The influence of environmental, social, and governance (ESG) issues has moved from being the “niche concern of a select group of ethical or socially responsible investors,” as Reuters used to call it, to being part of the mainstream discourse on corporate performance and priorities. Yet the effects these changes will have on consumer-, labor-, and capital markets are still uncertain. Sustainable finance is thus the CFRA's central perspective goal: research, documenting, and encouragement of reporting and stability in the financial sector, with a focus on an integration of environmental, social, and governance (ESG) strategies.
Environmental issues are central to the sustainable finance perspective, as climate change threatens the financial resilience and long-term prosperity of the financial sector. Key to the business community’s response is a shared perspective on responsible and sustainable investment strategies that recognize the needs of all stakeholders and realize fairness, innovation, and resilience objectives. The international Task Force on Climate-related Financial Disclosures states: “Increasing transparency makes markets more efficient, and economies more stable and resilient.” To this end, the 2030 Agenda for Sustainable Development outlined by the United Nations includes among its goals: “Improve the regulation and monitoring of global financial markets and institutions and strengthen the implementation of such regulations.” Moreover, the EU is swiftly moving to enhance its non-financial disclosure regulations with environmental, social, and governance (ESG) reporting requirements.
Based as it is at ESMT Berlin, where one focus is on technology management, the CFRA is in the right place to educate and unite diverse, new players on the interplay of digitalization and ESG issues in the financial sphere. Our research focusing on the principles, mechanisms, and outcomes of sustainable finance will help companies meet the demand for ESG-integrated financial analysis.