I am now convince of the potential of sustainable finance to drive positive change and contribute to a more sustainable future. 

I seems that one of the most impactful aspect of sustainable finance would be the ESG reporting and engagement. This two need to be intertwined to have the most optimised impact, because reporting/numbers are not useful if we do not plan to do something about it, and actions need to be measurable, so the companies/banks/governments are taken accountable of their actions. Assessment and commitment... yes ...but also accountability!

But this comes with limitations and challenges such as the lack of standardisation and transparency in ESG reporting, and the need to ensure that sustainable finance does not become a marketing tool or a form of greenwashing. 

Indeed, ESG reporting standardisation, for example, is a complex issue. 

How can you measure ‘’fairly’’ the real world impact of sustainable investments on social and environment outcomes? 

Different industries have different environmental, social, and governance risks and impacts, and this can make it difficult to develop standardised reporting requirements that are applicable to all companies. But how do you ensure it is fair to all markets? How to ensure equity? 

In my opinion, we should develop and make mandatory a template/standardise type of reporting but by implementing industry-specific ESG standard and universal reporting. The standards requirements would be applicable per industries, taking in account the unique characteristics and challenges of each sector, and regularly review as per the advancement of the market, by one same entity (to avoid intervention of potential lobby/limit risk). 

It already exist with the sustainability Accounting Standards Board (SASB) , they have developed industry-specific standards for more than 80 industries, which are designed to provide a standardised set of ESG metrics that are relevant and also comparable across all the sectors. 

But as point out in this Harvard article, ESG ratings are often based on subjective criteria, and that different rating agencies can come to different conclusions about the same company... how confusing! Hence, it reinforce the belief that the development of more consistent methodologies is required. 

It seems that ESG ratings do not always reflect a company's actual impact on society or the environment, and can be influenced by factors such as marketing and public relations.  Also, it will be essential to have third party inspection to ensure complete transparent and trusty informations. 

I do believe as well that the threat of divestment is powerful and impactful on sustainable finance. The only problem is that once you remove your shares from a company you loose your power, so the game of ''bluffing'' is risky. But divestment is sending a clear message that finding investors, getting social license to operate will be more and more complicate if this company does not make changes. It might help to enforce/ force engagement. (I also made an article about shareholder power :) ).

Bill Gates believe that it would be better to invest in technologies to slow emissions or to help people adapt to the effects of climate change.

In my opinion, ESG reporting is one of the most impactful tool, once standardised it will be a very powerful one, and it is the responsibility of all of us, policymakers, regulators, market participants, to work together to create and array a more sustainable financial system. 

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