Sustainable financing may have its limits

(EurActiv, 25 Sep 2019) With an increasing number of investors being concerned about climate risks, they have started to push for sustainable business practices. But critics warn that such a “greening” of capitalism will not be enough. EURACTIV Germany reports.

Investors are becoming aware that climate risks must be taken into account when assessing profit expectations, while a number of financial actors have started to develop ways to measure climate risks in a more reliable manner, as well as ways to better redirect capital flows into sustainable projects.

At first glance, this seems to be optimistic, as the financial sector appears committed in the fight against climate change. However, critics have pointed out that this may not be enough if making money and generating growth continues to be the main premise.

Green growth also has its limits.

“Sure, we can produce cars, iPhones and skyscrapers more efficiently, but we can’t produce them from thin air,” Jason Hickel wrote in the American news publication Foreign Policy.

According to the Guardian’s George Monbiot, trust in revolutionary technologies is misleading.

“In an attempt to avoid climate collapse, what counts is not what we do, but what we stop doing. It doesn’t matter how many solar panels we build if we don’t turn off coal and gas burners at the same time,” Monbiot said.

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EurActiv, 25 Sep 2019: Sustainable financing may have its limits