2023-12-11 17:52:31
If some projects cannot see the light of day due to lack of funding, there is also a lack of viable projects. How to get out of this situation? If certain banking institutions have specialized in the ecological transition sector, how can we get the large general banks to move? Should this involve state regulation of loan granting criteria?
Despite the desire of many consumers to place “their savings towards projects that have a real societal and environmental impact“, the number of funded projects remains low as we have seen, from 1 to 5%
For Marek Hudon, “this is particularly linked to the lack, if not of transparency, but of international agreement on what is a sustainable investment“We have an environmental taxonomy in Europe,”which allows us to see more clearly, but we must go further” estimates Marek Hudon. If there are ESG criteria (Environmental / Social / Governance) for the financing of projects, these are very diverse. The same project can be rated very differently depending on the agency. “There is a need to have an agreement (on this problem) and regulations which must be more advanced and undoubtedly more restrictive“However, we saw the failure of NewB, an ethical and sustainable bank which aimed at societal change. Creating an alternative bank requires time and “a minimum size” linked to regulation and confidence in projects financed by the banking institution.
At the question “Would we live better without banks?“, Marek Hudon responds in the negative. But he believes that the current financial system must be radically reformed because there is a real gulf between the effects of announcements of moving towards more sustainability and the figures which show that the Fossil fuels are still as financed as ever. The challenge for the professor at the Solvay Brussels School of Economics and Management is surely at the level of their expectations of profitability.
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