A Sustainable Future : The Importance and the Development of Sustainable Finance In the 21st Century

Abstract

The environmental problems that have emerged along with rapidly increasing global warming in recent years have made the concept of sustainability an important issue in the world in general. This fact has been largely effective in increasing the sensitivity of businesses and leading corporations to the environmental problems. This situation has led businesses to implement environmental friendly policies and invest in these areas, both interms of efficient use of natural resources and minimizing the damage to the environment. With the increasing global warming, climate change has recently become one of the most important problems in the world, and many countries have started to make efforts to reduce the risk of climate change. The inadequacy of environemental measures taken so far has necessitated the search for solutions in different areas regarding this issue. In this sense, financial institutions also contribute to climate awareness by following environmental policies in their activities and developing products that prioritize the environment. The concept of sustainable finance has led to the development of various financial products and to the development of financing projects aimed at protecting the environment. While the concept of sustainable finance is perceived as the responsibility of public authorities, the private sector has also been included in the process with the Sustainable Development Goals in the UN 2030 Agenda. There is no doubt that sustainable banking and finance practices, especially the implementation of sustainability practices by banks and other corporations in developing countries will contribute to the development of these countries considerably. In this study, it is aimed to draw attention to the global climate crisis, to emphasize the relationship between finance and the environment, and to contribute to the increase of applications in this field in the world by introducing green financing tools. One of the important functions of sustainable finance against the climate crisis is the evolution of companies funded within the scope of ESG criteria into a production process that tends to be sensitive to carbon emissions, as well as acquiring social and governance sensitivity. In this way, an economic process can be carried out on the axis of environmental and social awareness. In addition to combating climate change, it can be an important supporter in achieving the Sustainable Development Goals.