The finance sector is evolving due to the urgency of tackling climate change and the increasing need for social responsibility. Sustainable finance has emerged as a vital area of expertise sparking the interest of students and professionals looking to acquire the necessary skills to embark on a career in this sector.
Sustainable finance differs from mainstream finance in its objectives and methodologies: it is not restricted to maximising financial returns and managing risks but also considers environmental, social and governance (ESG) criteria when analysing investments. It has a two-fold objective to generate healthy returns while bringing a positive social and environmental impact by assessing investments based on their contribution to sustainable development.
This novel approach to finance has given rise to a series of specialist professions requiring a combination of skills in finance and social responsibility. Roles such as sustainability risk manager, ESG analyst, ESG compliance manager, sustainable investment advisor, sustainability auditor, climate risk analyst and green finance project manager illustrate the fusion of financial performance considerations with environmental and social impacts. Such professionals must combine an in-depth understanding of financial practices with an ethical application of sustainability principles.
The importance of sustainable finance is further accentuated by developments in legislation around the world, with increasingly stringent regulations such as the EU Taxonomy for Sustainable Activities, the U.S. Clean Air Act, the U.N. Principles for Responsible Investment, and Article 173 of France’s Energy Transition Law, which are prompting companies to adopt sustainable practices. These laws, including China’s Green Bond Principles, call for transparency and accountability and urge the financial sector to adapt quickly.
To break into this evolving sector, it is first essential to choose a study programme in sustainable finance recognised by leading educational institutions (Ministère de l’Enseignement Supérieur, AACSB, EQUIS, AMBA, etc.); one that offers a comprehensive syllabus addressing a wide range of sustainability issues, from climate finance to financial inclusion; one that is taught by an experienced teaching team; and one that has strong links with the financial sector for hands-on experience and valuable employment opportunities. Such a programme should also prepare learners to acquire recognised professional certifications such as CESGA 4.0 (Certified ESG Analyst®) or CFA ESG.
Sustainable finance is no longer a ‘niche’ sector, but a vital element in tackling climate issues and social challenges. By focusing on the U.N’s Sustainable Development Goals and aligning itself with initiatives such as the Green Pact for Europe, finance can become a key ‘player’ in the pursuit of a more sustainable future. For aspiring professionals, choosing a study programme that is fully committed to this transformation is essential if they are to make a significant contribution to bringing about real change.
The author is the Associate Professor of Finance, Director of the Finance Department, Excelia Business School
