In a general context, traditional finance focuses on financial returns. Meanwhile, sustainable finance considers not only financial returns, but social and environmental returns as well.
Many organizations today face challenges when it comes to sustainability. These challenges can be divided into social issues—which include poverty, lack of healthcare, hunger, shelter—and environmental issues—which include climate change, waste management, and scarcity of natural resources.
The question now is: What role does finance play when it comes to sustainability?
While companies allocate funds for projects that give them the best return on investment and increase shareholder value, integrating sustainability into the framework changes the way we understand the concept of “return on investment.”
Examples of integrating sustainability into company projects include investing or lending money for projects such as promoting the use of recyclable materials or charitable community development in rural areas.
Many large multinational companies and financial institutions have increased efforts for ESG (environment, social, and corporate governance). This is an excellent way to optimize companies’ returns on investments, reaping the benefits of embracing sustainable finance principles and initiatives.
Prof. Felipe Calderon, Head of the Washington SyCip Graduate School of Business at the Asian Institute of Management, is an expert on sustainable finance and the recent trend of companies adopting sustainable business practices.
Calderon has over 22 years of international banking experience from the Business Development Bank of Canada where he held multiple field and leadership positions. His extensive banking experience also includes syndicated lending and trade financing in the Philippines and Hong Kong. He is a Canadian Certified Management Accountant who completed his graduate studies in International Banking and Financial Studies from Heriot-Watt University in Scotland and obtained his PhD from the University of St. Gallen in Switzerland, with a research focus on sustainable lending.
AIM does not fall behind when it comes to integrating sustainability into its various degree programs, operations, and its short-term and long-term goals. AIM is committed to educating future generations of globally responsible professionals, managers, and leaders. AIM, represented by Calderon, is a signatory to the UN’s Principles of Responsible Management Education.
Words by GIL DOMINGO, MBA 2018