationale/process for ascertaining materiality that can be a resource to support the definition of sustainability policies.
- Monitor and contribute to the development of sustainable financing policies.
Membership of the BCSD Portugal working groups is exclusive to member companies.
The Financing Sustainability newsletter is a new project of BCSD Portugal, carried out in partnership with EY and PLMJ, which will monitor the evolution of the various sources of financing available to finance the transition to sustainability in companies - subsidies (i.e. incentives), equity (i.e. capitalization instruments) and liabilities (i.e. debt instruments) -, at national and European level, so that companies associated with BCSD Portugal may have first-hand access to a diversified selection of funding opportunities for their sustainable investments, i.e. that adopt ESG criteria.
The sustainablefinance.pt website was recognized with the Euronext Lisbon Awards, in the Sustainable finance category, which distinguishes the initiative that shows the greatest positive impact on environmental, social or corporate governance matters.
The site already existed, but was recently updated under the BCSD Portugal's sustainable finance working group, and this effort was only possible thanks to the sponsorship of Altri, Crédito Agrícola, EDP and Millennium bcp and the support of PwC Portugal.
In addition to providing information on the latest developments in sustainable finance, case studies and other resources, one of the major highlights of the site's update is a search engine for funding opportunities and financial products.