An emerging field in finance is the intersection between technology, sustainability and finance. As economies recover from the pandemic, this evolution is expected to accelerate as emphasis is placed on “building back better”, including through increased focus on environmental liabilities, brown and stranded assets, and measurement of carbon emissions, impact on biodiversity and use of scarce resources such as water.
How this translates into new fields of finance is still very much an evolving space, yet key focus areas are emerging, including green bonds, green loans, green listed equity, sustainability-linked products, standardisation of environmental, social and governance (ESG) disclosures, measurement of environmental liabilities and impact, stress testing of portfolios and exposures and carbon trading.
The intersection with technologies such as artificial intelligence, the internet of things (IOT) and blockchain is particularly exciting in the context of green finance, given the importance of measurement and disclosure for new sustainability-linked products to emerge and for carbon trading markets to scale.
