Financial Manager Momal

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(;(&87,9( 6800$5< ,QWURGXFWLRQ 7KH (XURSHDQ &RPPXQLW\ 3URJUDPPH RI 3ROLF\ DQG $FWLRQ LQ 5HODWLRQ WR WKH (QYLURQPHQW DQG 6XVWDLQDEOH 'HYHORSPHQW (the Fifth Environmental Programme) (OJ 93/C 138/27) recognised the importance of financial institutions by stating that "financial institutions which assume the risk of companies and plants can exercise considerable influence - in some cases control - over investment and management decisions which could be brought into play for the benefit of the environment". Despite this, little work has been done by the Commission on the role of the financial institutions in achieving sustainable development. An even more fundamental relationship is indicated by an alternative definition of sustainable development: ³D SURFHVV RI GHYHORSPHQW ZKLFK OHDYHV DW OHDVW WKH VDPH DPRXQW RI FDSLWDO QDWXUDO DQG PDQPDGH WR IXWXUH JHQHUDWLRQV DV FXUUHQW JHQHUDWLRQV KDYH DFFHVV WR  This makes it clear that sustainable development is about capital allocation and thus should be at the core of financial markets activity. On a more practical level, financial institutions interact with the environment in a number of ways: • as LQYHVWRUV - supplying the investment needed to achieve sustainable development. • as LQQRYDWRUV - developing new financial products to encourage sustainable development - e.g. in energy efficiency. • as YDOXHUV - pricing risks and estimating returns, for companies, projects and others. • as SRZHUIXO VWDNHKROGHUV - as shareholders and lenders they can exercise considerable influence over the management of companies. • as SROOXWHUV - while not “dirty” industries, financial institutions do consume considerable resources. • as YLFWLPV of environmental change - e.g. from... [continues]

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