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Writer's pictureSHIVA DAVE

What is Sustainable Finance and Why Does it Matter?

Shiva Dave

With the dawn of the industrial revolution, humans have depleted 1/3 of the earth's resources as we devoured them. To put it into perspective, if human life existed for 37 mins in a calendar year, we would have managed to deplete 1/3 of our resources in 0.2 seconds. The massive uncontrolled depletion comes with a heavy price to pay as we approach the verge of environmental and financial collapse. In contrast, the wealth of a few grows exponentially and enormously compared to the needs of many.

In the 21st century, while industries are booming like never before and technology is at its finest, we are again on the brink of another recession as diseases run rampant, causing damage despite our finest technologies and solutions. Not to mention the tremendous ecological catastrophes this century has brought, like the European heatwaves and Australian bushfires intensified by the lack of heed to real-world problems. The problem is not the lack of finances or technology. Our greed prevents us from investing in these technologies and solutions that would thwart and solve the crisis. Due to our society's capitalistic nature, we have no incentive to invest to avoid something unless it starts harming its industries and markets. Moreover, governments around the world follow this trend, as well as firms.

So, is the world just doomed? Not necessarily. In order to address the issues of 21st-century issues, sustainable finance can be our best hope forward.

A variety of actions fall under the umbrella of sustainable investment: from contributing money to green energy initiatives to buying stock in businesses that uphold ethical ideals like social inclusion or good corporate governance, including having more women on their boards of directors. In simple words, sustainable finance is a mindful way of approaching and taming our capitalistic system. so that contributions to humanity are made, and the needs of the many are prioritized against the wealth and vested interests of a few.

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