Sustainability has become a central concern for companies and investors around the world. The need to integrate environmental, social and governance (ESG) considerations into financial and business decisions has never been more urgent. Recently, Saint Paul Business School hosted the event “Sustainable Finance: The role of companies and opportunities in promoting sustainability in 2024”, with the presence of Denise Hills, Board Member, LinkedIn Top Voice and member of the Advisory Committee of the Ambição Net Zero Movement, and Jorge Louzada, Director of the high-impact Strategic Finance program for C-Level and Board Members.
BlackRock, the world's largest asset manager, is now positioning itself differently from the way it did a few years ago. While its reports used to focus on ESG impacts, today its focus is on financial resilience, which is a central theme in its guidance to invested companies.
During the event, essential concepts, challenges and bolivia whatsapp data opportunities involved in adopting financial practices that not only drive economic growth, but also protect our planet and promote the well-being of communities were discussed.
Key Concepts in Sustainable Finance
Denise Hills presented key concepts in sustainable finance, such as the materiality matrix, climate risk and the evolution of accounting standards to reflect sustainability issues. She emphasized the need to measure and incorporate these factors into financial and business decision-making.
We explain better what these factors are:
Materiality Matrix
The materiality matrix is an essential tool for identifying and prioritizing the most relevant ESG issues for an organization. It helps the company focus on the aspects that have the greatest impact on the business and are most important to stakeholders.
Climate Risk
Climate risk refers to the potential negative impacts of climate change on a company’s finances and operations. These risks can be physical, such as natural disasters, or transitional, related to changes in policies and technologies.
Evolution of Accounting Standards
Accounting standards are evolving to better reflect sustainability issues. Initiatives such as the International Financial Reporting Standards (IFRS) and the Sustainability Accounting Standards Board (SASB) are working to integrate ESG indicators into financial reporting.
Standards and Initiatives
IFRS: Developing standards for reporting sustainability information.
SASB: Offers industry-specific standards to help companies disclose their ESG impacts.